The West Virginia Senate on Friday passed Senate Bill 392, a $21.5 billion budget proposal that would cut West Virginia’s personal income tax by 10%. (Photo by Will Price/West Virginia Legislative Photography)
The Senate forwarded its budget proposal to the House of Representatives this session unusually early in the legislative process. Negotiations will take place in the coming weeks as the Senate and House budgets differ on two major spending items: a tax cut and funding for the state’s education voucher program.
Senators passed it on Friday Senate Bill 392her proposed $21.5 billion budget, which includes a 10 percent cut in West Virginia’s personal income tax.
This also includes $300 million for the Hope Scholarship.
“That means the money … will be there to ensure the solvency of the Hope Scholarship, and I think there’s no doubt that two of the biggest drivers in the budget are the Hope Scholarship and Medicaid,” said Senate Finance Chairman Jason Barrett, R-Berkeley.
The Hope Scholarship, that provides students with approximately $5,200 to utilize for private school tuition, homeschooling and more, and will be open to all West Virginia students for the first time next school year.
“They have seen that the state Senate believes in the Hope Scholarship and they are going to advocate for it,” said Sen. Ben Queen, R-Harrison, who serves as vice chairman of the Senate Finance Committee.
The House budget proposal, which did not reach a vote, aims to minimize state spending on the Hope Scholarship due to other budgetary constraints. A bill was proposed in the House Finance Committee fresh restrictions on the program – such as banning the utilize of funds at out-of-state schools – to bring the price down. Also the budget bill of the House of Representatives does not include any reductions in income tax.
“We’re probably the furthest away from each house’s budget in my 10-year career, but we also have 21 days to negotiate,” Queen said.
Sub: Democrats criticize lack of funding for struggling public schools
The Senate’s budget bill was also adopted A 28-4 vote with two absences. Two Republicans, Sens. Eric Tarr and Craig Hart, voted no.
The Senate’s two Democrats, Mike Woelfel and Joey Garcia, received no votes and both expressed concerns about funding for the $300 million Hope Scholarship as public schools across the state continue to close.
“I never thought I would see the day when the West Virginia Senate would be bragging about spending … $300 million on school vouchers,” said Woelfel, D-Cabell. “Our school boards are in a dire situation and everyone knows it. Let’s just talk about it…Public education is our children’s constitutional right. That’s why I’m against it.”
Garcia, D-Marion, said six schools in his home district are “on the line” because of funding issues. Dozens more school closures or consolidations have been announced in West Virginia this year as degenerating enrollment left schools in financial crisis.
The Senate’s proposed budget did not contain any additional allocation for special education supporta top request from the West Virginia Department of Education as counties have fallen into debt At the same time, it provides mandated services to the state’s growing number of students with disabilities.
Stabilizing public school funding is “not one of the priorities I see in this budget,” Garcia said.
The Senate budget proposal includes full funding for Medicaid as well as money for the Promise Scholarship and the School Construction Authority. It includes increased funding for the state’s higher education institutions and road repairs.
“It’s over $2 billion that we’re putting into road construction,” Queen said.
Queen said the Senate budget got off the ground earlier this year because of “big spending” such as Hope Scholarship funding and the 10% tax cut requested by Gov. Patrick Morrisey.
He added, referring to Morrisey: “The other third person in this negotiation is exerting some political pressure, so we’ll see what comes with that.
Both the Senate and House budget proposals include a 3% pay raise for teachers and public employees.
The Senate agrees to reduce the income tax by 10%
After the budget was passed, senators also agreed Senate Bill 392 This would trigger a 10% reduction in income tax. It would take effect on July 1.
Morrisey proposed a 5% tax cut but asked lawmakers to cap the tax rate at 10%.
The Senate plans to make up some of the lost revenue by taxing certain vaping products in West Virginia.
“The bill increases the (steam) tax and is expected to raise nearly $22 million. The income tax cut is expected to cost $250 million. $125 million of that was paid into the budget,” Barrett said.
West Virginia has a trigger system to accelerate tax cuts, and that formula did not trigger a tax cut this year because the state did not meet its revenue goal last fiscal year.
Senators passed the tax cut bill with a 28 votes to 4.
Sen. Amy Grady, R-Mason, was one of the no votes, citing the tax cut scheme just introduced by the Legislature in 2023.
“That would ruin everything before we see if everything works,” she said. “There aren’t a lot of voters who come to me and say, ‘Hey, thanks for that income tax cut.’ But I have a lot of constituents who come to me and say, “Hey, can we identify that we need more funding for roads?” … I’m in favor of a tax cut. I just don’t think we should be getting to 10% just yet.”
Woelfel and Garcia also voted against the 10% tax cut.
Both cited West Virginia’s nursing care crisis as a reason to vote against the measure.
“I think we are underfunded (child protective services),” Woelfel said. “We owe a duty to these children. What are our priorities? Tax cuts for high earners, in my opinion, is not a priority this Senate should embrace.”
Garcia said, “A $250 million tax cut right now is not the right thing to do when we have so many priorities that we can’t fund now but in the future.”
The bill will be submitted to the House of Representatives for consideration.
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