Brad McElhinny WVMetroNews
West Virginia has already embarked on what the current governor calls the largest tax cut in state history, and candidates to next take on the chief executive’s role differ in how aggressively they might build on that.
Chris Miller, a businessman from Huntington, says he would “eliminate the income tax day one.”
Mac Warner, a Morgantown resident who has served two terms as Secretary of State, offers more caution and says in reality, “we don’t have a surplus.”
Moore Capito, the House Judiciary chairman from Charleston, says he participated in the legislative process that resulted in the big income tax cut and noted that it already has triggers that could produce steeper cuts in coming years.
Each participated in a West Virginia MetroNews debate for Republican candidates for governor in Morgantown. Over the course of an hour, veteran broadcaster Hoppy Kercheval drew out the candidates on a range of issues.
Their views of West Virginia tax cuts were a glimpse of differences that voters in the May primary might use to differentiate among them. So far, several polls have shown more than 20 percent of likely primary voters remain undecided about what candidate for governor they favor.
Each of the candidates has called himself a conservative but expressed in different ways. Miller emphasizes his business experience running his family’s network that includes several car dealerships. Capito touts his legislative experience in describing himself as a “get it done conservative.” Warner says he will defend West Virginia values and frames responses around his service as a military veteran.
Whoever becomes governor after incumbent Jim Justice has finished his two terms will enter a financial situation that deserves close watch.
Early this year, the Legislature passed and Justice signed an initial 21.25 percent income tax cut that could grow in future years.
State officials have estimated the overall financial impact of the tax bill is $695 million this fiscal year and $817.8 million upon full implementation.
The income tax cut could increase in a few years because of a formula serving as a trigger. It would measure general revenue collections in a fiscal year minus severance collections compared to 2019 as a base year. If collections are ahead of the base year, that would activate the trigger.
Miller said he would go farther and faster.
“Get rid of it day one,” he said during the debate.
Pressed for how, as chief executive, his administration would continue to support services, Miller expressed confidence about growth.
“The economic growth that comes along with it is literally what drives an economy,” Miller said.
At other times in the debate, Miller provided more context to his philosophy saying “our state is facing serious financial catastrophes. We’re in a good spot right now where good things are happening. But if we don’t grow our population and grow our economy, we have a bond rating fiasco coming.”
Personal income tax brought in $2.5 billion for state government in 2022, making it the state’s biggest single revenue source. That accounts for about half of the general revenue budget.
This year, personal income tax is estimated to bring in just over $2 billion, which is a little more than 40 percent of the general revenue fund.
Warner said he’s a conservative who likes to be careful with public dollars, but he doubted the state could meet its responsibilities by cutting that tax so sharply.
“I think the Legislature took a very adult approach to this and that’s give the 21 percent and then if they meet certain standards hit the next 10 percent and the next 10 percent,” Warner said.
“My question is, and we talk about these surpluses that West Virginia is now enjoying. Those surpluses aren’t going to be there for long. The federal government money coming in after covid and that sort of thing is going to dry up. I’m afraid of what the current governor is leaving the next governor. So I want to be cautious about cutting taxes too fast. That’s why I like the Legislature getting in there as a regulator.”
Specifically, Warner continued, “We have problems with teacher retention. We have problems with corrections retention. Medical examiner. First responders. Volunteer fire departments. We don’t have a surplus. We should be spending that money and making sure those people are brought up to speed, we can keep them here and we can recruit new people into the state.”
Capito said he worked on the legislation that resulted in the tax cut already in effect.
“As the get-it-done conservative in this race, I’m the only one who has actually cut taxes for hard working West Virginians and given them their money back. It was the greatest vote that I’ve ever been able to take,” Capito said.
“One of the number one things that businesses look at, whether they’re already here or whether they’re seeking to come here is predictability. We’ve put in place a predictable tax reduction plan that can be accelerated if the economy continues to grow the way it does.”
One of the most prominent Republican candidates for governor, three-term Attorney General Patrick Morrisey, did not participate in the debate. He had counter-proposed scheduling a debate later in the cycle, following the official campaign declaration period. On Thursday afternoon, Morrisey announced that, instead, he would participate in a streaming interview, solo, with a different news outlet.
The candidates in the debate called him out for it.
In a press release and in an early debate comment, Miller said “now that West Virginians want to hear him answer the tough questions, he’s hiding in his basement like Joe Biden. That’s what career politicians do. The governor is CEO of the state and employed by the taxpayers. That’s who we work for and answer to.”