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Justice: “Cutting our personal income tax will put money in your pocket and bring prosperity to our state for generations. But we need to act now.”
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CHARLESTON, WV – Coming off the greatest year of revenue collections in state history, Gov. Jim Justice announced today that he is proposing a permanent 10% cut of the personal income tax.
Under the Governor’s proposal, the 10% tax cut will be retroactive to the beginning of the 2022 calendar year, putting $250 million back in the pockets of West Virginians.
“Cutting our personal income tax will put money in your pocket and bring prosperity to our state for generations. But we need to act now, especially when you consider the unbelievable economic growth we’ve achieved this year,” Gov. Justice said during a press conference at the State Capitol today.
The Governor announced that he will call a Special Session of the West Virginia Legislature to coincide with this month’s interim meetings on July 24-26 to allow legislators to vote on his proposal.
The Governor’s proposal is simple enough to be contained in a two-page bill and is a true cut – reducing the Personal Income Tax without raising any other taxes in the process.
The 10% personal income tax reduction is the maximum amount that can be cut while remaining in compliance with funding stipulations in the American Rescue Plan Act (ARPA).
“We would cut even more if it weren’t for these federal regulations. Under the current guidelines, this is absolutely the most money we can put back in the pockets of hardworking West Virginians,” Gov. Justice said. “I wish we could eliminate the personal income tax altogether, but we need to get the ball rolling – now more than ever. In the past year, gas prices have gotten out of control and inflation is through the roof. West Virginians need help right now.”
If the Legislature passes his bill, the reduction will be automatic on October payroll withholding, and applies to September 15 estimated tax payments as well. The retroactive amount will come as a refund when West Virginians file their 2022 taxes.
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During the press conference, Gov. Justice also announced that West Virginia’s cumulative revenue collections for Fiscal Year 2022 finished at $1.308 billion over estimate – shattering the all-time record for biggest single-year revenue surplus in state history.
“We’ve been on track to break this record all year long. Month after month we set record after record. So it’s only fitting that we are now able to cap it off by setting a new standard for the largest revenue surplus of all-time,” Gov. Justice said. “It’s an unbelievable accomplishment. West Virginians should be over-the-moon proud of what we’ve accomplished.”
Total collections for the historic revenue year came in at $5.888 billion – 22.1% ahead of prior year adjusted collections – marking the first time in State history that final collections for a single year have exceeded $5 billion.
The Governor was joined by West Virginia Department of Revenue Secretary Dave Hardy for the announcement.
“What we’ve been able to accomplish under the guidance of Governor Justice really is unprecedented in West Virginia history and it’s made all the more impressive when you remember that the Governor inherited a $500 million budget deficit when he first stepped into office,” Sec. Hardy said. “For perspective, our total revenue growth in Fiscal Year 2022 alone was three-and-a-half times the combined revenue growth in West Virginia for the entire decade from fiscal years 2009 to 2018.”
June 2022 collections came in at $201 million over estimate. Total monthly collections of $662.4 million were 33.7% ahead of prior year receipts.
The record-setting surpluses, which have opened up an avenue to a major reduction in the personal income tax, are the result of West Virginia’s recent economic success and maintaining an essentially flat budget several years running.
“I’ve said over and over that my number one job as Governor is to ensure the economic success of our state and I’m beyond proud to say that we’re succeeding in a big way – bigger than all the naysayers ever dreamed we could do in West Virginia,” Gov. Justice said. “But we can’t stop now. We’ve come too far. Our next step has to be to ensure prosperity in West Virginia for the long-term, and the best way to do that is by reducing – and eventually eliminating – our state income tax.
“I’ve been the biggest proponent of completely eliminating our state personal income tax. It will drive job growth, population growth, and prosperity in West Virginia. But the most important thing to do is get the ball rolling right away. Then, we can keep coming back and chipping away at our personal income tax until it’s completely eliminated,” Gov. Justice continued. “When you look at states like Florida, Texas, and Tennessee, they have no personal income tax and their state economies are growing like crazy. There is a direct correlation. People are moving to no-income-tax states because they can keep more of their hard-earned paycheck, which spurs ever greater economic activity. It’s a cycle of goodness producing goodness, and that’s what we want in West Virginia.
“Throughout my time as Governor, I have never wanted anything for myself. All I’ve ever wanted was goodness for our state and our people; to put us on a rocket ship ride to prosperity. That’s what the people of this state trusted me to do when they elected me and that faith has paid off in a big way. Now, I’m asking West Virginians to trust me again and allow me to lead us forward on what is a once-in-a-lifetime opportunity to fundamentally change the economic potential of our state forever.”
The Governor was also joined by State Tourism Secretary Chelsea Ruby and Economic Development Secretary Mitch Carmichael.
“I have been very fortunate to sit next to the Governor for many events as we have made landmark announcements in this state, but of all of those, today might be one of the biggest ones,” Sec. Ruby said. “I’m not a tax expert, but I am a numbers person, and the numbers are incredible. The numbers that we’re seeing in our state revenues very closely mirror what we’re seeing in tourism. All of our metrics are up, and one of the most encouraging things we’re seeing is that people are starting to move here. West Virginia is currently tied with South Carolina as the number two inbound state in the entire country. Governor, I want to thank you for leading the transformation in this state.”
“Governor, I’d like to thank you, so much, for your diligence, your persistence, and your consistency around cutting taxes for the people of West Virginia. More than anything, cutting taxes will generate growth jobs and opportunity for our state,” Sec. Carmichael said. “Your first year as Governor was my first year as Senate President, and we faced a $500 million budget deficit. But fast forward to today, and we’re announcing a $1.3 billion surplus and an opportunity to cut taxes. In conjunction with all that great growth and opportunity, we have recruited world-class companies to our state over the past several months. These are all opportunities for more jobs, more growth for West Virginia citizens. It really does change the lives of our people, and I’m very proud to be a part of the organization that you’re leading to help bring prosperity to West Virginia.”
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Additional data on FY 2022 revenue collections:
The following four revenue sources account for roughly 99% of the FY 2022 revenue collection surplus:
June personal income tax collections totaled $232 million. Monthly collections exceeded estimates by roughly $31.1 million and were 22.8% ahead of prior year. FY 2022 collections of $2.5 billion were a record $461.5 million above estimate and 16.6% ahead of prior year (i.e., after removal of prior year deferred collections).
June severance tax collections totaled a record $120.9 million. Collections were $80.7 million above estimate and 115% ahead of last year. FY 2022 severance tax collections were a record $768.8 million, $438.9 million above estimate and 180% ahead of last year.
June corporation net income tax collections of $71.7 million were $46.7 million above estimate and 12.3% ahead of last year. FY 2022 CNIT totaled $366.3 million, $206 million above estimate and 38.5% ahead of prior year adjusted receipts (i.e., after removal of prior year deferred collections).
June consumer sales tax receipts of $192.8 million were $31 million above estimate and 9.7% above prior year. FY 2022 CST collections totaled a record $1.655 billion, $181.7 million above estimate and 7.7% ahead of prior year.
Click here to read monthly revenue and cash flow reports from the West Virginia State Budget Office
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Gov. Justice’s rocket ship ride:
Under Gov. Justice’s leadership, West Virginia continues to enjoy an unprecedented era of success and prosperity.
After inheriting a $500 million budget deficit, Gov. Justice has led the state to a string of consistent budget surpluses by using his lifelong experience as a businessman to make West Virginia a more business-friendly state and by standing behind the energy industry.
At the same time, West Virginia has achieved record-low unemployment rates. The state’s seasonally adjusted unemployment rate decreased to 3.5% for May 2022, breaking the all-time record for the lowest unemployment rate recorded in West Virginia history for the 8th consecutive month.
West Virginia is finally competing on the world stage and recruiting world-class companies to our state as shown in several major economic development announcements this year. Nucor Corporation announced that they selected Mason County as the location for a state-of-the-art sheet steel mill. This record investment will exceed $2.7 billion, making it the largest in West Virginia history, as well as the largest single investment Nucor has ever made. GreenPower Motor Company announced an agreement with the state to manufacture zero-emission, all-electric school buses in South Charleston, bringing hundreds of new jobs and millions of dollars in economic impact to West Virginia. Owens & Minor, a Fortune 500 company that provides medical supplies, is going to expand on a deal they previously had with WVU Medicine and create over 125 jobs at a healthcare products preparedness and supply center in Morgantown. Omnis Building Technologies will build a $40 million, 150,000-square-foot facility in Bluefield to manufacture housing materials that will revolutionize the future of residential construction, creating 150-300 jobs in the process. Klöckner Pentaplast has announced a multimillion-dollar expansion of their West Virginia facility. PepsiCo is building a pair of new distribution facilities this year, representing a combined $32.5 million investment, while providing 185 jobs in West Virginia. Veloxint, a manufacturer of nanocrystalline metal alloys, is moving to Touchstone Research Laboratory Ltd. in Triadelphia and is expected to create another 200-300 new jobs over the next four years.
Gov. Justice also announced that West Virginia reached the 2nd-highest export growth rate of any state in the nation for 2021.
Meanwhile, the Governor’s Roads To Prosperity program is the state’s largest-ever investment in road maintenance and improvement; after 50 years of neglecting its roads, the state has committed more than $2 billion dollars to fixing them. Teachers and state employees have received their two largest pay raises ever. Thanks to Gov. Justice, Veterans now live in West Virginia tax-free and senior citizens do not face state taxes on social security. The Governor has also led West Virginia through a once-in-a-century pandemic, protecting the state’s most vulnerable citizens.
People are more excited than ever to be in West Virginia. From April 2010 to July 2019, more than 43,000 people moved out of the state. However, from 2020 through 2021, net migration is up in West Virginia for the first time in decades, with over 2,000 people moving into the state, making West Virginia one of the top states in the entire nation that people are moving into on a percentage basis.
Increased investments in the state’s tourism efforts have visitation and intrigue in West Virginia through the roof. West Virginia was recently named a top-10 travel region in the world to visit by Lonely Planet; the only state to earn this prestigious distinction and the state was also recently selected as one of the Best Places to Go by Condé Nast Traveler. West Virginia was also recently named as one of CBS’s top destinations for family vacations in 2022.
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