Hanshaw refutes Justice's stand on Amendment 2 and vehicle tax refund plan

Oct. 15—West Virginia Speaker of the House Roger Hanshaw, R-Clay County, said passing Amendment 2 and having a path to end the vehicle property tax is a "simpler approach" and one that he supports.

Hanshaw visited Mercer County Wednesday and spoke with various groups, accompanied by all three Mercer County delegates — Marty Gearheart, Dr. Joe Ellington and Doug Smith.

During a stop at the Princeton Rescue Squad, Hanshaw said he opposes Gov. Jim Justice's plan to give vehicle owners in the state a refund for the local property tax they pay.

Justice, who is also at odds with the Senate GOP over the issue, has been touring the state in a series of community meetings to urge residents to vote no on Amendment 2, which would amend the state Constitution and give legislators the authority to change or end both the vehicle property tax and the machinery and inventory tax.

Justice has instead proposed the Car and All Vehicles Tax Elimination and Protection of Local Government Act, which would avoid changing the state Constitution by refunding the money residents spend each year on the vehicle tax.

Justice also opposes ending the machinery and equipment tax, opting instead to pass a 10 percent reduction in the personal income tax.

"We think a much simpler approach is to pass Amendment 2 and let us repeal the car tax," Hanshaw said. "We know the state tax department is already overworked. Refunds coming out to West Virginians are already behind schedule."

Hanshaw said the tax department is unable to process tax returns in a "timely manner" as it is.

"So why would we want to add to what seems like a fairly cumbersome process? It doesn't inherently seem like the right approach to me when we could conceivably just pass the amendment and eliminate the tax."

Hanshaw said he had not yet read Justice's bill since he had just received it, but "from my perspective, the simplest approach is to pass the amendment and eliminate the tax."

Hanshaw said everyone wants to eliminate as many taxes or as much of them "as we can and as quickly as we can."

"But what we don't want to do is adopt any plan that puts us on a path that is not sustainable."

That reasoning, he said, leads him to "stop short" of completely endorsing the Senate plan, which would commit $600 million a year to reimburse counties for the local revenue lost if those two taxes in the amendment were eliminated.

Hanshaw said he thinks Amendment 2 will pass and there are already many "competing plans" out there among legislators.

"After the amendment is adopted, we will get around to figuring out which one of them is the right plan," he said. "I think the takeaway message, what is common among most members, I believe, of both houses is that there is a desire to eliminate the vehicle tax and a desire to eliminate the equipment and inventory tax, but we've got to be sure we do that in a sustainable way."

Hanshaw said "no one" wants to take any action that would negatively impact city and county budgets.

Those taxes provide substantial revenue to localities, about $11 million to Mercer County, money that is used primarily for schools but also for services like emergency service providers, health departments and other services.

This is why any tax elimination must be done in a "methodical way," he said, with serious consideration and not done in a "knee-jerk reaction."

"We sure can't be adopting a plan that was drafted over the course of a couple of days," he said of Justice's plan, which has already been endorsed by the Democratic leadership in the House.

Hanshaw also said that any plan considered would have to go through the legislative process and can be changed and tweaked.

"We do find ourselves in an historic budget surplus (record $1.3 billion for fiscal year 2021-22 and about the same expected for this fiscal year), so what is the best way to relieve tax burdens?" he said. "I think most of us believe there is some balance to be had in eliminating different kinds of taxes and bringing down the aggregate tax burden across all classes of taxes a little bit at a time."

The balanced approach is what Tennessee has taken, he said, and that is "sort of our model with many of the policy objectives we want to pursue in our state."

That includes a "gradual step-down approach as opposed to an all-at-once elimination."

Another priority of the Senate's plan with eliminating the vehicle tax, he said, and one that he shares, is to minimize residents' required interactions with the Department of Motor Vehicles offices.

Citizens should be able to renew automobile license and vehicle registrations online, rather than visit a DMV office or mall something to that office, he said,

"But the impediment to that right now is the requirement that personal property taxes be paid," he said, because without that proof-of-payment requirement, a much more streamlined process can be made available online.

Hanshaw said that, as far as he knows, Justice's plan would still require residents to continue to show proof of paying the tax before those required DMV services would be provided.

Smith agreed that Justice's plan related to refunding residents the money they spend on the vehicle tax is "just going to create more bureaucracy in the government and more confusion."

"It's really not solving the problem," he said.

Ellington said he agreed that it will create more bureaucracy

"I would be more in favor of a direct repeal eliminating it..." he said. "We can't do anything if Amendment 2 doesn't get passed."

Justice has also based his arguments that Amendment 2 should be defeated because passing it would take away local control and give it to Charleston, leaving counties in a position of depending on legislators to reimburse the money every year, even if there is a negative bump in the state's economy.

Justice calls that plan "risky" and once again reiterated Friday during has pandemic briefing that counties could find themselves "begging for money" from legislators who would not have enough to give.

He also once claimed that residents are being "hoodwinked" because proponents of Amendment 2 are only interested in getting rid of the equipment and inventory tax and used the car tax as "bait."

However, the proposed Senate bill does include eliminating the car tax and reimbursing the counties for revenue lost, plus an additional $1 million to help pay to keep inmates from counties in regional jails.

Smith said Justice is going around the state creating a fear that localities would not be reimbursed for lost revenue if the taxes were cut back or eliminated.

"There is no politician in their right mind who is going to vote for something that totally disbands and doesn't support the counties being kept funded," he said, adding that it would be "political suicide."

Hanshaw the notion that citizens cannot trust their elected representatives is a "serious problem."

"If we've reached a point in America in which people no longer feel like they can trust their representatives, then we have a more fundamental problem in the country," he said.

Hanshaw said it is more fundamental than politics.

"We live in these communities," he said. "The frustrating part I hear some say when they talk about Amendment 2 is that 'we can't trust Charleston to make these decisions.' You know what, we are not in Charleston. Del. Smith doesn't live in Charleston. Del. Ellington doesn't live in Charleston and for that matter I don't live in Charleston. I work there, but I don't live there."

Hanshaw said they depend on government services as well, from water to fire departments to local police officers.

"These local services matter," he said. "They matter to all 134 of us, not just a handful of our colleagues who just happen to live in Charleston. So to say that we can't trust 'Charleston' to make these decisions is, frankly, ridiculous."

Hanshaw said "Charleston" doesn't make decisions — the 134 men and women who are from all 55 counties in West Virginia make those decisions.

"We have to go back home and live in these same communities after we've made those decisions," he said. "So to say that we are in some way going to jeopardize the services that we depend on is laughable."

On the personal income tax Justice proposes, Hanshaw said it's not that he is against eventually eliminating the tax, but there are many opinions about how much of an impact that has on potential businesses moving to the state compared to getting rid of the machinery and equipment tax.

"There is a lot of opinion about that, even here in Mercer County," he said, referring to his trip here Wednesday and going around the county meeting with business and industry representatives. "We heard business owners here in Mercer County say they thought the most impactful step the Legislature could take would be the elimination of the personal income tax. Conversely, we heard some of the manufacturing and industrial businesses in the county say that, no, no, we would expand more, we would hire more people, we would do more business if you eliminated the tax on equipment and inventory."

Hanshaw said it is a "balancing test."

Although the disagreements with Justice on these issues are obvious, Hanshaw took one thing Justice has said repeatedly very personally.

On Friday, Justice once again accused Republican leadership of being part of the "Charleston swamp," legislators who, he says, are told what to do by lobbyists.

"I find that insulting," Hanshaw said. "We don't live in Charleston. We assemble there because that is the seat of government when it's time to make decisions."

All legislators then return to their home counties and live there, he said, and face the people they represent.

"I still want the water to come out of my tap from those public service districts," he said of the needed services.

Hanshaw said he is in Charleston to take the concerns of the citizens there.

"This is how we prepare for the legislative session," he said of visiting and meeting people, learning of their concerns. "Lots of folks around the state believe the 134 members (34 in the Senate and 100 in the House) convene in January and when we are together we all decide what we are going to do and then for the next 60 days we do those things."

That is not the case at all, he said.

"We spend the summer and fall ... doing this, visiting communities and hearing what is on people's minds so we can get those proposals drafted up in the form of bills that are ready to be considered come January," he said.

Hanshaw said big issues during the legislative session that make headlines may not be the main concern a local business owner may have in Princeton.

"The way to find out what is on the minds and what is important to the people in Princeton is to come to Princeton and ask them," he said. "That is what we have done..."

During his travels around the state, he said some common themes have emerged and they include a need for more workforce training and development of skilled employees generally and in particular additional staffing and workers in electric vehicle maintenance.

"We are going to spend some time now talking with our higher education system about whether there are ways we can stand up particular training programs that might make West Virginia a leader in some educational opportunities that are perhaps not be available elsewhere in the country," he said. "We learned that today (during the Princeton meetings)."

"I think I can speak for Marty and Doug that the three of us are appreciative of the Speaker coming down here and hearing the concerns of our local community," Ellington said.

— Contact Charles Boothe at cboothe@bdtonline.com

Contact Charles Boothe at cboothe@bdtonline.com