As legislative leaders waited to read the fine print, Gov. Jim Justice pledged Monday that his plan to repeal the West Virginia income tax will trigger a jobs boom and higher wages.
Increases in sales, luxury, soft drink and tobacco taxes would help cover the gap caused by eliminating income taxes, which generate $2.1 billion, about 43% of West Virginia’s annual revenue, the governor said. There is no downside to the plan, he added in the first of a series of planned virtual town hall meetings.
“I see none because, in the first phase, I would cut half the income tax on everybody in the state of West Virginia and, in the meantime, sit back and let the growth take us there,” Justice said. “If the growth doesn’t come about, stay right there. You stay right there. It won’t cost us anything except a tremendous amount of people who will come and bring goodness to this state.”
Justice said he opposes raising the food tax.
“We’ve got people out here that are still hurting in a lot of different ways,” he said.
When the town hall session began at 3 p.m., communications directors for the legislative chambers said neither House nor Senate leaders had seen the bill containing the governor’s income tax proposal.
Previous incremental tax cuts were not immediate enough, Justice said.
“My goal is to lower your taxes now,” the governor said. “That is my goal. There’s a million different ways that this can be done.”
Justice reiterated points from his Feb. 13 State of the State address, saying that, if the government receives surplus revenue, such as federal pandemic relief money, it should be put into a “bucket” and used to backfill the budget. Justice called it a second Rainy Day Fund that would make West Virginia appealing to bondholders.
“We could go one of two ways,” the governor said. “We could just spend the money — we could just throw it away. We have the opportunity to put the money aside and establish something. ... From the standpoint of our bondholders, I really and truly believe that is something they would welcome, and welcome immediately.”
A Huntington woman asked the governor if he expects her to do 95% or 100% of her grocery shopping in Ohio, as a result of an increased sales tax.
“You can go buy your stuff in Ohio,” Justice answered. “We’re going to have all the people here.”
A Beckley woman asked if there would be budget cuts or a loss in services to cover the loss of income tax revenue. Justice responded, “No.”
“We want to be prudent,” the governor said. “We want to run our state agencies the very best we possibly can, but we sure don’t want to cut services to achieve this.”
Justice said Senate President Craig Blair, R-Berkeley, and other Senate leaders told him they could find $21 million in cuts that “are not going to hurt us in West Virginia, that we can do without.”
During a question-and-answer session, the governor was asked about House Bill 2003, which passed that chamber Friday. It would limit the governor’s power during a state of emergency.
Justice said the bill would affect “future governors.”
House Bill 2003 would require legislative action to extend a state of emergency declaration beyond 60 days. Whether that would apply to the declaration Justice issued March 16 in response to the COVID-19 pandemic is a point of contention.
Justice said he doesn’t want to “get into a food fight” over emergency powers.
“For future governors, I would hope we wouldn’t strip away their powers to act, because you elected them to act,” Justice said.
The governor said he plans as many town hall meetings as it takes “where you can hear from me about what I know or what [West Virginia Revenue Secretary] Dave Hardy knows.”
The next town hall event is planned for Wednesday evening, Justice said, but he didn’t provide details.
“This is a hot topic around our state and, no question, it ought to be a topic that is blazing hot,” the governor said. “The reason I say that is because of the level of importance it has.”