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Legislative Democrats propose sales tax cut linked to state budget surpluses

MORGANTOWN — Legislative Democrats on Tuesday presented a plan to use a portion of the state’s budget surplus to reduce the sales tax.

“Folks are struggling just to pay their bills. This is going to help ease that burden,” said Senate Minority Leader Stephen Baldwin, D-Greenbrier.

“What can we do to put our West Virginians first,” said House Minority Leader Doug Skaff, D-Kanawha. “It’s time to invest back in our people” and give everyone a fair cut across the board.

The budget surplus for this fiscal year is projected to be $700 million to $900 million, they said. Their initial sales tax cut would cost about $312.5 million — nearly the same as what the state has pledged for infrastructure improvement to seal the Nucor steel mill deal.

Their plan — they expect a bill spelling it out to be introduced this week — would immediately cut the sales tax from 6% to 4.75%.

That would save a family of three earning $30,000 a year about $122, said Sen. Richard Lindsay, D-Kanawha. A family of three earning $70,000 would save $201. In the current inflationary environment, that could help balance the increased costs of living.

“This is a responsible piece of legislation linked to the prosperity of this state,” Lindsay said.

Subsequent sales tax cuts would be tied to the Rainy Day Fund, they said. Every year, starting this year, when the fund reaches $1.1 billion (the fund now stands at $1.026 billion, according to the Budget Office), that triggers another .25% cut.

So at the end of FY 2022 in June, the sales tax could fall to 4.5%, and so on.

“We can afford it right now,” Baldwin said. And the plan would keep bond ratings high.

Delegate Lisa Zukoff, D-Marshall, said the tax cut would make West Virginia’s sales tax lower than Pennsylvania’s and Ohio’s, offering us a competitive advantage. “I truly hope this can be a bipartisan effort across the board to help all West Virginians.”

Baldwin said they’ve talked with Senate leadership about the plan, and pointed out that Senate President Craig Blair, R-Berkeley, has said more than once he’s open to good ideas, no matter if there’s a D or R attached.

Baldwin later mentioned the plan on the Senate floor, first saying he’s often asked if senators from opposite sides of the aisle really get along. They do, he said, though tax policy is one of the areas where they have differing opinions.

“We think that we’ve come up with an idea that we can work with our friends and colleagues across the aisle on, that will bridge those differences and do something that will help all West Virginians,” he said.

The Democrats will be happy to hear comments and feedback and work with colleagues across the aisle to reach an agreement, he said. “This is what we’ve come up with. It may not be the perfect idea but it may be worth trying to perfect together.”

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