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House rejects Justice 4 All plan as personal income tax feud spills out into public eye

House Speaker Roger Hanshaw looks on as every member of the House of Delegates votes against the Senate version of HB 3300. (Photo Courtesy/WV Legislative Photography)

CHARLESTON – Gov. Jim Justice vowed to keep fighting for a compromise personal income tax plan between himself and the West Virginia Senate, while the House of Delegates opted to table the plan.

The House unanimously voted against a motion to concur with the Senate’s changes to House Bill 3300, the personal income tax compromise bill developed by the Governor and Senate Finance Committee Chairman Eric Tarr, R-Putnam.

The vote came after Justice held a briefing earlier Friday accusing the House of not moving on the bill. Leadership said they were still interested in working on a personal income tax phase-out, but Friday’s vote was to send a clear message.

“We have no less interest in continuing to work on that issue than we had before,” said House Speaker Roger Hanshaw, R-Clay, during a recess after the vote on HB 3300. “As relayed to me during his public comments, the governor asked or perhaps suggested that we were afraid to take a vote, so we were happy to do that, and we did.”

Justice was critical of the House during a noon virtual briefing.

“They’re not even going to vote on it,” Justice said. “They’re not going to vote on it because they’re afraid to vote on it…they’re not even going to vote on the most important thing this state has ever, ever had in front of it.”

The Senate narrowly passed HB 3300 in an 18-16 vote Wednesday night, though the House didn’t take up the message of the Senate’s passage of the bill until Friday – one day before the 2021 legislative session ends at midnight Saturday.

HB 3300, based on the governor’s “Justice 4 All” plan presented during a summit with legislative leaders and an amendment offered by Tarr, would phase out the personal income tax by 50 percent starting Jan. 1, 2022, with reductions going forward. The cut would be paid for with an 8-percent consumer sales and use tax and removal of multiple sales tax exemptions.

The plan includes a tax rebate for individuals and families earning less than $35,000 per year to soften the effect of the higher sales tax. Revenue from a new tiered severance tax, tobacco tax increases, and revenue from a new Lottery scratch-off ticket would go to a dedicated fund to accelerate phasing out the personal income tax.

The original version of HB 3300 passed by the House included a phase-out of the personal income tax by $150 million every year until the tax is gone. Estimates put the House phase-out at more than a decade. It also includes a fund using parts of existing tax streams to accelerate the phase-out of the personal income tax.

“This body has passed a bipartisan tax reform plan,” said Householder during Friday’s vote. “We showed them the easy way out. West Virginians want real tax relief and no new tax, so why in the word would we want to penalize our small businesses, as they are the lifeblood of our economy? Why would we want to place new burdens on our citizens?”

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