West Virginia Republicans move forward on tax overhaul

CHARLESTON, W.Va. (AP) — West Virginia Republicans moved forward Monday on a sweeping tax overhaul that could slash county government budgets, though it appears likely Democrats may derail the plan.

Senators voted 17-16 to pass a GOP proposal to cut taxes on manufacturers and personal vehicles while raising sales taxes and taxes on tobacco products. But still looming is an accompanying resolution, which requires a two-thirds majority vote, to set the plan in motion.

“This is a bad plan; it’s going to hurt West Virginians,” said Sen. Mike Romano, a Democrat from Harrison County.

Many county leaders oppose the tax overhaul and worry it could result in the loss of millions of dollars in tax revenues that play an integral part of their budgets. Jonathan Adler, executive director of the West Virginia Association of Counties, said the plan raised the potential for devastating cuts to local law enforcement and courts.

“We just don’t know what all the fallout is going to be, but we’re very, very worried,” he said in an interview before the vote was cast.

Republicans have long wanted to eliminate the tax on manufacturing equipment, calling it a major job killer. Senate President Mitch Carmichael, a Republican, has said the tax cut was a top-priority measure this session.

Monday’s vote came after about two-and-a-half hours of debate, with lead sponsor Republican Sen. Craig Blair admitting that the resolution doesn’t appear have enough votes to clear the two-thirds threshold.

The GOP proposal is broken into two pieces of legislation.

One piece is a resolution to amend the state Constitution to allow property tax rates to be changed. The other part is a bill to phase out a tax on manufacturing equipment and cut a tax on personal vehicles. To make up for part of the loss, Republicans want to raise sales taxes a half percent and increase taxes on tobacco.

“Growth is undeniable under this plan” said Sen. Eric Tarr, a Republican from Putnam County.

Democrats were quick to point out that there would still be a roughly $100 million hole even after the tax increases on sales and tobacco, and that the state is already projecting big budget gaps in the next several years.

“We have to get away from believing that big business tax cuts are the way to prosperity,” said Sen. Richard Lindsay, a Kanawha County Democrat.

The resolution is set for a vote in the Senate on Tuesday.

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