West Virginia Government Shutdown Looming?

Charleston, WV – House Speaker Tim Armstead says that the majority Republican decision to move budget talks toward a steeper reduction in the personal income tax and a larger sales tax are making a shutdown more likely.

“I think their unwillingness to try to reach middle ground on this issue makes it more likely that it’s going to take longer to resolve this and puts more of a risk in play that there will be a shutdown, which no one in the House wants to see take place,” Armstead said this afternoon in a telephone interview with Metro News.

“I believe their actions today don’t make a shutdown less likely; they make it more likely.”

The Senate Select Committee on Tax Reform passes and amended version of the bill. That bill would raise the state sales tax to 7.25% from the original 6.95% in the bill that passed the senate last week.

This proposal would reduce the personal income tax by 15% on average. Taxpayers would not see this reduction until Jan. 1, 2018. This proposal is also slated to drop the income tax by another 5% the following year. The tax then would continue to be stepped down, possibly phased out, over time and based on economic triggers.

The committee also approved a reduction in the number of proposed personal income tax brackets from four back to three, with the top bracket starting at $35,000. The fourth bracket earlier had been added at the request of Senate Democrats.

“I know members of the public and even reports in the media have had concerns about this being a constantly evolving, changing piece of legislation, but that’s the way this process works,” Senate Majority Leader Ryan Ferns said today after the committee meeting.

“A lot of those changes weren’t necessarily the desires of the Senate Republicans who have spearheaded this whole initiative but have been to accommodate concerns of our Democratic colleagues in the Senate, our colleagues both Democrat and Republican in the House, and that’s really the reason for the ongoing changes.”

Armstead was incredulous to hear the 6.95 percent sales tax that was in the Senate’s revenue plan last week be described as coming in the direction of the House. Negotiators have said privately that a 6.5 percent sales tax is the upper limit a majority of House members might be willing to accept.

“Do they seriously believe that going from 7 percent to 6.95 percent is somehow moving in the direction of the House?” Armstead asked. “No one believes that was a serious proposal to try to work with the House or to try to address any of the concerns the House has raised. I don’t think anyone or outside of the Capitol would believe that is a serious effort at reaching common ground.”

Delegates are set to return at 4 p.m. Tuesday.

The Senate adjourned until 9:30 a.m. Tuesday. The revenue bill will be reported back to the full Senate from the committee and then referenced to the Senate Finance Committee, where chairman Mike Hall has consistently expressed reservations about the effects of the income tax reductions.

If the bill winds up being passed by the full Senate this week, the next likely destination would be a conference committee of lawmakers from both the House and Senate.

 

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