The 2019 regular legislative session ended this past Saturday. Overall, it was one of the more successful legislative sessions in recent years, all things considered. There were also a string of disappointments along with some surprising victories and the defeat of many bad bills.
On the fiscal side, most of the regressive tax policy legislation was killed or weakened while, for the first time in recent years, colleges and universities received more funding than in previous budgets.
Some big wins included eliminating the ban on food assistance (SNAP) for those convicted of drug-related felonies, defeating a Medicaid work reporting requirement, expanding Medicaid coverage to more pregnant women, stopping large income and business property tax cuts, and ensuring local governments maintain control over local policy decision making.
Below is a rundown of the legislation we worked on directly or followed, the good, the bad, and the defeated, in that order.
Reducing Food Insecurity (HB 2459): West Virginia was just one of three states that banned people convicted of drug-related felonies from receiving SNAP benefits. Effective May 21, 2019 this will no longer be the case and over 2,100 people, many of which are in recovery from drug addiction, will now be able to receive SNAP benefits. This policy change will not only reduce hunger, racial disparities, and remove a barrier to employment, but will put more money in our state’s economy.
Expanding Health Coverage to Pregnant Women (SB 564): In 2018, 34 states extended Medicaid/CHIP coverage to pregnant women above West Virginia’s eligibility level of 163 percent of the federal poverty level. Beginning July 1, 2019, an estimated 500 to 900 uninsured women with incomes up to 300 percent of FPL will now be eligible for Medicaid/CHIP coverage, making West Virginia a leading state in providing health coverage and improving health incomes for women and children.
Removing Barriers to Employment for Formally Incarcerated: On top of lifting the SNAP ban for those convicted of drug-related felonies, lawmakers passed SB 152 to allow people with non-violent felony or misdemeanor convictions to clear (expunge) their criminal record. Lawmakers also passed HB 2083 that will make it easier for people to obtain a state ID after being released from prison and HB 2486 that will ease restrictions on dozens of professional licenses for people with criminal convictions. WVCBP Advisory Committee Member Lida Shepherd with the American Friends Service Committee and other coalition members played a large role in making this happen.
Paid Family and Medical Leave (SCR 41): The State Senate passed a resolution to study the implementation, costs, and benefits of creating a paid family and medical leave insurance program in West Virginia. This is one of the seven policies that we highlighted in our 2018 report, Strengthening West Virginia Families. Access to paid family and medical leave improves outcomes for children and benefits businesses by creating healthier and more productive employees. The legislature will study this policy over the next 10 months and make recommendations next year.
Tax Cut on Social Security Benefits (HB 2001): After the House passed this bill to fully exempt Social Security benefits from the state income tax, Senate leadership wisely capped the exemption to those with incomes below $100,000 (filing jointly) and phased it in over three years. The House version would have lowered revenues by at least $50 million, with most of the benefits going to high-income retirees, while the version of the bill that passed cut the price tag in half ($25 million). While this was not the best use of $25 million dollars, (see other options here and here), at least the tax cuts are phased in and capped. About half of all retirees do not pay state incomes tax on their Social Security benefits and most pay very little.
Other Good Legislation that Passed: The legislature passed SB 1 that will provide free in-state college tuition at the state’s community and technical colleges to some applicants if they meet certain requirements, including passing a drug test each semester. SB 4, which makes the Municipal Home Rule Pilot Program permanent, passed during the session’s final days. This will allow municipalities to enact laws, ordinances and policies such as a local sales and use tax. The legislature also passed SB 72, the Sexual Assault Victims’ Bill of Rights (Hazel’s Law), adding much-needed protections for women in the state. The Family Planning Access Act (HB 2583), also passed, and will allow people to get birth control from a pharmacist without visiting a doctor. And of course, HB 2020, the state budget passed – but more on this soon!
Transitioning Foster Care a Managed Care Organization (MCO) (HB 2010): This was one of the most controversial bills to pass during the session. While it includes some positive things, the bill will give WV DHHR authority to move around 7,000 foster kids who receive Medicaid benefits into a private managed care plan to help deal with the state’s opioid crisis and DHHR’s inability to manage this population. While there has been little evaluation of Medicaid managed care for foster kids in other states, there are well-documented problems in Texas were MCOs denied Medicaid health services to thousands of foster kids.
Reducing Coal Severance Taxes (HB 3142 & HB 3144): Despite cogent testimony and analysis from the WVCBP and the Department of Revenue that this bill would do little to boost employment or coal production, the legislature passed HB 3142 to phase down the coal severance tax from five percent to three percent for steam and thermal coal production. Once fully phased in, it will reduce tax revenues by an estimated $64 million annually. The good news is previous versions of the bill reduced the severance tax rate to two percent with no phase in. On top of this budget-busting bill, the legislature also passed a new “super tax credit” for coal companies that would allow them to deduct up to 35 percent of new investment costs (machinery/equipment/land) from their coal severance tax liability up to 80 percent of what they owe. It is unclear what the cost of this new tax credit will be, but it will likely reduce severance tax collections even more especially if companies reorganize themselves to take advantage of it.
Reducing wages for workers (SB 377): This bill exempts seasonal amusement park workers from receiving overtime pay. This bill was also known as the “Six Flags” bill since the amusement park company has asked for this exemption in states that have minimum wages above the federal, like West Virginia. Altogether, there were about 520 “Amusement Park and Recreational Attendants” employed in West Virginia in 2017 making an annual income of just above $20,000.
Tax Cuts for “Opportunity Zones” (HB 2828): While this bill did not get much attention, it provides personal income and corporate net income tax cuts for businesses that operate in the 55 designated opportunity zones across West Virginia that were created through the federal tax cuts passed in December 2017 (Tax Cuts and Jobs Act of 2017). There are a myriad of problems with the structure of these tax breaks in “opportunity zones” (see here). Since West Virginia already piggybacks on the federal definition of taxable income for state tax purposes, it is already going to lose tax revenue because of the federal tax breaks offered through opportunity zones. This bill would double down on the tax breaks by including state income/corporate net income tax breaks. While it is unclear how much revenue will be lost, it’s clear that spending this money on schools, workforce training, infrastructure, environmental cleanup and other things would be a much better use of resources.
More Money in Politics (SB 622): This bill dramatically increases the amount of money an individual can donate to political parties ($1,000 to $10,000), political actions committees ($1,000 to $5,000), and candidates (from $1,000 to $2,800). This bill will make it much easier for wealthy people to control policy and politics in West Virginia.
Medicaid Work Reporting Requirement (HB 3136): The most crucial defeat of the session, this bill would have required WV DHHR to submit an Section 1115 Waiver for a work reporting requirement for Medicaid. Altogether, this would have caused between 46,000 to 122,000 adults to lose Medicaid health coverage.
Privatization of Public Education (SB 451): This was the most controversial bill of the session and it resulted in a two-day strike that involved teachers and school service personnel. It contained many proposals (it was known as the education omnibus bill!) including establishing charter schools and Education Savings Accounts (ESAs). ESAs are a type of school voucher for parents that send their kids to private schools that would have funneled millions of dollars from public to private schools, as we reported here. The governor has called a special session on educational reform on a date to be determined. Stay tuned!
Phasing Out Personal Income Tax (HB 3137): This bill would have created a “personal income tax reduction fund” with designated revenues. Each time this fund hit $200 million, it would have triggered income tax rate reductions of $200 million. The proposal, mostly benefiting high- income people, would have eventually led to large compounding revenue losses and budget holes requiring more cuts to schools, colleges, and other budget priorities or tax increases that would most likely haven fallen on working families. Eventually, it would have phased out the income tax over time.
Business “Inventory” Tax Repeal (SJR 11/HJR 17): Both of these resolutions were aimed at eliminating the property tax on business inventory, machinery, and equipment from industrial and/or mining personal property. Altogether, repeal of this tax would have cost schools, counties, and municipalities between $130 million and $209 million in lost property tax revenue annually.
Preempting Local Control (SB 376/ HB 2708): These bills would have “preempted” city governments from raising living standards for working people taking away their authority to enact wage increases, paid sick days, and other labor standards. HB 2708 passed out of House Government Organization, but died. These types of bills are moving all across the country suppressing workers’ rights.
Constitutional Convention Concurrent Resolutions (HCR 33/HCR 61) : The legislature considered two separate resolutions urging Congress to call a Article V constitutional convention of states that could threaten our constitutional stability and economic health. After passing the House, HCR 61 was filibustered in the Senate on the last night of the legislative session and died.
On top of these bills, many other bad bills were also defeated. Most notable was the “campus carry” bill (HB 2519) that would have allowed students, with a valid license, to carry a concealed weapon on college campuses (with some exceptions).
Altogether, it was an interesting legislative session with some notable victories and defeats.
