Going out on a limb again
It will come as no surprise to you, fellow West Virginians, that once again this year we are not going out on a limb.
Last week I suggested that if we don’t get out of our comfort zone and take some risks to develop our economy, we’re doomed to continuing stagnation. Specifically, I suggested we need to try a proposal by Republican legislators to reduce certain business taxes in order to attract job creators.
For the tax cut to take effect, voters would have to approve an amendment to the state constitution. Putting it to a vote requires a resolution in which two-thirds of senators must concur. When that came up for a vote this week, the tally was 18-16 — far short of the requirement.
I can understand why some senators were cynical. The tax break in question would pull revenue out from under local governments, including school districts. They’d lose around $100 million a year.
Throw in the sweetener lawmakers included — eliminating vehicle property taxes — and the total loss to localities and the state goes up to $300 million a year.
Proponents of the plan hoped to add a half-cent per dollar to the sales tax to make up for some lost revenue. In addition, they pledged to cut state spending by $100 million a year.
Not enough lawmakers believed it would work.
But from the standpoints of taxes and regulations, West Virginia must do more. Otherwise, there’s no hope of overcoming stereotypes too many of our fellow Americans believe about us. Who’d want to open a new business here?
Here’s an idea: It’s not difficult to accept that increasing the sales tax will raise a lot of money. Matter of fact, boosting it from 6% to 6.5% should result in an additional $115 million or so flowing into Charleston. That would take care of the whole business tax cut.
But making up for lost vehicle property taxes would require more. That’s where state government spending cuts come in.
It’s difficult to believe the $100 million a year pledged by tax cut supporters can happen. Government never seems to get cheaper.
Why not a show of good faith to demonstrate it can happen and that legislators have the will to make it happen?
Members of the state Senate Finance Committee, chaired by Sen. Craig Blair, R-Berkeley, may be headed in that direction.
The general revenue budget for this fiscal year is $4.693 billion, already trimmed a bit from the initial $4.710 billion because of declining revenue. Gov. Jim Justice’s proposal for fiscal 2021, beginning July 1, is $4.585 billion.
Blair’s committee is recommending even less, at $4.558 billion. That’s $27 million less than the governor wants.
What if legislators could somehow come up with a $4.485 billion budget — an even $100 million less than the governor’s plan?
That would demonstrate to both local government officials and voters that legislators, too, are willing to go out on a limb and save enough money to make the business tax relief bill no risk at all to localities.
Then, at this time next year, with their good faith demonstrated, lawmakers could try again on the business tax bill.
Crazy? Going way out on a limb? Maybe.
But folks, we simply must do something.
Mike Myer can be reached at: firstname.lastname@example.org.