On October 8, 2024, the West Virginia House of Delegates approved Governor Jim Justice’s proposal for a 2% cut to the state’s personal income tax, despite concerns about using funds from the state’s three health agencies to finance the reduction. The bill now heads to the governor’s desk for final approval.
This tax cut will be in addition to a previously approved 4% income tax cut scheduled to take effect in January 2025 due to the state meeting an economic trigger. With the new 2% cut also starting in January, it is estimated to save the average West Virginia family around $200 per year.
“Even a little bit is meaningful. A gallon of milk helps families,” said Delegate Larry Kump, R-Berkeley, in support of the measure. “Anything we do to reduce the tax burden on our families is a good thing.”
Funding Concerns Spark Debate
The tax cut is expected to cost $46 million, with more than half of that—around $27 million—coming from funds available in the budgets of the Departments of Human Services (DoHS), Health, and Health Facilities. These departments were created last year following the split of the state’s former Department of Health and Human Resources (DHHR). According to House Finance Chairman Vernon Criss, R-Wood, the split resulted in significant cost savings, allowing the state to fund part of the tax cut.
“There are more cost savings there than we had intended to see when we did that. That’s a good thing,” Criss explained.
However, House Democrats voiced concerns over how the Justice administration managed to “find” $27 million in health department budgets. Lawmakers were reminded that Human Services leaders had informed them earlier this year that $23 million was needed to support the state’s child care subsidy program. The program is currently being funded through Temporary Assistance for Needy Families (TANF) funds.
During the debate, Democrats pointed out that nearly 6,000 children remain in foster care, with some living in hotels, and raised concerns over grandparents struggling to care for grandchildren. They argued that cutting funds from the Department of Human Services could harm vulnerable children and families.
Failed Amendment to Address Foster Care Crisis
House Minority Leader Sean Hornbuckle, D-Cabell, cautioned lawmakers against making political decisions ahead of the upcoming election in November. He questioned the timing of the tax cut proposal, given that Governor Justice is running for the U.S. Senate, and all House members are up for reelection.
“I implore you to step away from politics and let’s talk about policy,” Hornbuckle said. “This tax cut is not very meaningful … it’s taking money away from children.”
Delegate Mike Pushkin, D-Kanawha, introduced an amendment to delay the 2% tax cut until every foster child in the state was placed in a permanent home within 30 days of the state gaining custody. The amendment also called for the removal of all foster children from hotel rooms and other temporary living arrangements within the same timeframe. The amendment failed.
“When we’re talking about taking money from the Department of Human Services, you’re reducing the funds it takes to find placement for these kids,” Pushkin argued.
Final Approval and Funding Adjustments
The state Senate had already approved the tax cut on Monday, noting that $19 million of the total $46 million cost would be covered by a revenue bond that is nearly paid off. Governor Justice originally proposed a 5% tax cut, but after concerns about budget constraints, he reduced the request to 2%.
The bill now awaits Governor Justice’s signature. If signed into law, both the 4% and the new 2% personal income tax cuts will take effect in January 2025, bringing tax relief to West Virginia families while continuing to spark debate over the state’s budget priorities.
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