Mercer Co. Commission opposes amendment on November ballot related to local taxes

Aug. 27—PRINCETON — The Mercer County County Commission is opposing an amendment to the state Constitution on the November election ballot that would give legislators the authority to remove or modify local revenue-raising taxes.

Commissioners Gene Buckner, Greg Puckett and Bill Archer approved a statement earlier this week that said the commission "shall not offer support for Amendment 2 due to the real and serious risks it poses to public safety and public education..."

The statement also asks every local government in the state to "take a public position on Amendment 2 stating its reasons for either supporting or not supporting" the amendment.

The Property Tax Modernization Amendment would "amend the State Constitution by providing the Legislature with authority to exempt tangible machinery and equipment personal property directly used in business activity and tangible inventory personal property directly used in business activity and personal property tax on motor vehicles from ad valorem property taxation by general law."

Those taxes currently provide localities with revenue for county services as well as for schools.

For example, Mercer County receives about $11 million a year from the taxes with the schools getting around $8 million of that and $3 million for the county, money used for services like law enforcement and parks, Mercer County Assessor Lyle Cottle said recently.

Legislators in the Senate have said they want to eliminate the taxes and replace the money lost by counties, which, statewide, totals more than $500 million a year.

State Sen. Chandler Swope, R-6th District, is a long-time advocate of getting rid of the equipment and inventory tax as a way to attract businesses into the state and helping those already here. He also supports ending the vehicle property tax, another attraction to bring people to the state and save residents money.

Swope said recently a plan has been worked out to make sure counties are reimbursed for any money lost.

Not only will the plan reimburse counties for the revenue they would lose from the taxes, each county would also receive at least $1 million above that to help offset the money the county spends on the "jail bill," to house prisoners in state correctional facilities.

Swope said the entire cost for those reimbursements would be $558 million a year, with another $140 million one-time expense to cover the cost of paying residents back the money they spent on the vehicle tax for the current year.

Going forward, when this plan would kick in on July 1, 2023, the vehicle tax revenue going to counties is included in the $558 million.

With a revenue surplus of $1.3 billion last fiscal year and about the same projected for this fiscal year (July 1, 2022 to June 30, 2023), Swope said the state can afford to make up the difference.

Of that $1.3 billion, $600 million was in actual revenue growth, the state's GDP (Gross Domestic Product), he said, with the rest in federal money and revenue from the coal and gas severance taxes (about $400 million).

Any federal money or the volatile coal and gas severance tax cannot be used to plan for ongoing spending, he said, but the $600 million can.

"We are confident the state will continue to see at least that much surplus each year," Swope said, adding that projections can only be used for five years simply because of statistical reliability.

But commissioners show a reluctance to rely on those projections, saying the counties cannot risk being left in a lurch, and there is no "legislative plan for Amendment 2, as a real plan to implement the serious changes ... requires the passage of legislation by the House and Senate. Here, there is no consensus, no agreement, and no clear plan that the voters can read and understand before they cast their vote..."

Commissioners also cautioned that West Virginia has a history of "boom or bust" revenue and expressed a concern that residents could end up paying for corporate cuts (equipment and inventory taxes) "through new sales taxes or fees..."

"As we soon approach the General Election, the voters deserve a final, codified, and agreed to legislative plan for Amendment 2, not a 'work-in-progress" proposal that, if implemented, could devastate and defund public safety and public education in all 55 counties in West Virginia..." the commissioners said.

Puckett has said in the past the idea to eliminate the taxes may be a good one, but there must be a guaranteed source of revenue in the state to reimburse the counties going forward, not just for a few years.{p class="p1"}The county could not function without the money, he said, and it has to come every year, not for just a limited period of time.{p class="p1"}"That money (about $3 million) goes to things like law enforcement and parks and other services," he added.

Cottle agreed, saying that revenue reimbursement must be in "perpetuity."

Swope said he is confident the money for the counties will be placed in each year's budget by the governor as a routine item.

But commissioners say they want those guarantees in place before the election to make sure voters know exactly what the ramifications of Amendment 2 will be before they vote to give legislators that authority.

Del. Marty Gearheart, R.-Mercer County, also supports ending the taxes, but only if the that ongoing source of revenue is established so counties will be made whole.

Monroe County Commissioner Melvin Young has held two meetings on the proposal at James Monroe High School with officials from other counties as well as legislators to learn more.

"I am not against it or for it yet," he said, adding that he is still learning and also wants a plan in place to reimburse counties in the future, not wanting to suddenly lose badly needed local funding if the state doesn't follow up on its commitment.

"We don't want to be left on our own," he said.

Young also has another issue because small counties with limited revenue already could be hurt the most and possibly lose their autonomy.

"I am concerned about that," he said.

Del. Roy Cooper, R-Monroe County, said in one of those meetings he knows it is a tall order for counties.

"I think what we are asking ... is for counties to trust us," he said. "I know that is hard, but I think that is what we are asking for."

— Contact Charles Boothe at cboothe@bdtonline.com

Contact Charles Boothe at cboothe@bdtonline.com