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Justice wants more tax cuts pronto

MORE COVERAGE: Senate Finance Chairman Eric Tarr, R-Putnam, questions whether the governor’s proposal is realistic. See The Dominion Post Sunday.

Gov. Jim Justice has dared officials to embrace a personal income tax proposal that would result in financial effects beyond his term.

Campaigns for the two candidates running to succeed Justice responded by expressing support for cutting taxes — but caution over the other steps necessary to maintain a balanced budget.

Justice announced his proposal early this week, saying the state is on track for another automatic personal income tax cut of 3% to 4% — and adding that he would call legislators in to approve another 5% cut even beyond that. The governor pointed toward a special session in late summer.

“I won’t be your governor much longer, and we need to continue marching towards eliminating the personal income tax. Doing so will only bring more and more people to this incredible place and promote even more goodness,” Justice said in a press release.

Justice’s remarks at the West Virginia Culture Center came as the conclusion to the most recent fiscal year resulted in revenue of $826 million above the estimate set annually by the governor.

The fiscal 2024 estimate had been $4.88 billion. The actual revenue collection wound up being $5.7 billion through June. By the same time in 2023, general revenue collections totaled $6.48 billion.

The difference came as the state instituted a 21.25% personal income tax cut this year in a package that included further automatic reductions under certain economic conditions.

The formula for the tax trigger would measure general revenue collections in a fiscal year minus severance collections compared to 2019 as a base year. If collections are ahead of the base year, that would activate the trigger.

“For God’s sakes a living, don’t be afraid. Don’t be afraid,” Justice said, addressing lawmakers.

Early next year, a new governor will begin participating in oversight of the state’s finances.

The campaign for the Republican nominee, Attorney General Patrick Morrisey, said he believes in tax cuts but wants to be careful about also taking on additional spending.

“Attorney General Patrick Morrisey has consistently advocated for reducing and ultimately eliminating the income tax. He fully supports this initiative but emphasizes the need for fiscal discipline by avoiding large new spending measures before year’s end. Eliminating the income tax will incentivize work and significantly boost our economy and citizens’ standard of living,” said Taylor Van Virk, speaking for the Morrisey campaign.

The campaign for the Democratic nominee, Huntington Mayor Steve Williams, said he too believes tax cuts can be achieved — but when carefully balanced with an assessment of what is necessary for public services.

“I’m all for cutting taxes — and I’ve done it in Huntington while paving roads, improving infrastructure and fully funding benefits for first responders and other city workers. If the governor is going to cut additional taxes I wish he would present a plan for how he intends to do so while addressing our critical shortage of teachers, correctional offers and CPS workers,” Williams said in a statement provided by his campaign.

The current governor, speaking on MetroNews’ “Talkline,” said the state should be aggressive. But Justice said there are ways to provide some cautionary steps.

“We’re going to trigger, and we’re going to trigger for sure. And that’s going to give us 3 to 4% more reduction in our income tax. That’s going to take us from 21 and a quarter (percent cut) up to almost 25 or right at 25. So that’s going to happen for sure,” Justice said. “But then we’re still sitting here on $826 million of additional surplus.

“Why don’t we do this — I mean, let’s just be smart — if anybody’s concerned, if anybody doesn’t have the guts to push this thing and do what we’ve already been doing then I would say do this: Let’s figure out what that additional 5% is going to cost us — and I think it’s going to cost us somewhere around $125 million to $150 million for the 5%. Let’s double that. Let’s take somewhere around $275 million of the $826 million and put it in the income tax reserve fund.”

Justice said millions of dollars in that reserve could provide assurance.

The incumbent governor, a Republican who is running for U.S. Senate, expressed urgency to move ahead.

“I believe there’s no better time than now on just about anything,” Justice said. “But the other flip side of it is, we had a lot of people — a lot of people in the Legislature that were just fine and dandy sitting on their hands with a big surplus there until Justice walked out the door ‘and then we can do all our pet projects.’ Well, I don’t believe in that. I don’t believe in that at all. And so if they don’t want to reduce taxes for the people of West Virginia then that’s on them. But you know where I stand.”