CHARLESTON, W.Va. -- West Virginia would gradually erase its tax on food and hand its public employees a permanent raise if lawmakers can find a way to enhance a pair of proposals from acting Gov. Earl Ray Tomblin.
Tomblin's agenda this session includes bills that would pay employees a one-time sum and reduce the sales tax on groceries from 3 cents per dollar spent to 2 cents. The measures are among 26 items proposed by Tomblin, and most had seen some traction as the session enters its final half.
But the House Finance Committee is crunching the numbers in the hope to take the tax and pay measures further, Chairman Harry Keith White said Friday.
The state would need to have enough annual revenue for a permanent pay raise. Leftover surplus provides the $47.5 million needed for the one-time pay boost proposed by Tomblin. Teachers would receive a payment of $800. Other school workers would get $500, while state workers would receive at least that much through a boost equal to 2 percent of their pay.
Tomblin's tax cut, meanwhile, would reduce general revenues by around $26 million annually. Ending it entirely would save taxpayers around $75 million a year, administration officials estimate. Tomblin has questioned the wisdom of such a cut at time when the state's budget picture, while stable, continues to brace for future budget deficits.
The latest six-year forecast projects a $122.9 million gap between revenues and spending for the 2012-13 budget year. Its projected shortfalls grow to $226.9 million by the 2015-16 budget year. Increasing spending further through pay raises while reducing general revenues would require budget officials to recalculate that forecast.
But White, D-Mingo, believes the state could afford gradually ending the food tax. Within the past five years, it has gradually reduced the rate from 6 percent. The state could also refuse future cuts unless certain financial conditions are met, White said.
The state has scheduled cuts to its corporate net income tax rate, for instance, that depend on the size of its emergency reserves. White said he's looking at surplus levels as the possible trigger, to ensure the state can afford the cuts.