For the second year in a row, Governor Jim Justice has proposed a “flat” budget for Fiscal Year (FY) 2023, with only minor changes from the FY 2022 budget. While the state is currently enjoying large budget surpluses, those surpluses are the result of billions in federal aid, artificially low revenue estimates, and continued unpredictability from the pandemic. Despite the temporary nature of these surpluses, the West Virginia Legislature is pursuing permanent tax cuts that would overwhelmingly benefit the wealthy, while continuing to neglect public programs and services that are in desperate need of investment. And once again, the governor did not include a six-year plan in the budget, leaving the future budget picture murky, and questions about potential budget deficits unanswered.
Our new issue brief examines how the state arrived at its current budget surplus (and why we should be wary of the surplus as an indicator of financial strength), the details of the FY 2023 proposed budget allocations, and how these spending plans could compromise the strength of future West Virginia state budgets.
Key Findings:
Read Sean’s full brief.
Earlier this month, the West Virginia Senate passed two bills that would drastically change the state’s unemployment insurance system and will now be considered in the House of Delegates. SB 2 would reduce the number of weeks a workers can collect unemployment benefits from 26 weeks to as few as 12 weeks. SB 3 would add additional strict work search requirements for unemployed workers collecting unemployment insurance. While both bills would likely hurt unemployed workers while doing little to help businesses fill open jobs, the reduction in weeks under SB 2’s indexing provision could perhaps have broader impacts than intended, undermining existing programs in the unemployment system that help keep workers employed, including a proposed program under SB 3.
West Virginia currently has two programs that utilize the unemployment system to keep workers from becoming unemployed in the first place: partial unemployment benefits, often referred to as “low earnings,” and the yet-to-be-implemented work sharing or short time compensation program. Both programs allow workers to collect some unemployment insurance while staying on their employer’s payroll and provide options to both employers and workers to get through difficult times without workers losing their jobs and income, and without employers losing valuable workers. However, SB 2 cuts the number of available weeks for “all valid unemployment compensation claims” which would include any partial or work sharing unemployment claims, thus severely restricting the ability of employers to use these programs to prevent layoffs.
SB 2’s indexing provision would also undermine a provision in SB 3 where unemployed workers who accept part-time employment for wages that are less than their weekly unemployment benefit can keep their benefit in addition to their wages for the duration of their benefit period.
Further, indexing the number of weeks available to utilize these programs to a statewide unemployment average is harmful to businesses seeking to prevent layoffs. As the statewide average ignores regional variations in the economy, so does it ignore variations in industries and individual businesses.
SB 2 would undermine the effectiveness of all of the programs discussed above and harm working West Virginians. With both the state’s unemployment rate and the number of workers claiming unemployment benefits at historic lows, there is little reason to “fix” a system that isn’t broken.
Read Sean’s full blog post here or a recent article on SB 2 featuring his insight here.
West Virginia lawmakers are currently considering HB 4007, legislation that seeks to eliminate the state personal income tax, the single largest and fairest source of revenue for West Virginia’s budget.
The bill would cut the personal income tax rates by 10 percent across-the-board, with the top 20 percent of income earning households getting a whopping 70 percent of the tax cut. It would also set up the eventual elimination of the income tax by creating a fund into which 50 percent of future revenue surpluses would be deposited in order to continue to phase out the income tax. Make no mistake, this bill starts a ticking clock that would eventually eliminate West Virginia’s personal income tax altogether and, with it, nearly half of our state budget.
HB 4007’s fiscal note makes clear that the income tax reduction plan shares the same flaw as versions that failed to pass last year: relying on a one-time source of revenue – in this case a one-year budget surplus – to fund a permanent, ongoing tax cut. This means that next year and every year after, lawmakers will likely either need to raise other (more regressive) taxes, slash funding for public services, or some combination of both to pay for the ongoing tax cut. HB 4007 would overwhelmingly benefit the wealthiest West Virginians while putting at risk the programs that benefit us all: K-12 education, health care, programs for children, and more.
To use a one-time surplus to cut taxes for the wealthiest households in our state instead of addressing ongoing urgent needs is short-sighted, immoral, and bad for our state’s economy.
Please consider contacting your legislators and telling them that you oppose this proposal, which would disproportionately benefit the wealthiest West Virginians at the expense of low- and middle-income families and create massive budget shortfalls that ensure significant and painful cuts to the public services that touch all of our lives.
Learn more about HB 4007 in Sean’s blog post here or a recent article featuring his insight here.
Essential workers were championed throughout the pandemic for their critical jobs keeping our economy afloat. But now, West Virginia legislators are considering gutting unemployment benefits for those very same workers if they lose their jobs through no fault of their own. Senate Bill 2 would cut the number of weeks that displaced workers are eligible for unemployment insurance from 26 weeks to as few as 12 weeks. This action would make West Virginia a major outlier as only two other states offer just 12 weeks of unemployment benefits. SB 2 will endanger economic security and peace of mind for workers, children, and families, while also harming our state’s economy and doing nothing to address lawmaker’s stated goal of getting West Virginians to work.
Please join us in contacting your legislators and urging them to vote no on SB 2.
Learn more about how SB 2 and SB 3 needlessly harm West Virginia workers in our blog post here.
West Virginia legislators are currently considering whether to — yet again — cut the state’s already low severance tax. This would prove costly and harmful to our state budget.
An additional severance tax cut would largely serve out-of-state corporations and would mean West Virginia could miss out on hundreds of millions of much needed new revenue that it could otherwise use to address outstanding needs or make new — and necessary — investments.
West Virginia’s natural resources are finite, and West Virginians deserve to benefit from their extraction.
Learn more in Sean’s blog post or in our educational video.
Since July 2021, most households with children had received monthly enhanced Child Tax Credit payments of $250- 300 per child. However, the enhanced Child Tax Credit was temporary and expired at the end of 2021 unless Congress acts to extend it in 2022 through the Build Back Better Act or other legislation.
The impact on children and families since the expiration of the enhanced Child Tax Credit has been severe. Between Dec. 2021 and Jan. 2022, there was a staggering 41 percent increase in child poverty nationwide due to the loss of the monthly payments.
If you received monthly Child Tax Credit payments, we’d love to hear how they had been helping your family and how your family has been impacted now that the payments have (at least temporarily) stopped being distributed.
Join us in our advocacy by completing our survey here or participating in the #Unbearable Child Tax Credit campaign.
Learn more about what’s at stake if the enhanced Child Tax Credit is not extended in our blog post here.
Find guidance on how to collect your Child Tax Credit payment 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.
