Drama over Amendment 2 continues
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CHARLESTON -- Gov. Jim Justice's road show against eliminating tangible personal property taxes continued Tuesday, this time with Republican lawmakers in attendance, and union leaders weighing in on the Governor's side.
Justice held his third community conversation against Amendment 2 on Tuesday afternoon in Charleston outside of the Kanawha County Courthouse. He held the first two community conversations in Wheeling on Friday and Beckley on Monday.
"Getting rid of our machinery and inventory tax really and truly is a bet. It's a big gamble," Justice said. "Many, many folks like many of ya'll don't have any idea the danger of Amendment 2."
Amendment 2, adopted by lawmakers in a joint resolution last year and set to be placed on the Nov. 8, ballot, would amend the West Virginia Constitution to allow the Legislature to reduce or eliminate six categories of tangible personal property taxes if voters approve. Tangible personal property tax categories include machinery and equipment, inventory, and motor vehicles.
The amendment has no cost and doesn't reduce or eliminate tangible personal property taxes on its own. It would take the Legislature passing legislation in the future to reduce or eliminate the categories. Revenue from tangible personal property taxes help fund county government operations and county school systems.
Republicans in the state Senate have a draft bill that will be introduced during the 2023 legislative session in January that would cut personal income tax rates by a combined 10 percent and eliminate all six tangible personal property taxes beginning in July 2023 if voters approve Amendment 2 - returning more than $800 million to taxpayers.
Tuesday's Charleston community conversation was attended by Senate President Craig Blair, R-Berkeley. In a press release earlier Tuesday, Blair and Senate Finance Committee Chairman Eric Tarr, R-Putnam, called on Justice to allow legislative supporters of Amendment 2 to also participate in the community conversations and provide a counterpoint to Justice and other opponents.
"We want to keep the conversation honest, that way the voters can get the right information and make the right decisions," Blair said, attending Justice's Charleston event in person. "It's a one-sided conversation and the information is inaccurate … the voters are not getting the right information."
The Republican tax reform plan would replace the lost county tax revenue from the elimination of tangible personal property taxes with funding from the general revenue budget, using a formula that would provide counties a minimum of $1 million over and above their annual tax assessments. According to the West Virginia Association of Counties, the total assessment for all 55 counties combined in tax year 2021 was more than $515 million, though the actual dollar amount collected by counties has not been released.
Justice previously supported efforts similar to Amendment 2, but since 2020 has focused on phasing out the personal income tax. An effort to do that failed after the House of Delegates said no. But Justice and the House were on the same side during the recent special session, when Justice proposed a 10 percent personal income tax cut. The Senate never took up the bill.
Dave Hardy, the cabinet secretary for the Department of Revenue and a former Kanawha County Commission member, said that a proposal to phase out the personal income tax will be introduced in the 2023 legislative session, beginning with a 10 percent personal income tax cut.
"We are starting the process right now in 2022 in proposing to the West Virginia Legislature that we start phasing out the West Virginia income tax, starting with a 10% proposed cut that will put $271 million immediately into pockets of all of us hardworking West Virginians," Hardy said. "That's our goal and that's where we are going."
"I'm a real believer that you, the people, know way better than Charleston knows," Justice said. "If you vote for this, at the end of the day you'll put a stake in the heart of eliminating the personal income tax in West Virginia forever and you'll put us at great big risk."
Justice said he did not want to have a "food fight" with the Republicans in the Legislature, though he has spent two months attacking Blair and Senate Republicans for not supporting his 10 percent personal income tax cut and called the Legislature "the swamp," accusing Republican lawmakers of being in the pocket of big business. Blair accused Justice of talking out both sides of his mouth having previously supported eliminating tangible personal property taxes.
"I'm not here to get into a debate. I'm not here to get into a food fight with me and the Senate or me with anybody," Justice said. "I'm very respectful of their opinions and what they think … I can't fathom that Republicans would walk away from cutting taxes and getting money back in your hands today."
"We had no idea he was going to oppose Amendment 2 even though he supported it in 2018, 19, and 20 in his State of the State," Blair said. "If we're dealing with schizophrenia, just tell me so. The fact is we know Amendment 2 is the right thing to do for the people of West Virginia."
A coalition of public employee unions representing teachers, school service personnel, school nurses, sheriffs' deputies, and others held a press conference Tuesday morning announcing their opposition to Amendment 2 and Amendment 4, another constitutional amendment on the ballot that would give lawmakers rule-making review authority over the Department of Education and state Board of Education -- the only state agency that doesn't have to submit its proposed rules to the Legislature.
"The threat is great," said Joe White, executive director of the West Virginia School Service Personnel Association. "We do not need to expand the power of the Legislature. We need to have some local control and say within each county."
"There is some confusion regarding the constitutional amendments and county school levies which are on the ballot in November," said Fred Albert, president of the West Virginia chapter of the American Federation of Teachers. "Our students need the resources that these levies provide. Do not confuse the school levies with the constitutional amendments."
"When you hear politicians start out the discussion saying 'trust me,' you know you're in trouble," said Dale Lee, president of the West Virginia Education Association. "What (Amendment 2) does is take money from public education. There is no plan that will fulfill the excess levies, the bond levies that counties have. There are no plans to make sure that our counties and students are getting the education they need."
In a statement Tuesday afternoon, Blair pushed back on claims that the Senate tax reform plan -- if voters approved Amendment 2 -- would harm county levies that rely primarily on real estate property taxes and motor vehicle tangible personal property tax revenue that would be replaced by the Senate Republican tax plan.
"If Amendment 2 passes and the Legislature eliminates the tax on cars, the money from real estate taxes in those levies stays just the same," Blair said. "The language of Amendment 2 affects only personal property, not real estate. It could not be more clear.
"We believe that West Virginia families deserve money back in their pockets, and there is no better way to do that than to eliminate the 13th car payment most families make on their automobiles each year," Blair added.