State senators worked into the late evening Wednesday taking up pending amendments and expected passage of the Senate version of the budget bill, as well as the latest incarnation of a bill to cut the state personal income tax.
A pending amendment to the Senate version of the budget bill would nearly restore major budget cuts to West Virginia University, Marshall University and the Educational Broadcasting Authority, which operates West Virginia Public Broadcasting.
The Senate version of the 2021-22 budget plan had cut WVU’s general revenue appropriation by $12 million, Marshall’s appropriation by $6 million, and had zeroed out funding for Public Broadcasting.
As drafted, the pending amendment would fund WVU at $95.56 million, about $1.5 million less than the $97.02 million appropriation in the governor’s proposed budget.
Marshall would receive $46.06 million, about $700,000 less than the $46.76 million recommended in the governor’s spending plan.
The amendment would restore $3.77 million of EBA funding, about $60,000 less than the governor’s plan, but vastly better than no funding.
The funding levels in the amendment appear consistent with a requirement in the Senate version of the budget that virtually all state agencies and offices cut spending by 1.5% in the coming budget year.
Initially, the Senate budget plan had cut nearly $80 million of spending from Gov. Jim Justice’s $4.569 billion 2021-22 budget, which itself had cut spending by nearly $4 million from the current 2020-21 budget.
Senators were also expected to take up a new amendment to the proposed income tax cut plan.
As drafted, the amendment would reduce the Senate’s original proposal for an 8.5% state sales tax to 8%. The 8% tax would also apply to soft drinks and the sale of prepared foods.
It retains elimination of exemptions for a variety of professional services, including exemptions for broadcasting, print and outdoor advertising.
The amendment provides about $40 million of rebates for persons making $35,000 a year and less, to offset what otherwise would be higher tax burdens for those individuals with the shift of taxes from income taxes to higher sales taxes.
At a summit with legislators Monday, Justice said he insisted on the tax credits to assure his tax plan will not hurt West Virginians financially.
“I tried to make every single breathing West Virginian cash positive,” he said.
It also includes a tiered severance tax plan sought by Justice that increases tax rates on coal, oil and natural gas as market prices increase.
The amendment significantly modifies the income tax phase-out, creating a Personal Income Tax Reduction Fund, funded with budget surplus funds, excess Rainy Day funds and other appropriations. According to the amendment, each $50 million in that fund would correspond with a roughly 1.25% reduction in income tax rates.
The first year reduction in income taxes would be about $118 million, according to Senate Finance Chairman Eric Tarr, R-Putnam.
That’s a far slower phase-out than the $1.08 billion first-year cut in the $2.1 billion in annual personal income tax collections.