CHARLESTON, West Virginia – Negotiations are underway in the West Virginia Legislature to finalize the budget before the end of the session on Saturday. The state Senate has introduced amendments to House Bill 4883, which focuses on increasing the annual salaries of certain state employees, including teachers, school service personnel, and West Virginia State Police troopers and employees.
Originally, Governor Jim Justice proposed a 5% pay raise for these employees, costing over $80 million. However, the Senate Finance Committee modified the bill to reduce the raise to 4% and tie it to triggers in the state income tax related to last year’s personal income tax cut.
During the 2023 session, the Legislature passed HB 2526, which reduced personal income tax rates by 21.25% across all six personal income tax brackets. This tax cut provided approximately $590 million in savings for taxpayers. The amended HB 4883 now links the 4% raise for state employees to the absence of triggers for further income tax cuts in 2025.
Similarly, the Senate Finance Committee made changes to HB 4880, which addresses the personal income tax Social Security exemption. The House version of the bill aimed to phase out income tax collections on Social Security benefits for certain earners. However, the Senate amendment tied these reductions to the same income tax triggers, potentially affecting the tax relief on Social Security benefits.
Governor Justice has been vocal about his support for both the pay raise proposal and the Social Security income tax cut. He urged the Senate to reconsider restoring the bills to their original forms, emphasizing the importance of providing these benefits to the state’s employees and residents.
Senate Bill 200, which includes the budget bill setting the general revenue budget for fiscal year 2025, is crucial for the state’s financial planning. As the Legislature works towards finalizing the budget by Saturday, state officials are anticipating a ‘skinny budget’ due to uncertainties surrounding federal funding for education in response to the COVID-19 pandemic.
The outcome of these legislative decisions will have significant implications for state employees, retirees, and taxpayers in West Virginia. As the deadline approaches, the pressure is on to reach a consensus that balances budget considerations with the needs of the state.