Blog Posts > House Personal Income Tax Cut Plan Largely Benefits Wealthy, Not Fiscally Sustainable
February 11, 2022

House Personal Income Tax Cut Plan Largely Benefits Wealthy, Not Fiscally Sustainable

HB 4007 – this year’s attempt to cut the personal income tax – would overwhelmingly benefit the wealthiest West Virginians while leading to major revenue losses that would further undermine desperately needed investments in public services.

HB 4007’s 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. As the personal income tax is slashed, even steep across-the-board budget cuts would not be enough to offset the lost revenue, meaning future Legislatures would have to consider both budget cuts and increases to more regressive taxes, such as the sales tax.

And while budget cuts and potential regressive tax increases impact low- & middle-income households the most, those same households would get the smallest savings from the personal income tax cut. On average, the wealthiest 20 percent of West Virginians would receive 70 percent of the initial tax cut, with the wealthiest one percent of West Virginians receiving 16 percent of the tax cut.

Learn more in Sean’s full blog post here or a recent article featuring his insight here.

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.

Urge Lawmakers to Reject Cuts to Unemployment Insurance

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.

Come Work With Us!

The WVCBP is hiring!

We are currently accepting applications for two positions, criminal justice policy analyst and summer policy associate. Applications for both positions will be accepted through Wednesday, February 16. You can find further details here.

Criminal Justice Policy Analyst

The WVCBP is seeking a criminal justice policy analyst to assess the state’s current criminal justice landscape and the impacts of potential reforms. The criminal justice policy analyst plays a crucial role in conducting data-driven research and analysis, educating stakeholders including members of the public and elected officials, and advocating for policy reforms to advance equity, safety, and shared prosperity for all West Virginians.

You can find the full job description here.

Summer Policy Associate

The WVCBP seeks a summer policy associate for an internship to work on issues associated with our research and advocacy priorities. Our summer policy associate works closely with WVCBP staff, coalition partners, and stakeholders in an immersive experience involving research on/advocacy for evidence-based solutions, policies, and practices surrounding issues that impact low- and moderate-income West Virginians.

The WVCBP internship program’s mission is to partner our organization with highly motivated undergraduate and graduate students committed to building shared prosperity through policy change. Our internship program prepares students for potential employment in the non-profit policy world by training them to conduct rigorous data and policy analysis or outreach and advocacy while developing effective communications strategies.

You can find the full job description here.

Medicaid Buy-in Policy Could Help Address Cliff Effect

The Medicaid cliff effect currently places many West Virginians at a crossroads where they’re forced to decide whether accepting higher pay is worth risking their current health coverage.A Medicaid buy-in program could help address this issue.

A Medicaid buy-in is a state-initiated health insurance product that allows people above current Medicaid eligibility levels to pay a monthly premium to receive health coverage through Medicaid or a Medicaid-like plan built atop the state’s existing Medicaid infrastructure. Under a Medicaid buy-in, rather than losing eligibility altogether with a change in income, a worker/household would have the option to move into a plan very similar to the one they are currently enrolled in by beginning to pay an affordable monthly premium based on a sliding scale.

Yesterday, the Health Care for All WV coalition held a press conference in support of HB 3001, a bill under consideration this legislative session to create an affordable Medicaid buy-in program. You can watch the recording here.

Learn more about how a Medicaid buy-in could improve the lives of West Virginians in our blog post here.

Numerous Financial Proposals Being Considered by Legislature, Cumulative Impacts Fiscally Irresponsible

A number of financial proposals are currently under consideration by West Virginia lawmakers. In addition to Governor Justice’s proposal of an average five percent pay raise for public employees, a personal income tax cut, a sales tax cut, and a ballot measure that could have dramatic implications for property taxes are all circulating at the Legislature. A recent article provides further details. Excerpt below:

Financial proposals circulating at the Statehouse could wind up collapsing under the weight of their own competition, through the restraints of federal guidelines or because of dawning fiscal reality.

Gov. Jim Justice’s proposed pay raise of an average 5 percent for most state workers is the best bet. Leaders of both legislative chambers have endorsed the proposal, and the Senate Finance Committee discussed and quickly passed a corresponding bill this afternoon. That’s an estimated $71 million cost.

Meanwhile, an income tax cut proposal moving in the House of Delegates may be in doubt over whether it would run afoul of guidelines that federal relief dollars can’t be translated into permanent tax cuts. Both the House Speaker and governor have raised that question in different venues this week.

A sales tax cut advocated early in the session by Democrats from both chambers fell into the realm of “unlikely” when the Senate president threw cold water on the idea. Anything passing in the GOP-dominated Legislature would need Republican support.

And all this is up against a ballot measure this fall that would give citizens a say-so on whether future legislatures can tinker with property taxes. Right now, property taxes are embedded in the state Constitution, so any ability to change them requires a vote of citizens.

Governor Justice called for a relatively flat state budget this year, again. Even so, there are a lot of moving parts and big ideas.

What’s in short supply is consensus.

“It seems that various tax cut proposals and budget needs are being considered independent of one another despite the fact they would have major cumulative impacts on our ability to provide basic public services,” said Kelly Allen, executive director of the nonprofit West Virginia Center on Budget & Policy.

“Tax cuts passed this year with one-time money will need to be offset again and again in subsequent years, likely requiring nearly immediate tax hikes or budget cuts to offset them.”

Read the full article here.

Additional pieces of legislation beyond those discussed above could also have severe fiscal impacts for the state. Between a proposed constitutional amendment from the 2021 legislative session and bills under consideration this legislative session, West Virginia local governments stand to lose hundreds of millions in revenue each year.

West Virginia Cannot Afford to Cut the Severance Tax (Again)

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.

Help Us Fight to Extend the Enhanced Child Tax Credit by Completing Our Survey and Joining the #Unbearable CTC Campaign

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.

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 the #Unbearable campaign launch here and watch a recording of the launch event here.

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.

Share Your Medicaid Experience with Us!

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.

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