CHARLESTON, W.Va. – In a Friday speech to the West Virginia House of Delegates, Delegate Larry Rowe, D-Kanawha, suggested another solution for the state’s budget problems: eliminating previous tax reductions.
Rowe said the only two issues he has heard from constituents regarding the budget is whether or not spending will be cut or taxes will increase. He said reductions to the food tax and corporate net income tax helped create the nearly $500 million budget deficit for the 2017-2018 fiscal year.
Rowe also said during his address the legislature has only raised taxes twice since 1988, both on cigarettes.
“What has happened since 1988 is we have made substantial reductions in income,” he said.
The food tax was phased out between 2005 and 2013, and the corporate net income tax has decreased from 8.5 percent in 2011 to 6.5 percent in 2015. The state business franchise tax was eliminated in 2015.
Much of the state’s spending is connected to health care, according to Rowe, and that discretionary spending has been shrinking.
“There are only two counties that have less than 20 percent on Medicaid, and there are four counties that are in the 40-percent range,” he said. “Kanawha is 28 [percent].”
Rowe said certain sections of the government need to grow. He noted findings from the state Department of Commerce, indicating businesses look at workforce skills, infrastructure and quality of life before deciding to do business in a state.
Quality of life includes health care and tourism.
The state Senate Select Committee on Tax Reform passed its bill on tax reform March 13. The legislation would establish an 8-percent consumer sales tax and a flat 2.5-percent personal income tax.