Tax Plans Continue to Morph as West Virginia Legislatiure Enters Final Days
By Charles Young
April 9, 2021 - Republican backed efforts to pass a substantial tax reform package continue as the West Virginia Legislature enters the final two days of this year’s regular session.
Although Gov. Jim Justice and some Republicans lawmakers have been focused on crafting a tax plan involving the elimination of the state’s personal income tax throughout the current session, it remains to be seen if legislation will be completed before the midnight deadline Saturday night.
With the governor’s one-day extension with a special session set for Sunday, lawmakers could address the tax issue then.
Senate lawmakers passed an amended version of House Bill 3300, which represents a hybrid of Justice’s “Justice 4 All” plan and plans developed in the Senate, late on Wednesday.
The bill was then sent to the House for conference, but House Speaker Roger Hanshaw, R-Clay, has publicly speculated that the bill is likely to die there.
Justice issued a statement Thursday afternoon praising Senate President Craig Blair, R-Berkeley, and other Senate lawmakers for passing the bill.
“With my support, and the support of the Senate, we are two-thirds of the way to making this dream a reality,” Justice said. “We will continue to work with members of the House to get this bill across the finish line.”
House Minority Leader Doug Skaff, D-Kanawha, and Del. Shawn Fluharty, D-Ohio, issued a joint statement Thursday afternoon saying their caucus opposes the version of HB 3300 passed by the Senate.
“This plan will hurt West Virginians,” they said. “This tax increase does not help working West Virginians. It is a tax break for wealthy West Virginians at the expense of everyone else. It hurts small businesses. It hurts border counties. It hurts customers.”
During his virtual press briefing Wednesday, Justice reflected on Monday’s summit with lawmakers and shared his hope that a compromise can be reached before time runs out on Friday.
“I’m very pleased with what we’ve gotten done thus far,” he said.
One element of Justice’s plan that has remained constant throughout its evolution is the implementation of a tiered system for severance taxes on extractions of oil, natural gas and coal. Each commodity would be taxed at one rate as long as the price remains below a designated level, but would be taxed at increasing rates as the price rises.
He has worked with energy industry stakeholders and has been willing to compromise on the specific numbers for each tier, Justice said.
“I really am hopeful that the (WV) Coal Association and the gas people are going to join us in this effort and step up,” he said.
Justice, who has pitched his tax plan as a strategy to promote economic development and attract new residents to the state, has repeatedly alluded to the possibility of calling a special legislative session at some point in the near future if lawmakers fail to pass a tax reform package he is willing to sign.
The 60-day session of the West Virginia Legislature typically begins on the second Wednesday in January of each year, except in a year following a gubernatorial election. This year’s session started on Feb. 10.
The COVID-19 pandemic also necessitated a number of protocols and precautions that greatly impacted the legislative process this year, including limited public access to the state Capitol building and remote testimonies before committees.
According to information supplied by the National Conference of State Legislatures, the pandemic impacted or altered nearly every legislative body in the country over the past year, with many having to pause or reformat their sessions after outbreaks of the virus.
In West Virginia, only one lawmaker, Del. Brandon Steele, R-Raleigh, who serves as chair of the House Government Organization Committee, tested positive for the coronavirus during this year’s session. He later made a full recovery and resumed his duties.