CHARLESTON — Gov. Jim Justice is moving forward with plans to call a special session of the West Virginia Legislature next week on a 10 percent personal income tax proposal, though it remains to be seen if there is enough support in both the House of Delegates and Senate.

Justice released a proclamation Wednesday calling the Legislature into special session along with the draft bill language for an aggregate 10 percent cut in the state’s personal income tax rates retroactive to Jan. 1. The measure, as presented, would return $254 million in unused taxpayer dollars to the citizens.

The special session will begin noon Monday, July 25. It coincides with July legislative interim meetings that begin Sunday, July 24, through Tuesday, July 26.

“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 started right away,” Justice said in a statement. “In the past year, gas prices have gotten out of control and inflation is through the roof. West Virginians need help right now.”

West Virginia has five personal income brackets ranging from 6.5 percent for those earning $60,000 or more per year, down to 3 percent for those earning $10,000 or less. According to Dave Hardy, cabinet secretary for the Department of Revenue, the new proposed rates are meant to provide much needed tax relief up and down all tax brackets.

“The first goal is to try to share with West Virginia the benefits of this record-breaking fiscal year that we just finished,” Hardy said by phone Wednesday afternoon. “The bill that’s going to be introduced on Monday at the special session, not only does it offer immediate relief, it offers tax relief all the way back to Jan. 1 of this year, 2022. It gives you a larger refund next spring and a larger paycheck during the second half of 2022 as well.”

In Justice’s proposed plan, those earning $60,000 or more in personal income will see their rated decrease from 6.5 percent to 5.98 percent, with those earning between $40,000 and $60,000 seeing rates decrease from 6 percent to 5.5 percent, both representing a nearly half a percent decrease. Those earning $10,000 or less would see rates decrease from 3 percent to 2 percent, a full 1 percent decrease.

Those earning between $25,000 and $40,000 would see rates decrease from 4.5 percent to 4.2 percent. Those earning between $10,000 and $25,000 would see rates decrease from 4 percent to 3.7 percent. If the lawmakers approve, it will be the first change to personal income tax rates since 1987.

“The Governor cares about all West Virginians, from the lowest income earners, many times the lower income taxpayers are retirees on fixed income, all the way up to the upper level, which many times those business owners that provide employment and create jobs,” Hardy said.

“The Governor understands and really wanted us to be sure that we gave relief to people that are really feeling it,” Hardy continued. “We all know people are feeling it through the gas pump, through the grocery store, through every store, through everything they pay with their utilities. So, this gives a lot more relief to the lower income brackets.”

Justice believes his cut will be the first step to later phasing out the personal income tax, which accounts for nearly half of the state general revenue budget.

“Once we get the ball rolling, we can keep coming back and chipping away at our personal income tax until it’s completely eliminated,” Justice said. “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,” Justice continued. “It’s a cycle of goodness producing goodness. That’s what I want in West Virginia, and I hope that the Legislature will agree with me and pass this bill.”

Justice’s plan is nearly identical to House Bill 4007, introduced during the 2022 legislative session by House Finance Committee Chairman Eric Householder, R-Berkeley. The bill passed the House 76-20 along party lines but was never taken up by the Senate. That plan also cut personal income tax rates by 10 percent, though to percentage rate cuts were different than Justice’s proposed rate cuts.

In HB 4007, those earning more than $60,000 would have seen their tax rate decrease to 5.85 percent; those earning between $40,000 and $60,000 would have seen their rate reduce to 5.4 percent; those earning between $25,000 and $40,000 would have seen their rate drop to 4.05 percent; those earning between $10,000 and $25,000 would have seen their rate drop to 3.6 percent; and those earning less than $10,000 would have seen their rates reduced to 2.7 percent.

While it is likely that Republicans in the House will be supportive of Justice’s proposed bill since it closely resembles HB 4007, it’s less clear if Republicans in the Senate will go along. HB 4007 was never taken up by the Senate, and Senate President Craig Blair, R-Berkeley, has stated in recent interviews he would prefer to focus amendment 2, a constitutional amendment on the November ballot that would allow lawmakers to change or eliminate certain personal property tax rates.

Sources said that Republican lawmakers planned to caucus Wednesday evening to discuss Justice’s personal income tax proposal. A request for comment for Senate President Craig Blair, R-Berkeley, and House Speaker Roger Hanshaw, R-Clay, was not returned.

Democratic state lawmakers have been calling for some form of tax relief since the beginning of the 2022 legislative session in January when they proposed cutting the consumer sales and use tax. After the session ended in March, Democratic members of the House and Senate proposed a 30-day freeze of West Virginia’s 35.7 cent gasoline tax.

In a joint statement released Wednesday afternoon, Senate Minority Leader Stephen Baldwin, D-Greenbrier, and House Minority Leader Doug Skaff, D-Kanawha, said they were happy that Justice finally called a special session for tax reform, though they expressed disappointment that he limited the special session to debating only a personal income tax cut.

“West Virginians need help now,” Baldwin said. “As inflation has grown this year, Democrats have proposed ideas to provide the people with relief now — gas tax relief, sales tax relief, tax credits for families, workforce investments, and even a tax rebate,” he said. “Those suggestions have largely been dismissed or ignored by the Governor and the Majority Party.”

“The limited special session call also precludes us from discussing other avenues for meaningful tax relief for West Virginians,” Skaff said. “His lack of communication aside, we look forward to reviewing this plan to see how we can provide much-needed relief to the citizens of our state.”