WHEELING — Gov. Jim Justice has set out around the state touting his plan to cut state personal income tax by 50% over the next three years, but a West Virginia policy research group on Thursday cautioned that such a plan would not benefit those among the state’s most vulnerable.

Kelly Allen, executive director of the West Virginia Center on Budget and Policy, discussed ways her group believes Justice’s plan could undermine investments in programs and services that support families, workers, and small businesses. Allen was invited by the Ohio County Family Resource Network to speak at West Virginia Northern Community College.

Justice is promoting House Bill 2526, which passed overwhelmingly in the House of Delegates and is urging the state Senate to pass it as well.

The bill would kick in a 30% cut retroactive to January of this year to start, returning $163 million to taxpayers. July would see another 10% cut, returning $1.085 billion to taxpayers, and the final 10% cut would come in July 2024, returning $1.229 billion to taxpayers when fully implemented.

One of the first things Allen mentioned to the small group at Thursday’s talk was that, according to the WVCBP’s figures, low-income earners in West Virginia would see fewest dollars coming back to them with the proposed tax cut, while the state’s wealthiest would receive the lion’s share.

“The top 20% of households in West Virginia would get two-thirds of the tax cut,” Allen said. “The top 1% would get one out of every six dollars.

“The lowest-income families on average would get $48 a year, a couple bucks a month. Middle-income families would get about $699 a year.

But the big bulk of income tax cuts go to the wealthiest household in the Governor’s plan.”

Allen said the budget surpluses fueling the tax cut talk are coming mainly from gas severance tax collections, which she said was a volatile, unstable revenue source. With every gas boom, she said, there’s a gas bust. Inflation also played a part, she added.

As the cost of items increases, so does sales tax collections. If prices drop again, so will the money received from those sales taxes.

Those surpluses also have come from the flat state budgets passed over the past few years, Allen said.

But those budgets have not adequately invested in programs like PEIA, the insurance for state employees, child welfare services and educational programs. For instance, Allen said, PEIA will need an additional $376.5 million in 2027 to stay fully funded.

The WVCBP has offered its own solution to move forward, Allen said. For the annual cost of HB 2526, the state could invest in other programs to benefit residents. As part of the nearly $1.5 billion cost, according to Allen, the state could spend $350 million to enact a $1,000 tax credit per child in West Virginia, spend $376 million to close the PEIA shortfall and spend $150 million to invest in job training, among other suggestions.

“We put together a laundry list of things we could do for the same cost,” Allen said. “By and large, those would touch darn near everybody.”

Jenny Craig, a teacher at Wheeling Middle School and president of the Ohio County Education Association, said the future of PEIA is a concern for her and her fellow teachers. WVU Medicine recently announced that, if PEIA reimbursement issues aren’t remedied in the 2023 legislative session, WVU Medicine Wheeling Hospital would no longer accept PEIA policyholders for inpatient care starting in July.

Yet the ramifications go even further, Craig said.

“All of the public employees and all of the services they provide for our families, that’s all going to be lost, because not only do you see these shortcuts with PEIA … our (Department of Health and Human Resources) and child protective service systems are severely underfunded,” Craig said. “We should be putting more money into the folks who are on the front lines in West Virginia to make sure our children in West Virginia are protected.”

Claudia Raymer, executive director of the Ohio County Family Resource Network, said supporting children and families, especially those most vulnerable, should be the state government’s primary mission. She supports the suggestions of the WVCBP rather than the proposed tax cut plan.

“We know that some of these policies strengthen child abuse prevention,” Raymer said. “We want to prevent it. So when you talk about a child care tax credit and child care subsidies, we know that is an effective child abuse prevention policy. All these policies that support families, especially the most at-risk families, are how you make meaningful change in the state.”