Surprises during the second week | News, Sports, Jobs

Yes “tax cut plan” was on your legislative bingo card for this session, you can mark the spot, but I bet you didn’t think the plan would come from Democratic lawmakers.

Last week, members of the House of Delegates and state Senate Democratic caucuses released a plan to cut the consumer sales and use tax from 6% to 4.75% over the course of the current fiscal year, with a further reduction of 0.25% if the state’s Rainy Day Fund reaches cross the $1 billion mark again when the new fiscal year begins in July.

The initial 1.25% cut would cost more than $312 million — almost the same amount lawmakers have set aside for $315 million in matching funds that will take effect once Nucor meets certain spending thresholds. once he begins construction of a new steel mill in Mason County.

The $312.5 million would come from excess tax revenue for the current fiscal year, which is likely to exceed $400 million by the end of January. The next 0.25% — a cost of about $62.5 million — would come from the Rainy Day Fund if it remained at or above $1 billion.

Another 0.25% would be reduced from sales tax at the start of each fiscal year as long as the Rainy Day Fund continues to reach $1 billion. Theoretically, that could mean the sales tax could be scrapped, although Senate Minority Leader Stephen Baldwin, D-Greenbrier, doesn’t think that’s likely.

Baldwin is right. The unspoken thing right now driving these massive surpluses is the immense amount of federal dollars being spent by both individuals and the state government. I would be very surprised if large surpluses continued beyond this fiscal year.

Of course, we will probably continue to do well as long as the economy is not seriously affected. Inflation may still continue, but West Virginia University’s Bureau of Business and Economic Research predicts a downward trend in inflation through this year and a return to a normal rate by now. 2023.

According to the Bureau of Economic Research’s annual West Virginia Economic Outlook Report, sales tax accounts for 16% of state revenue. It actually represents more tax revenue than the personal income tax that Gov. Jim Justice and some Republican lawmakers wanted to eliminate last year. Personal income tax revenues represent 11% of state revenues (the bulk of state revenues – 27% from the federal government).

Sources in the governor’s office have raised concerns with me about whether the Democratic tax plan would violate provisions of the US federal bailout law that prohibit the use of funds to directly or indirectly reduce tax revenue. sharp.

First, since the funds come from excess tax revenue and the Rainy Day Fund, Democratic lawmakers believe it does not violate that. Second, three federal lawsuits have blocked the application of this provision. The US Treasury Department is appealing these injunctions, but this provision is not yet in effect. I would also like to remind the Governor’s Office that the ban on tax cuts did not prevent them from moving forward with their personal income tax phase-out last year.

I wouldn’t expect any movement on the Democratic sales tax proposal. But it gives elected members of the minority party an opportunity to campaign for re-election by saying they tried to cut your taxes.

As for whether Republicans will try to phase out personal income taxes again, don’t expect that this year. The goal is to ensure that the constitutional amendment on the ballot that would give the Legislature the power to make changes to, reduce or remove the personal property tax passes.

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As I did last week, Rob Cornelius was reinstated as an elected member of the Wood County Republican executive committee and as chairman after he was arbitrarily removed from office in 2019 by the former chair of the committee. Republican state executive, Melody Potter, for being mean to her. and publicly criticizing government justice.

I have a question: does this mean that all decisions made by the REC State since the summer of 2019 are suspect? I ask because current state party chairman Mark Harris won by a narrow margin last year and only after a second vote had to be taken.

Harris won the first vote 57-55, with Roger Conley, the person Potter installed to replace Cornelius as Wood County REC chairman, voting for Harris. Cornelius, who was not allowed to sit because he was no longer county party chairman while the case was pending, reportedly voted for former GOP Chairman Conrad Lucas. That would have changed the vote to a 56-56 tie.

If you take into account that four state party vice presidents voted in the first round in violation of party bylaws, Lucas would have won the first vote. But because different committee members had different vote totals, and the secretary had no paper record of each member’s vote, the REC held a second vote. Harris won it 56-53 after a committee member changed his vote from Lucas to Harris and a proxy vote was changed to Harris (one of the four disqualified vice presidents still voted in the second vote).

All I’m saying is that the state Republican Party’s winter meeting should be interesting.

(Adams is the state government reporter for Ogden Newspapers. He can be reached at [email protected])

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