With a relatively short 60-day legislative session, the bills that get considered—and the ones that don’t—tell us a lot about our lawmakers’ priorities. Now that we are exactly halfway through the 2023 session, the WVCBP team lends insight into what we’ve seen prioritized so far and what we would like to see prioritized during the final 30 days of session.
Governor Jim Justice made an income tax cut the centerpiece of his 2023 legislative priorities. HB 2526 would reduce personal income tax rates by 50 percent, and with it eliminate $1.5 billion in general revenue annually once fully phased in. As we’ve previously highlighted, income tax cuts overwhelmingly benefit the state’s wealthiest households while undermining our ability to make needed investments in public services like our schools, health care system, and infrastructure. While the House quickly passed the governor’s proposal, the Senate unveiled their own plan this week. Their proposal, SB 424, would reduce the personal income tax by a smaller amount up front with future triggers to reduce it further, as well as enact voter-rejected business personal property tax cuts. The Senate suspended rules on Wednesday to rush through their proposal without careful deliberation. While Senate leadership claimed the proposal would cost around $600 million annually, the legislation was passed without a fiscal note and once fully phased in, would cost far more if it successfully eliminated the personal income tax entirely.
While both chambers are passing legislation that would significantly cut state revenue, we’ve also seen several positive bills moving through committees to increase reimbursement rates for PEIA; provide public teacher, school service personnel, and correctional officer pay raises; and increase child care reimbursements. However, it still remains to be seen how these two priorities—deep revenue cuts and new spending—can co-exist.
When it comes to the criminal legal system, lawmakers seem less concerned with preventing future harm and more concerned with increasing punishment. Approximately 110 introduced bills create new offenses or increase criminal penalties for existing crimes. SB 547 proposes a radical restructuring of the offenses and penalties in the Uniform Controlled Substances Act. It starts by increasing the penalties for the most common felony drug offense: possession with intent to deliver a Schedule I or II substance (e.g., heroin or methamphetamine). Today, a person convicted of that offense faces a maximum sentence of 1 to 15 years. If that person were sentenced to prison, they would serve one year before they were eligible for release (a decision made by the Parole Board).
SB 547 would increase the minimum time a person convicted of this offense must serve in prison from one to three years. The Division of Corrections and Rehabilitation reports that it costs $38,099 to house a person in prison for one year. Passing SB 547 means tripling that investment in caging to $114,297 per person. The bill would also make anyone convicted of this offense ineligible for probation, which would sweep even more people into our state prisons. If this bill passes, more people would be sentenced to prison, and for longer terms, despite research showing there is no relationship between longer prison terms and drug misuse.
One bill addresses an issue people impacted by the criminal legal system have long-requested: voting rights. SB 235 would restore voting rights to people convicted of felony offenses who are under community supervision, like probation or parole.
Thus far, much of the health policy discussion this legislative session has focused on perceived social problems, rather than the tangible needs that many in the Mountain State face. Despite making abortion almost entirely inaccessible in July 2022, the state continues to focus its efforts on chipping away at reproductive rights. Despite hearing directly from concerned constituents, lawmakers have also passed legislation that bans gender-affirming care for trans youth (HB 2007). Furthermore, there have been a host of bills aimed at reducing or restricting vaccine requirements, including for infants, school-aged children, and adults (SB 2, SB 32, and HB 2036). All of these bills threaten the overall wellness of the Mountain State.
A few proactive bills worth noting have also been introduced, though none have passed yet. Examples include increasing dental benefits for adults enrolled in Medicaid (SB 290), capping insulin copays (SB 577), and covering doula care via Medicaid (SB 479).
All told, lawmakers have a significant opportunity this year to pass legislation that benefits all West Virginians—they just need the political will to prioritize broadly-shared investments over handouts to the wealthy and corporations and increasing harms to vulnerable populations.
Read the full blog post.
While Senators tout their tax cut plan, SB 424, as a “safe” approach to tax reform, a closer look reveals that it poses significant financial risks which would force future budget cuts or increases to other taxes.
SB 424 proposes an initial 15 percent personal income tax cut. This cut would overwhelmingly benefit the state’s wealthiest households, with two-thirds of the tax benefits going to the top 20 percent of households. The bill also contains automatic triggers to further reduce and ultimately eliminate the personal income tax, which brought in $2.5 billion in FY 2022, making it the state’s single largest general revenue source. This is the largest and costliest portion of the legislation. Beginning in 2025, if sales tax revenues grow by five percent from the previous year, the personal income tax is automatically reduced dollar-for-dollar by the amount the sales tax increased over a single year.
Eliminating the personal income tax based solely on one-time increases in sales tax revenue would make the state far more reliant on the regressive sales tax and further shift tax responsibilities onto low- and middle-income West Virginia households.
If these automatic income tax reductions create an overall reduction in tax revenue—which they are likely to do since they would divert nearly all natural revenue growth to tax cuts instead of budget needs—future legislatures will find themselves forced to roll back the personal income tax cuts, raise other taxes that fall more heavily on average West Virginia families, or cut public services disproportionately impacting everyday families.
SB 424 also contains provisions to have the state tax department provide rebates for personal property taxes paid under the six categories that were considered—and rejected by voters—in Amendment 2. If passed, taxpayers would be able to file at income tax time for a rebate of 100 percent of their local taxes paid on personal motor vehicles and businesses would be able to file for rebates of 50 percent of taxes paid toward the business personal property tax categories (machinery and equipment, inventory, leasehold investments, computer equipment, and furniture and fixtures).
While proponents framed SB 424 as limiting the personal property tax rebates to small businesses, the legislation does not define anywhere what constitutes a small business.
Proponents of the legislation also tout that SB 424 contains a fix to the “marriage penalty,” but according to the conservative Tax Foundation, West Virginia’s tax system does not currently have a marriage penalty, and the cost of changes in SB 424 related to this provision are unclear. Similarly, without a fiscal note from the state tax department, it is difficult to know how many taxpayers might benefit from the legislation’s real property tax rebate for veterans with full service disabilities.
While proponents of SB 424 framed the legislation as an approach that would benefit low- and middle-income families more than the governor’s tax proposal, HB 2526, that’s not really the case. The major provisions of the bill that kick in immediately—the 15 percent personal income tax cut across all rates and the business and personal property tax rebates—disproportionately benefit businesses and the state’s wealthiest households. Combined, the income tax cut for the top 20 percent of earners and the business property tax rebates make up about 61 percent of the cost of the tax plan, according to our estimates.
Read the full blog post.
Come work with us! We’re hiring two full-time, paid summer fellows.
The WVCBP seeks a Criminal Legal Policy Fellow to research and write about best practices for improving the criminal system, with a focus on the areas of excessive sentences and reducing the harms caused by jails and prisons.
The WVCBP also seeks an Economic Justice Research Fellow to research and analyze issues associated with economic security in West Virginia.
Our summer fellows are paid $20.00 per hour. A typical fellowship runs for 10-12 weeks from mid-May to early August. Fellowships are full-time at 37.5 hours per week and include two paid holidays, three paid vacation days, and one sick day.
Find further details and instructions to apply here. The deadline to apply for both positions is Wednesday, Feb. 15.
Both the public and legislators have recently raised concerns regarding Gov. Justice’s management of COVID-19 federal relief funds, claiming the money is not being distributed as intended to support communities most impacted by the pandemic. A recent article, featuring insight from WVCBP executive director Kelly Allen, provides further details. Excerpt below:
West Virginia received two pots of federal money during the pandemic: in 2020 the state was given $1.25 billion under the Coronavirus Aid Relief, and Economic Security (CARES) Act to pay for coronavirus-related expenses that were not previously accounted for in state and city budgets. The next year the state received an additional $1.35 billion under the American Rescue Plan to help state and local governments address public health issues and other “negative economic impacts” tied to the pandemic.
Now, Justice is seeking to transfer the state’s remaining $678 million in unallocated American Rescue Plan Act (ARPA) funding. Under the bill lawmakers are considering, the lion’s share of the money, $500 million, would be allocated to the state’s Economic Development Authority.
During a public hearing in the House chamber Thursday, 21 speakers weighed in on the legislation, with an overwhelming majority arguing that the ARPA money West Virginia received was intended to help address issues that particularly impacted communities of color and other disadvantaged groups in the state. They added that diverting so much of the remaining money into an economic development fund not only violated the spirit of West Virginia’s ARPA spending plan, it also disregarded Treasury Department guidance that said economic development was generally not an acceptable use of the money.
“If this appropriation is passed, over $800 million, or two-thirds of the ARPA funds that the state received, will have gone to big corporations,” said Kelly Allen, executive director of the West Virginia Center on Budget and Policy.
Several speakers instead voiced support for an alternative spending plan from the Tuesday Morning Group that would allocate $300 million of the remaining ARPA funding to counties based on the percentage of people living in poverty in each county. That plan has not received much of a response from Republican legislative leadership, according to the group’s chairman Rev. Matthew Watts.
One day later, senators were grilling members of the Governor’s office and other agencies about a different pot of federal money: the transfer of $28.3 million in CARES Act money intended to provide COVID relief into the Governor’s Office Gifts, Grants, and Donations Fund.
Questions have been raised about the ethics of that decision, particularly after $10 million of the fund was used to help pay for a new baseball stadium at Marshall University, the Governor’s alma mater.
“Isn’t that money laundering?” asked Sen. Randy Smith, R-Tucker. “I’m not saying there was anything illegally done. Some of it is borderline unethical … I guess we’ll find out?”
Berkeley Bentley, the governor’s chief counsel, countered that Justice’s office acted legally and was allowed to transfer the funds to reimburse the state government for allowable expenses. But senators were clearly unsatisfied with that argument, with committee chairman Sen. Eric Tarr, R-Putnam, saying that legislators should ask the U.S. Treasury Department’s Office of the Inspector General to further review the transfer.
Read the full Mountain State Spotlight article.
Claims of historic revenue surpluses continue to be touted by public officials to call for personal income tax cuts. And yet, our state is currently experiencing numerous funding crises and suffering the consequences of severe underinvestment in critical needs.
After years of flat budgets and major proposed tax cuts, how is the West Virginia state budget serving Mountaineer children and families?
Join us as we discuss what the budget tells us about the state’s priorities and the extent to which the revenue “surpluses” are legitimate. We also hope to learn about your priorities for the ongoing state legislative session.
Our public forum will be held Thursday, Feb. 16 at the Morgantown Public Library (373 Spruce St., Morgantown, WV 26505) at 6pm. RSVP here.
Black Policy Day is coming to the Capitol on February 15!
Join the WV Black Voter Impact Initiative and their partners for breakfast at the Cultural Center starting at 7:00am, followed by a series of activities and speakers related to the Black policy framework.
The day will include a breakfast event that reviews the Black Policy Agenda and provides information about current opportunities and resources. The afternoon will include a youth-centered lunch event with accompanying activities. Throughout the day, there will be opportunities to engage in meetings with lawmakers, space for vendors and tabling
opportunities, youth activities, and much more. Some of the events that day will include an option for virtual participation via a live stream.
Learn more and register for the event here.
The WVCBP’s Elevating the Medicaid Enrollment Experience (EMEE) Voices Project seeks to collect stories from West Virginians who have struggled to access Medicaid across the state. Being conducted in partnership with West Virginians for Affordable Health Care, EMEE Voices will gather insight to inform which Medicaid barriers are most pertinent to West Virginians, specifically people of color.
Do you have a Medicaid experience to share? We’d appreciate your insight. Just fill out the contact form on this webpage and we’ll reach out to you soon. We look forward to learning from you!
You can watch WVCBP’s health policy analyst Rhonda Rogombé and West Virginians for Affordable Health Care’s Mariah Plante further break down the project and its goals in this FB Live.
