Gee's Tax Take in the Spotlight

E. Gordon Gee, president of West Virginia University, walked a narrow line Tuesday amid a discussion about eliminating the state’s personal income tax, indicating such a move could be successful in the long term but would need to be paired with a broader look at taxes or other offsetting moves.

A university spokesperson made clear that Gee needs more information about specific proposals before forming a final opinion. But the longtime university president's thoughts matter because state lawmakers are exploring the idea of ending individual income taxes, and some have already drawn a line between state tax policy and spending on college and university campuses in West Virginia. Cuts to the state's income taxes could very well leave less money available for state funding for the public university -- and other public institutions in West Virginia, where a substantial percentage of state spending goes to higher education.

“Gee acknowledges there is support among West Virginia legislators regarding this issue but that there are many factors to consider and that it is not something that can be implemented immediately or without careful thought and planning,” April Kaull, a spokesperson for the university, wrote in an email.

Asked specifically whether Gee supports a measure to eliminate the state income tax, Kaull said he has no opinion.

“He supports measures that would build a stronger West Virginia and stronger educational system. There has not been enough information on any particular proposal to have an opinion,” she wrote.

Last week, Paul Espinosa, a Republican who is majority whip in the West Virginia House of Delegates, sent an informal poll to Republican members that asked which tax increases and budget cuts they would be willing to make to support eliminating the state income tax. Governor Jim Justice, also a Republican, has pushed to scrap the income tax, arguing that such a move would make West Virginia a more appealing place for businesses and individuals. West Virginia currently has a progressive income tax system that charges taxpayers between 3 percent and 6.5 percent, depending on their income level.

In the poll, Espinosa included several potential cuts that could put state higher education funding on the chopping block. They include reductions to overall higher education funding, elimination of all state funding to West Virginia University and Marshall University, and ending or reducing the state’s PROMISE scholarship program, which is a non-need-based program awarding up to $4,750 per year toward tuition and fees at in-state public and private institutions. It’s unclear how popular those measures were among members.

Several years before he took up the helm at West Virginia University -- his second stint as the university's president -- Gee served as president at Vanderbilt University in Nashville, Tenn., for seven years. Tennessee does not charge income tax. Having lived in Tennessee, Gee saw benefits of the state’s no-income-tax policy to economic growth and development, Kaull wrote.

“He agrees that long term, it could be successful; but not without substituting other potential taxes or other sources of revenue and looking at the overall tax structure,” Kaull wrote about the possibility of eliminating income taxes in West Virginia. “The State needs to carefully analyze the investments it needs to make in education, healthcare, infrastructure and a host of other needs when considering any tax reduction. The University is prepared to assist legislators as needed as they review this topic.”

Most public universities, including West Virginia University, rely heavily on state tax dollars to complete their operating budgets. In fiscal year 2020, the university received about $183.3 million from the state. In fiscal year 2019, state appropriations made up 16 percent of the university's revenues.

Several other universities in West Virginia draw larger shares of their revenue from the state. Bluefield State College, a historically Black college in Bluefield, W.Va., pulled about a quarter of its revenue from state appropriations in 2018. At Marshall, located in Huntington, W.Va., state appropriations made up 21 percent of the university's operating budget in 2018. Gee has butted heads with presidents of smaller public institutions in the state in the past, notably in 2018 when a fellow university president accused West Virginia University of being involved in a "hostile takeover" of higher education governance in the state -- which West Virginia University denied.

Higher education is the third-largest general fund budget category in West Virginia, and most public support for state higher education -- 92.3 percent -- is paid for by state taxes, according to the State Higher Education Executive Officers Association’s latest state higher education finance report. The remaining 7.7 percent is funded by nontax revenues. West Virginia does not fund higher education through local taxes.

The state contributes nearly 53 percent of its higher education dollars to general operations at public institutions, according to the report.

Since 2012, West Virginia University has suffered reductions to its state appropriations, Kaull said. Student share -- the proportion of total education revenues at public institutions coming from net tuition revenue -- has also been rising in the state for years, according to the SHEEO report. In 2019, tuition revenue accounted for 63 percent of higher education revenues in West Virginia, compared to only 19 percent in 1980.

The possibility that West Virginia University's leaders would go along with the elimination of the state income tax upset some on social media. Scott Crichlow, an associate professor of political science at WVU, said on Twitter that Gee addressed potential elimination of the state income tax during a Faculty Senate meeting Monday.

“Yesterday WVU Pres. Gordon Gee told the Faculty Senate he supports moving toward abolishing the state income tax,” Crichlow wrote. “Likely results of such a move include slashing support for education, ending PROMISE, and moving more of the tax burden to people struggling to pay for college.”