W.Va. Republicans remain divided after summit on income tax

By Cuneyt Dil - Associated Press

CHARLESTON, W.Va. (AP) — Republican leaders in West Virginia remained divided on how to enact an income tax cut after a summit called by Gov. Jim Justice, who unveiled a revised proposal at the meeting on Monday.

The meeting between Justice and legislative leaders was meant to strike a compromise between dueling proposals to lower the state income tax.

Justice, who led the charge for tax reform with his original proposal in March, presented a revised version at the meeting, less than a week after he said Republican senators blindsided him with their own plan.

The Republican governor’s new plan would cut the income tax by 50%, rather than 60%. From his original proposal, it retains raising the sales tax from 6% to 7.9% and a new tax on luxury items. It also contains an unspecified tax rebate for those earning $35,000 or less, which did not figure into plans released by House and Senate Republicans.

Republican legislative leaders remained hesitant about the governor’s pitch to raise severance taxes on industries such as coal, oil and natural gas. A businessman with investments in coal, Justice has said companies can afford to pay a little more, while critics in his party said the declining industry has weathered enough pain.

But Senate President Craig Blair (R-Berkeley) indicated he did not have an issue with the governor’s proposed luxury tax on any purchased item of at least $5,000, a provision that was not part of the Senate bill.

“If we can garner the votes, I’m all in favor with moving forward with this,” Blair said of the governor’s plan.

Justice criticized the Senate’s proposal, which would raise the sales tax to 8.5% and revives a tax on groceries that the state phased out less than a decade ago. He said “an avalanche of voters” would be upset if the state approved cutting the income tax by putting “an incredible burden back on those who are struggling the most.”

Liberal groups are rallying opposition to all of the proposals to cut the income tax, arguing a higher sales tax will hurt the poor and working class.

West Virginia Citizen Action Education Fund, which champions progressive causes, said the proposals “ask working West Virginians to pay the price for tax cuts for the wealthiest.”

The nearly two-hour long meeting included statehouse leaders from the majority and minority parties. Republicans hold a supermajority in the legislature and have made lowering the state’s income tax their top priority.

They want to enact a tax overhaul this year in the hopes that lower taxes will drive residents to move into the state, where the population has been declining.

But they have five days to reconcile dueling proposals until the 60-day session is scheduled to conclude on Saturday.

“I’m trying to put money back into people’s hands,” Justice said to end the summit. “And I’m trying to do something that is going to be beneficial. But I know y’all are trying to do the exact same thing. So let’s just keep working.”

By Cuneyt Dil

Associated Press