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There are many concerning provisions to the recently passed state law (HB 2014) dealing with Data Center and Microgrid projects, but a recent article in The Inter-Mountain detailing how tax revenue from these projects would be used to benefit the citizens of West Virginia was particularly concerning.
The law allocates 50% of such revenues to reduce or eliminate the state income tax. While the idea is appealing, it will benefit the wealthiest West Virginians disproportionately, while providing little or no tax relief for less wealthy citizens, whose tax burden is largely through payroll and sales taxes.
West Virginia has lowered its personal income tax rates three times in the last four years, and the method of revenue distribution provided by this law will further lower those rates or perhaps even eliminate the state income tax altogether.
Year after year West Virginia consistently ranks near the bottom nationwide in both healthcare and education and yet we have ended four of the last six years with state budget surpluses of between $338 million and $1.8 billion.
One way to view this is that our government in Charleston is producing surpluses by underfunding healthcare, education, and social services and then using those surpluses to reduce the tax burden of our wealthier citizens. The revenue distribution provisions of HB 2014 simply reinforce that trend.
If our Governor and State Legislators really wanted to provide tax relief to the average West Virginian, they would reduce or eliminate the state sales tax rather than the state income tax. Alternatively, they might use our budget surpluses to better fund education, healthcare, and the much-needed social services.