CHARLESTON, W.Va. — A bill to create the West Virginia Jumpstart Savings Act, a plan to allow individuals who wish to pursue a vocation or trade to make tax-free contributions to a savings and investment account, passed the House of Delegates unanimously on Tuesday.
The plan has been the centerpiece on the agenda of state Treasurer Riley Moore, who was sworn into the office last month. Delegates voted 96-0 to pass House Bill 2001, Relating Generally to Creating the West Virginia Jumpstart Savings Program.
It now moves to the state Senate for further consideration.
“This is a tremendous bipartisan show of support for our Jumpstart Savings Plan, which I firmly believe will help us build up our labor force here in West Virginia,” Moore said in a release.
“This savings plan will benefit countless future workers in our state by empowering them and removing a final barrier to entry to the workforce. I look forward to working with our Senate colleagues to get this bill to the Governor’s desk.”
Moore’s office said the plan allows for family members and the individual’s employer can also make contributions to the account. The plan beneficiary can later withdraw money from the account – which will also be tax-free – to help cover business startup costs, equipment, tools, certifications and licenses needed in the vocation or trade.
The plan is similar to the SMART529 plan, which is a tax-advantaged savings plan designed to encourage families to save for college. Moore’s office said that type of plan does not help West Virginians as they start out in the workforce. The Jumpstart Savings Plan will give taxpayers a new, separate alternative to allow them to save and prepare for entering the workforce, Moore said.
Joe Ellington, R- Mercer, 27, House Education Chairman spoke to the bill on Tuesday on the floor. He said a taxpayer may roll over distributions from a previous 529 plan account into the Jumpstart account without paying any state income tax on the distribution. He also said a citizens may roll over the Jumpstart account into a WVAble account without paying state income tax on the distribution.
Through compromise in the House Education Committee room, an amendment was made to the bill to lower the initial contribution to the plan from $50 to $25, an effort led by Cabell County Democratic Delegate Sean Hornbuckle.
Hornbuckle urged passage but with caution and said there are still some questions on whether it will help the most vulnerable families in the state. He said it could impact the budget and the House may have to look other places for increasing revenue.
“In theory, the program we are about to develop could be a really good thing for our constituents. It’s labeled a jumpstart, which it will do. However, I question if we are helping our most vulnerable mountaineers,” he said.
If passed by the state Senate and signed into law, the program must be operable by July 2022.
Ellington said there will be a JumpStart Savings board created with a passage. The board will consist of seven members chaired by Moore, state Superintendent of Schools Clayton Burch, th chancellor of West Virginia technical and community college system, and four members appointed by Gov. Jim Justice to five-year terms.
Of the four members, one will be from organized labor that represents tradespeople, one would represent businesses and entities that offer apprenticeships, and two are private citizens that are not employed or an officer of any state or political subdivision in West Virginia.
The plan was endorsed by several state business leaders this week.
“This important legislation will prepare the next generation to enter the workforce and equip them with the funding to obtain necessary certifications, training and tools,” Mike Clowser, chairman of the West Virginia Business & Industry Council, said Monday.
“We commend State Treasurer Riley Moore for having the foresight to develop this program and we encourage the House of Delegates to pass the bill when it comes to the floor this week.”
Bryan Hoylman, President of the West Virginia Associated Builders and Contractors said, “We applaud Treasurer Riley Moore for his proposal of the Jumpstart Savings Act that will benefit so many families here in West Virginia. This plan will benefit many employers in our industry and is a gigantic leap forward in equipping the next generation of workers here in our state.”
Rebecca McPhail, President of the West Virginia Manufacturer’s Association said Monday, “Manufacturers know firsthand the challenges in finding skilled labor in West Virginia. Any efforts to prepare the next generation to enter the workforce contribute to a stronger West Virginia.
“We applaud State Treasurer Riley Moore for developing and promoting this concept and encourage the House of Delegates to pass the bill when it comes to the floor this week.”