CHARLESTON, W.Va. (AP) — UPDATE (5 p.m.):
West Virginia Senate Democrats on Tuesday blocked a sweeping Republican tax overhaul that was expected to slash county budgets.
Democrats voted to reject the plan, which required a two-thirds majority to change the state Constitution and would have cut taxes on manufacturers and personal vehicles while raising sales taxes and taxes on tobacco products.
“We do not have a good track record in providing for our people with the promise of tax cuts for big businesses," said Sen. Richard Lindsay, a Kanawha County Democrat. "Our focus should be on the people, on investing in West Virginians.”
County commissioners have opposed the tax overhaul and said it could cause them to lose millions of dollars of tax revenues, raising fears about cuts to local law enforcement and courts. Jonathan Adler, executive director of the West Virginia Association of Counties, has said it was “too big and too fast a change.”
The GOP proposal was broken up into two pieces of legislation. One part is a bill that contains details about the tax overhaul. The other is a resolution to amend the state Constitution to allow property tax rates to be changed, sending the plan into motion.
Lawmakers on Monday voted along party lines to pass the bill, which would have phased out a tax on manufacturing equipment and cut a tax on personal vehicles, while raising sales tax and increasing taxes on tobacco to make up for any losses.
The chamber then took up the resolution Tuesday. Republicans argued that voters should be able to decide their tax rates. Democrats said the plan would have left a $100 million hole even after the tax increases and that the state is already projecting big budget gaps over the next several years. It eventually failed on a 18-16 vote, falling short of the two-thirds majority required for changes to the state Constitution.
“This is a bill to help families of West Virginia, make no mistake about it. It's also a bill to bring jobs to West Virginia,” said Sen. Eric Tarr, a Putnam County Republican.
Sen. Craig Blair, the lead sponsor of the proposal, acknowledged during hourslong debates on both Monday and Tuesday that his plan likely wouldn't clear the two-thirds majority vote threshold.
“Well, well, I can see where this is going,” said Blair before the vote was cast Tuesday.
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.
“Frankly, it's a height of arrogance to deny the people of West Virginia an opportunity to decide how to tax themselves,” Carmichael said.
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.