CHARLESTON, W.Va. (AP) — West Virginia residents’ income taxes will drop 4% in the new year, Gov. Jim Justice said.
The Republican governor announced Thursday that state revenues had reached the threshold for the cut, which is set to take effect Jan. 1. The decision was confirmed by Treasurer Larry Pack and State Auditor JB McCuskey.
The cut comes after Justice signed an income tax cut of 21.25% last year. Under the 2023 law, additional state income tax cuts can be triggered by a formula that takes into account higher than expected annual tax revenues. These additional tax cuts cannot be higher than 10%.
Justice has stressed that he wants to see income tax was abolished to encourage economic growth in one of the poorest states in the country, and he has repeatedly tried to persuade state lawmakers to cut the tax entirely. The 2023 bill, which takes a more moderate approach, was a compromise between the executive branch and the state legislature.
“While it won’t happen during my tenure as governor, our state is on track to eliminate its income tax – so let’s keep the ball rolling in the same direction,” Justice said in a statement Thursday. “We all know that eliminating the income tax will ultimately bring more good and more people to our beautiful state.”
Justice said last month he expects the income tax to be cut by about 4% starting next year, but he wants to call lawmakers back to the Capitol for a special session to consider another 5% cut. The governor has not yet called a special session or set tentative dates for lawmakers to return to the Capitol, so it’s unclear if that will happen.
The West Virginia Center On Budget and Policy urges caution when it comes to further tax cuts. Income tax is the state’s largest source of revenue, and years of stagnant budget spending have resulted in needs in the areas of education and child care not being met.
