An increased historic tax credit rate is included in revenue plans proposed by both the Senate and the House of Delegates. Below Brad McElhinney provides an overview of the two plans and an analysis of their anticipated results.
CHARLESTON, W.Va. — Assessments of two different revenue plans by the Senate and House of Delegates show very different results.
The House proposal is expected to raise a little more than $100 million in additional revenue for the coming fiscal year, mainly by eliminating sales tax exemptions on some economic sectors. That leaves the plan about $150 million short of bridging the state’s fiscal gap.
The Senate proposal raises an estimated $147 million for the coming fiscal year, both by eliminating some exemptions and also by raising the state sales tax to 7.25 percent. But it results in significant revenue reductions in the years after that through proposed tax decreases.
The plans have been at odds within the Legislature as the House passed its proposal with a bipartisan 74-17 vote on May 16
The Senate passed its plan May 24 on a 18-13 vote that included all Republicans except for Senator Randy Smith voting in favor and all Democrats against. The House then voted 85-0 to refuse to concur.
The Legislature then recessed from its special session until June 5, this coming Monday, to allow time for negotiations among all sides and Gov. Jim Justice.
What might result is some sort of compromise, but it’s worth getting into the nuts and bolts of what each house’s plan is expected to do to affect Justice’s budget proposal of $4.35 billion. This is based on fiscal notes filed by the state Department of Revenue, assessing the potential effects of each bill. The assessments don’t take into account any potential boost in economic activity that could result from changes to policy.