West Virginia Legislature Passes $4.996 Billion Budget with Pay Raises and Social Security Tax Phase-Out
After days of negotiations and debates, the West Virginia Legislature has finally passed a $4.996 billion budget that includes pay raises for state workers and the phase-out of state taxes on Social Security. The budget bill, described as a compromise between the Senate and the House of Delegates, was met with mixed reactions from lawmakers.
The budget bill had faced delays as Senators pushed the House to pass an unemployment benefits bill. Once the bill was passed, Senators agreed to support bills that would provide pay raises for state workers and gradually eliminate taxes on Social Security benefits. Senate Finance Chairman Eric Tarr, a Republican from Putnam, highlighted the major changes that were made during negotiations with the House.
The budget bill reflects an average 5% pay raise for state workers through general revenue funds. Governor Jim Justice had initially introduced a $5.22 billion general revenue budget, and there is still talk of a special session in May to address any unresolved budget items.
While some lawmakers were satisfied with the budget compromise, others expressed their concerns. Delegate John Williams, a Democrat from Monongalia, objected to the last-minute introduction of such a weighty topic during the final hours of the legislative session. He emphasized the need for a more transparent and organized budget process to prevent late surprises.
Despite these concerns, the Senate passed bills related to pay raises for state employees and the phasing out of taxes on Social Security benefits. These bills are crucial components of the state’s general revenue budget. Initially, the Senate had tied each bill to economic triggers, but this format was abandoned on the 60th day of the legislative session.
The proposed pay raises for state employees and the elimination of state taxes on Social Security benefits were among the key proposals put forth by Governor Jim Justice in his State of the State address. The House of Delegates had already voted in favor of these bills, so they now await the governor’s signature.
One of the bills, House Bill 4883, focuses on providing pay increases for state workers whose pay scales are defined in state code. This means that State Police personnel and public school educators will be affected. State Police personnel can expect a $2,900 annual salary increase, while teachers will receive a $2,460 annual pay increase. Additionally, school service personnel will receive an extra $140 per month. Other state employees will also see raises reflected in the general revenue budget.
The Senate unanimously passed the bill to phase out taxes on Social Security benefits with a 32-0 vote. The estimated financial impact of fully eliminating income taxes on Social Security benefits is projected to be slightly over $37 million. Under the legislation, the phase-out will occur in three stages: a 35% cut retroactive to January 1, 2024; 65% in 2025, and finally, 100% in 2026.
This legislation builds upon a bill signed into law by Governor Jim Justice in 2019. The previous law exempted Social Security income from personal income taxes for most West Virginians, particularly those in lower tax brackets. The phase-out of state taxes on Social Security benefits reflects the belief that this money was earned by each worker and that it is time to eliminate this burden.
With the passage of these bills, West Virginia is set to provide much-needed support to its state workers and retirees. The pay raises and the phase-out of taxes on Social Security benefits will undoubtedly have a positive impact on the lives of many individuals and families across the state. As the governor’s signature awaits these bills, West Virginians can look forward to a brighter financial future.
