It is not just for West Virginia to cut $300 million a year in taxes paid by businesses, many of them out-of-state interests, and then turn around and balance the budget on the backs of all the people living here, in the form of higher income taxes, sales taxes and fees. It is not just, but amazingly, it is what West Virginia residents keep saying they want.
In comments, letters to the editor and at least one poll, West Virginians say they would rather pay more themselves than see important functions of the state further erode, or break down altogether because of budget cuts.
People, it seems, want to have confidence that emergency responders will come when they call, that their schools will open, that someone will be there to keep the fecal coliform out of the drinking water. Oh, and if the people, acting collectively as the state of West Virginia, could set something aside for the future, the way of all good grandparents, that would be ideal. Think road building and repair. Think educational opportunities that launch young adults into meaningful, gainful employment.
Governing by the ideology of all tax cuts all the time doesn’t work. West Virginia residents and taxpayers know it. Do members of the Legislature and their out-of-state political bosses?
Some ideals, however, should guide the public budget. A top one is that those who can afford to pay more should pay more. This is done intelligently and fairly through state income tax.
In West Virginia, even people who are not in the top tax brackets, people who clip coupons and don’t buy a new car (or phone) at the first itch for one, would pay more for the common good.
That doesn’t mean anyone wants to waste their money. People want things to function properly, without all the drama and uncertainty of recent years.
The just thing would be for the Legislature to approve a budget that preserves essential state functions, that builds up the state’s Rainy Day savings and that pays off old irresponsible debts (a legacy of bad grandparents). To be fair to all those West Virginians working to make a living here, the Legislature should restore some part of the business taxes that were cut, strategically and carefully, of course.
Early on, Gov. Jim Justice suggested a 0.2 percent tax on business receipts. Alternatively, the state could restore a corporate net income tax, which takes expenses into account and taxes profit rather than just gross receipts. Or, the state could revisit the business franchise tax, which formerly taxed businesses more as their debt fell and their balance sheets improved. That’s good for around $200 million, by some estimates.
Another part of the solution is to raise taxes on the highest incomes, another 3 percent on household income over $200,000, for example. For a person making $201,000 a year, such an increase would amount to another $30 a year in state taxes, but would raise about $96 million for the state and not harm a soul for whom $30 would be a real hardship.
Other possibilities include raising the natural gas and oil severance tax. Sales taxes are tricky because they can easily harm border-area merchants and fall disproportionately on the poorest residents. But a few make sense — digital downloads of books and music; cellphones; problematic substances that contribute to public health expenses, such as opioids, alcohol, tobacco and sugary drinks; and someday, marijuana.
In December, the West Virginia Center on Budget & Policy polled 603 residents statewide and found 70 percent were willing to pay more to avoid further cuts in state government (with a margin of error of plus or minus 4 percentage points).
Residents understand there is an unsustainable formula at work. West Virginia is spending down its Rainy Day funds, cutting important activities, not taking in enough to cover expenses and has nothing left to invest in the future. Paying fair taxes is a civic duty that moves the state where its residents want to go.
If people opposed balancing the budget by cuts alone four months ago, imagine how many more will feel that way when doors close, layoffs come, paychecks stop and the effects ripple through the rest of the economy.