MORGANTOWN, W.Va. – Gov. Justice shared his desire to repeal the state’s income tax in a town hall on Tuesday.
The governor was joined by his Secretary of Economic Development Mitch Carmichael and Revenue Secretary Dave Hardy. All three men touted the governor’s proposal, which they said will result in $1,087,000,000 going into the pockets of West Virginians. In addition, the approximately 732,000 households in the state would each receive $1,483, on average.
This will be the most profound statement that I make. None of us, none of the legislatures down there, none of us have anything to do that is anywhere close to approaching how important this is. Nobody. Nobody. The legislature could do nothing, nothing, period. All that they are going to accomplish and do, and I praise them for what they’re doing, altogether, all together, nothing is as important as this. No way.Gov. Jim Justice
Justice said he sees nothing as important as his proposal and sees no better time to enact it than the present.
West Virginia is the only state in the nation that has seen a decline in population since the 1950s and things are drastically getting worse as time goes by. Therefore, the governor and his team argued, the time to enact the income tax repeal is now.
The other reason being, Justice said, the world is looking at West Virginia for its effective handling of the COVID-19 pandemic and vaccine rollout.
“The globe right now is looking at West Virginia,” he said. “If we put it off a year, that’s going to hurt us. If we go to a special session in June, that’s going to hurt us. We need to try. I do not know if we can pull it off. I do not know if we can pull it off. In fact, there’s a lot and a lot of pessimistic thoughts that we can’t pull it off. I’m going to try.”
The governor said he is fully committed to enacting his tax repeal. So much so that he and his economic team have analyzed all 50 states to see what options are available out there.
Dave Hardy, revenue secretary, said the state government relied on the Tax Foundation as a starting point to assess how all states were fairing with their tax policies. Then, they dwindled the list down to the nine states without an income tax.
“The state we kept zooming on is Tennessee,” Hardy said. “Tennessee and West Virginia compare very well.”
Justice said the states compare well because they have proximity, similar climate and citizens. Also, if people wanted to travel to Tennessee from the East Coast to take advantage of the tax climate they would have to pass through West Virginia and see that it offers similar prospects.
Tennessee also has a system in place that West Virginia wants to emulate.
It relies heavily on sales tax, but the governor and his economic team said the sales tax wouldn’t be exactly the same. Right now, he anticipates the tax would be roughly 8.4 percent, on average, if the plan were to be enacted.
This is only one of a few ways the governor’s team proposed paying for his tax proposal. It is a combination of sources including increasing consumption taxes on alcohol, doing away with some tax breaks for the oil and gas industry, and maintaining a flat budget.
“If you add them all up, it comes out to where the state’s finances are in good order,” Hardy said.
All of this is just a proposed plan. Nothing is set in stone and no one knows that better than the governor.
“I’m all for anything that anybody wants to do in tweeking it and changing it and everything else,” he said. “It will be a challenge to get us across the finish line. It will be a real challenge to get us across the finish line in a session.”
Despite the challenge, Justice said he is ready for the battle if others will join him. The biggest hurdle he has to overcome, he said, is his own party — the West Virginia Republican Party.
Regardless, the governor said, he will continue going around sharing his idea with the public in the hopes that lawmakers in Charleston will come around sooner rather than later and cease West Virginia’s moment in the spotlight.