Perhaps the biggest battle in the ongoing West Virginia tax reform war was won Tuesday by Gov. Jim Justice as voters rejected Amendment 2.
Nearly two-thirds of voters rejected the proposed amendment to the state constitution that would have allowed the Legislature to affect business inventory, equipment and machinery taxes and personal property taxes on motor vehicles.
With 99% of precincts reporting, according to MetroNews, 308,278 votes, 65% of the total cast, had gone against the amendment.
Three other proposed amendments, including one on education, also were rejected.
It wasn’t clear Tuesday whether the voters’ collective choice would be enough to cause at least a ceasefire in the ongoing 2022 tax reform war of words among Justice, Senate President Craig Blair, R-Berkeley, and Senate Finance Chairman Eric Tarr, R-Putnam.
Justice, also a Republican, called the defeat of Amendment 2 a win for political conservatives.
“This is a day when conservative people, whether they be conservative Democrats or conservative Republicans, win,” Justice said. “Today’s a win.”
Justice, who mischaracterized the Senate’s proposed tax reform plan during his ‘Community Conversation’ rallies against Amendment 2, said public officials were “not supposed to trick the people.”
“Now that the people have spoken, if the legislature tires to play games with them and doesn’t listen to the people, they’ll take names,” Justice said. “That’s all there is to it. They’ll be other elections, and absolutely they’ll remember. ...The people have really honored me in many ways.”
Blair was disappointed the amendment failed but otherwise was upbeat Tuesday evening as unofficial election results had Republican candidates winning 16 of 17 open state Senate seats.
Blair felt voters overall were confused by the amendments, especially with what he said was misinformation put out by Justice and other political organizations.
“It’s clear the people trust us because we keep gaining seats year after year,” Blair said. “We’re trying to do the absolute best we can. I’ve never seen it where it was so hard to be able to give a tax break back to the people, but that’s OK. We’ve got to keep working, moving forward into the further to be able to work for the people of West Virginia to make their lives better.”
Without the ability to affect those property taxes, it’s not clear what direction tax reform talks will take after Justice spent the summer berating Blair and Tarr for not supporting his tax plan and erroneously telling voters the Senate didn’t have a plan.
The tax reform discussion will continue, Blair said, but Senate Republicans will make a collective decision when they convene after the election.
“Unlike how the governor portrayed the Senate as a swamp, these decisions will be made as a collective,” Blair said.
House Speaker Roger Hanshaw, R-Clay, likewise said putting four proposed constitutional amendments on one ballot might have been too much to ask voters to consider in a single election, saying he fielded calls about the amendments until the polls closed Tuesday.
“For me, the key lesson here was that we need to give voters an opportunity to have access to complete and accurate and factual information as early in the process as possible and not have too many opportunities for confusion to show up in the process,” Hanshaw said. “With four amendments on the ballot, there were too many opportunities for folks who were, frankly, looking to disseminate some less-than-accurate information to do so.”
Justice had asked voters to reject Amendment 2, saying it would take financial control away from local governments and the initiative relied on an “if you build it, they will come” mentality.
The amendment itself was an aside to the tax reform disagreement between Justice and Senate leaders as to whose tax plan would be the beneficiary of a $1.3 billion tax revenue surplus the state had in fiscal year 2022, which ended in June.
Instead of the Senate’s plan, Justice wanted the Legislature to adopt his plan to reduce the personal income tax rate by 10%. The House adopted Justice’s plan during a special session in July, but the Senate declined to take it up.
Blair previously said an income tax reduction is good on its face, but it did little to spur the economic development West Virginia needs.
Blair and Tarr announced the Senate’s tax reform plan in July and released the proposed legislation to make it law in August.
The Senate political majority leaders, with Justice’s support until the past few months, had wanted to get rid of those taxes, which fund county governments, boards of education and support municipal governments.
The Senate’s plan would have used surplus tax revenue to reimburse counties for the revenue they would lose if those taxes were repealed. The Senate’s plan also would have eventually called for reductions in the personal income tax, if the state met certain economic thresholds.
House of Delegates leaders largely stayed out of the summer fray among Justice, Blair and Tarr.
Hanshaw and House Finance Chairman Eric Householder, R-Berkeley, both supported the adoption of Amendment 2, saying it would open up the conversation for tax reform.
Householder previously said he did not believe the Senate’s plan, as proposed, would have passed the House.
Hanshaw on Tuesday felt like the tax reform conversation would take a new turn.
“I’m not sure that it necessarily changes,” Hanshaw said. “At least, what we’re talking about takes a new direction. We’re back to talking about the way we structure business taxation and business recruitment and attraction in West Virginia, in the given parameters of the constitution that we have had all along.”
In other amendment votes Tuesday:
With 99% of precincts reporting, 58% of voters rejected an amendment that would have prohibited state courts from intervening in impeachment proceedings.
The proposed amendment was in direct response to a specially appointed court’s ruling in the case of Supreme Court Justice Margaret Workman vs. Senate President Mitch Carmichael, most commonly referred to as Workman v. Carmichael. The case effectively put a halt to impeachment proceedings in the Legislature.
Proponents argued the amendment would restore the balance of power between the legislative and judicial branches. They said the Supreme Court overstepped its boundaries in the Workman ruling. Opponents said the court’s ruling was fair and the amendment would upset the balance between the two branches.
Hanshaw and Senate Judiciary Chairman Charles Trump, R-Morgan, had been among the biggest proponents of the amendment.
“We laid [the amendments] before the people for their consideration. The citizens have rendered their judgment,” Trump said. “The people are sovereign. They are the authors of our constitution, and they decide what it will or will not say. We have to respect the judgment that’s been rendered by the people.”
Hanshaw said the amendment’s defeat was the most disappointing for him on a personal level.
“Workman v. Carmichael has to go down as one of the worst decisions ever authored by any court anywhere,” Hanshaw said. “This amendment was about making sure that Workman v. Carmichael was put in its proper place, which is the trash receptacle, and the proper balance of power, as it was spelled out in the constitution, was maintained.”
Amendment 3 quietly rejectedWith 99% of precincts reporting, 55% of voters had rejected an amendment that would have allowed churches to legally incorporate. West Virginia is the only state in the country to prohibit that action.
The resolution was inspired by a federal judge’s ruling in Virginia that prohibiting a church from incorporating violates its First Amendment rights, Trump said in 2021, when the Legislature adopted the resolution putting the question on the ballot.
The late Rev. Jerry Falwell Sr., pastor of Thomas Road Baptist Church in Lynchburg, Virginia, sued the State Corporation Commission in 2002 over a state constitutional provision prohibiting churches from incorporating.
The West Virginia Constitution derived its language on the issue from Virginia’s constitution, Trump said in 2021, so West Virginia’s constitutional language on the matter remains intact.