CHARLESTON, W.Va. (WVDN)- Members of the West Virginia House of Delegates met for another Saturday session and in one day, secured the long-term stability and viability of the Public Employees Insurance Agency, passed a balanced budget, approved pay raises for state employees and finalized the largest tax cut in 37 years.
Senate Bill 268, which would stabilize PEIA through a variety of adjustments, passed the House after nearly three hours of discussion by 20 delegates. It returns to the Senate, because it was amended by the House.
“This Legislature has proven over and over that we can make the hard choices to solve the tough problems this state has faced for decades,” said House Deputy Speaker Matt Rohrbach, R-Cabell. “We know these changes to PEIA are not easy, but they are necessary to stabilize the system and keep it viable for the 230,000 West Virginians who rely on it.”
SB268 would require a minimum 110% reimbursement of the Medicare rate for all providers. It would maintain the funding breakdown of 80% for the employer and 20% for the employee. The bill would increase participants’ premium rates, which have remained relatively unchanged for the past 11 years, by roughly 25%. No coverage would change, including for out-of-state services, and no retirees would be affected. Participants’ spouses who have insurance available through their own employers would be required to utilize it or may keep their PEIA coverage by paying the actuarial rate.
The program had a projected $154 million deficit for fiscal year 2024. Under this measure, savings would be achieved through premium offsets, private insurance spousal policies as well as federal and special revenue dollars made available by rerouting state funding. It would require all PEIA Finance Board members to carry the fiduciary responsibility to protect the plan and would require PEIA to conduct an independent actuarial study of the financial solvency of the plan.
Members next approved House Bill 2024, the budget bill. The bill cut the governor’s proposed budget by about $250 million to account for other priorities the House has approved through other bills so far this session.
The House budget adds $800,000 for after-school programs, $77 million in support for families as directed through House Bill 2002 and $842 million to develop the foster care portal as set forth in House Bill 2538.
Additional funds were added in the House budget for the Community and Technical College System and the Learn and Earn program established through House Bill 3417, the newly created Woody Williams State Military Funeral Honor Guard fund and the uniform allowance for members of the National Guard.
The House unanimously approved an amended Senate Bill 423, which would increase the annual salaries of members of the West Virginia State Police and public-school teachers by $2,300 as well as $230 or $115 raises for public school service personnel, based on the hours established in their contracts. The pay raises would become effective July 1.
Members of the House approved House Bill 2526, agreeing with the Senate’s proposals to reduce the personal income tax. HB2526 represents a $754 million cut in taxes — the largest in the state’s history.
“I’m glad we were finally able to come to an agreement to provide tax relief,” said House Majority Leader Eric Householder, R-Berkeley. “This tax cut is historic, but more importantly, it puts us on a path toward the total elimination of the personal income tax, which is where we want to be.”
Personal income tax rates would be cut by 21.25% across all six tax brackets, retroactive to Jan. 1, 2023. Personal income tax reductions would be limited to no more than 10% at any given time, but a formula would activate additional tax cuts when surplus allows.
Taxpayers would receive a 100% tax credit on their vehicles when they pay personal property taxes and small businesses would be able to claim a 50% refundable tax credit against personal income taxes or the taxes paid on machinery, equipment and inventory. Disabled military service veterans would receive a refundable tax credit against their personal income taxes for real property taxes paid on their homes. HB2526 now goes to the governor for action.
“We are able to make economic development investments now because we’re in an environment in which we have the budget surpluses to be able to make it happen,” said House Speaker Roger Hanshaw, R-Clay. “Someday that will no longer be the case; some day we will be in an environment in which we will no longer be able to go out and recruit companies to come to West Virginia and do one-time expenditures for that.
“Our insurance obligations are not one-time expenditures; our insurance obligations are ongoing benefits to the working West Virginians who are our public employees; and we have those obligations whether we have budget surpluses or not. What’s important is to have a structurally sound benefit to all of our state workers that we can sustain no matter what the economic environment that we’re in.”
A total of 81 bills have completed legislative action as of March 4, and 54 of those have been House bills. The 60-day, regular legislative session ends at 12 a.m. on March 11.
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