A bill this session to roll back personal income tax rates had a number of flaws.
The breaks would be triggered when thresholds are met in a proposed new Income Tax Reduction fund, which would have used a number of funding sources, including some that currently don’t exist in law.
Personal income taxes are the largest single source of general revenue in the budget. Personal income growth in West Virginia last year was the lowest in the nation at 0.2%, or about 1/13th of the national average, according to a report released by the Pew Charitable Trusts.
House Bill 4892 would have moved 25% of any budget surplus into the reduction fund (meaning that share of surplus would be unavailable for other programs), $3 million of sales taxes from internet sales and portions of a variety of state Lottery revenues.
However, as Lottery officials pointed out, a lot of those profits already are committed to things like Promise scholarships, paying off Economic Development bonds and providing funding for other state agencies and programs.
It also would take Lottery profits from satellite casinos — which don’t exist. A bill to permit state casinos to each operate one satellite location died last year and was not brought up this session.
It would take profits from Lottery games that have been legalized but are not yet operational, including Keno at non-ABCA licensed locations, and I-Gaming.
Given that flawed funding process, it’s not clear how long it would take the fund to reach the roughly $260 million threshold in the fund to trigger the 0.25% reduction in personal income taxes, a tax break of about $125 million a year that would disproportionately benefit higher-income taxpayers.
The other flaw is that once the rollback is triggered, the size of the annual tax cut would be considerably larger than the revenue coming into the Income Tax Reduction fund, so in short order, the state would have a double-deficit: Revenue taken away from various agencies and programs and put into the fund and a shortfall from the income tax cut.
As Deputy Revenue Secretary Mark Muchow warned in a fiscal note for the bill, “This bill would not accomplish its purported purpose and the formula is inherently flawed.”
Nonetheless, the bill passed the House 89-8 on Feb. 26 and advanced to the Senate floor despite having its flaws exposed in the Senate Finance Committee.
(Finance Chairman Craig Blair, R-Berkeley, called for the committee to be at ease, at which point the video stream shut off; when the video resumed about five minutes later, the bill was immediately advanced on a voice vote with no further discussion.)
Ultimately, the Senate Rules Committee moved the bill off the active Senate calendar Wednesday, where it remained as of this column’s Friday evening deadline.
A bill this flawed and unworkable should never have gotten that far through the legislative process.
Senate leadership on Friday completed its trifecta of key bills that crashed and burned this session with the defeat of the Intermediate Appeals Court bill in the House. That joined failed efforts to repeal the manufacturing inventory tax and decouple greyhound racing at state racetrack casinos.
With the possible exception of the greyhound bill, the one thing the bills had in common was the lack of grassroots support.
Constituents weren’t crying out for the bills, and their advocates were to a great extent from outside the state. Grey2K USA sought to end greyhound racing. Pushing for the intermediate court was the conservative Americans for Prosperity, funded by Charles Koch and his late brother, David, both billionaires.
Perhaps a good lesson to take from these defeats is to spend more time listening to constituents and less to outside interest groups.
Meanwhile, it certainly wasn’t a banner session for inclusiveness.
The CROWN Act (Senate Bill 850), which would have prohibited discrimination based on hairstyles historically associated with a particular race, died an ignominious death in the House Judiciary Committee.
A motion to move the bill to the committee agenda failed on a 14-8 vote, with a two-thirds majority needed for adoption.
Arguments against taking up the bill, voiced by Delegate Tom Fast, R-Fayette, among others, included that it would result in discrimination suits against businesses — the same argument raised in the Legislature’s refusal to add the LGBTQ community to the classes protected from discrimination under the state Fairness Act.
Here’s a little thought: You can’t be subject to discrimination suits if you don’t discriminate.
As noted last week, in 2004 the Legislature changed its rules to move “crossover day” — the last day each house can act on bills originating in that chamber — from the 53rd to the 50th day.
That effectively boosted the number of days committees could work on crossover bills from five to eight, a 60% increase in time (assuming bills need to be reported to the floor by the 58th day, to be read a first time that day).
However, with the latest fad of trying to pass the budget bill by the 60th day of the regular session, the current leadership has hamstrung the committee process. Now, any bill with financial implications, which includes virtually all meaningful bills, needs to be to the floor by the 56th day, effectively reducing the time committees have to work on bills from the other house by 25%.
That takes away the expanded window of time to work on bills from the other house the Legislature gave itself in 2004. The work product has suffered proportionately.
As Delegate John Doyle, D-Jefferson, stated on the House floor, the authors of the state constitution anticipated the state budget could not be completed in the regular session without compromising the legislative process, and spelled out the process for holding a budget session (Art. 6, Sec. 51 (8)).
Finally, regarding Gov. Jim Justice’s advisory opinion from the Ethics Commission giving its blessing for the practice of having the state King Air plane fly to or from Lewisburg to pick him up or drop him off, one thing doesn’t make sense to me.
Looking at the past six months of flight logs, the King Air made 13 trips to and from Lewisburg. On nine occasions, the plane flew from Charleston to Lewisburg the day before the scheduled travel day, with the flight crew adding charges for overnight meals and lodging.
I can understand wanting to get an early start on a travel day, but according to the Aviation Division’s website, the King Air’s average flight time from Charleston to Lewisburg is 18 minutes. Eighteen minutes.
It would be as if I had a morning assignment in Morgantown and agreed to pick up a photographer who lives in Elkview on the way. Rationally, I would probably leave 20 minutes or so early on the day of the assignment to account for the side-trip — but I surely wouldn’t consider spending the night at the La Quinta Inn in Elkview to make sure I wouldn’t be late getting to Morgantown.
There doesn’t appear to be a logistical necessity to fly the plane into Lewisburg the night before travel days, since there are numerous instances of flights where Justice was picked up and, later, dropped off in Lewisburg on the day of travel.
The official word from the Aviation Division is that the plane is “repositioned the evening before a scheduled flight when weather forecasts predict the possibility of low ceilings and/or low visibility the following morning which would prevent the aircraft from landing. Usually this is due to fog.”
I checked the weather history for Lewisburg (actually the Greenbrier Valley Airport) for the mornings of the nine days when the state plane had arrived the evening before the travel day. (Thanks, Weather Underground.)
For seven of the nine mornings, records show no fog and no precipitation. On Sept. 19, 2019, there was fog reported briefly, only during the 5:35 a.m. observation. On Sept. 22, there was no fog, but light rain observed at 5:35 a.m., then light rain to rain from 8:15 a.m. to 1:15 p.m.
(Of course, it is possible the forecasts for each of those days predicted poor weather and turned out to be wrong.)