August 2 – Charleston – West Virginia’s governor again encouraged lawmakers this week to continue reducing the state’s personal income tax and eventually boost population growth and bring in new businesses by eliminating it entirely.
Governor Jim Justice spoke earlier this week about cutting the state income tax. He outlined a proposal to compensate for reductions in the state budget caused by reductions in tax revenues.
Justice said there is still much to be done before West Virginia’s personal income tax is eliminated, and one obstacle is the Legislature’s reluctance to make such cuts.
“If we’re not careful, everyone has a pet project they’d like to do with surplus dollars,” he said Wednesday during a management meeting.
Justice said his proposal for making the cuts and maintaining state budgets was to calculate the cost of reducing personal income taxes.
“Our revenue people can do this a lot better than I can, but the cost is around $27 million percent of basically any cut we make,” he said. “Now, I’m close, so if it’s $27 million and what we want to do is cut another 5%, you multiply five times 27 and you get $135 million. Now that’s basically what it’s going to cost and we’re basically going to cut from the revenue of the state of West Virginia, $135 million.”
Justice said the state’s current budget surplus would allow for a large cut in personal income tax revenue.
“We now have a surplus of $826.6 million,” he said. “Now, if we can’t take $135 million and give it back to the people – first and foremost, it’s their money – then we’re making a huge mistake.”
Other states, like Tennessee, have reduced or eliminated their personal income taxes, and that has boosted economic growth, Justice said.
“Literally, our legislators need to understand that this is the people’s money and if we can accelerate any way to get rid of our personal income tax, we need to commit to doing that,” Justice said. “Because there is nothing that will boost population growth and business like eliminating our personal income tax.”
“If we can get rid of our personal income tax, we will be Tennessee. We’re going to be Tennessee on steroids,” he said, adding that West Virginia was closer to the nation’s population centers than Tennessee.
Contact Greg Jordan at
gjordan@bdtonline.com
Contact Greg Jordan at gjordan@bdtonline.com
