Plan to replace revenue in counties if property tax ends still being developed

Jul. 5—State legislators continue to iron out details to create a continuous revenue stream that will replace local money lost if the property tax is ended.

Amendment One, or the Property Tax Modernization Amendment, will be on the ballot in November, asking voters to decide if the business equipment and inventory tax as well as the personal property tax (vehicle, boats, trailers) in counties will be cut.

"The Legislature is working on a plan to fully fund counties and schools at least as high or higher than current property tax revenues," state Sen. Chandler Swope, R-6th District, said. "The goal is to publish this plan well in advance of the November election when voters will vote on Amendment One. This amendment will allow the legislature to cut property taxes."

Swope said he does not yet know when the plan will be published, "but I'm confident there will be plenty of time for voters to consider."

Mercer County Assessor Lyle Cottle said he recently attended an assessors meeting in Charleston and all are concerned about that replacement funding, which is vital to counties, with Mercer County standing to lose about $11 million a year in revenue, about $8 million of which goes to the local school system.

"What do we do if they don't have it?" he said of the ongoing revenue stream. "Nobody has gotten word from any senators on where the money is coming from."

Cottle said the revenue stream would have to be in "perpetuity" because the counties must have it every year in order to provide all of the necessary service to residents, from education to law enforcement to parks.

Statewide, the total the state would have to reimburse counties at a minimum is more than $500 million.

Del. Marty Gearheart, R-Mercer County, said he is also concerned about the ongoing source of the replacement money since it could not be for just a limited time.

Ending the property tax, which costs Mercer County residents hundreds of dollars or more a year on the their vehicles, would be popular, he said, and Amendment One may pass.

"I support it, but we have to have a continuous funding mechanism in place," Gearheart said.

Cottle said the average annual tax ticket on a vehicle in Mercer County is about $450, with more expensive vehicles running $1,500 or more, and that keeps going up because vehicles are assessed using the latest NADA (National Automobile Dealers Association) figures and those prices have kept rising.

Mercer County Commissioner Greg Puckett said the county could not function without the money, and it has to come every year, not for just a limited period of time.

"That money (about $3 million for county operations) goes to things like law enforcement and parks and other services," he said.

Puckett suggested legislators should look at picking up the tab on the county jail bill, with about $1.7 million a year spent on housing prisoners at Southern Regional Jail.

"That money could be used to help pay for services," he said.

Puckett said he values the ongoing dialogue about the issue between the West Virginia Association of Counties and legislators and hopefully the details will be worked out.

Swope has always maintained the money will be replaced, plus an average of about 10 percent more than counties receive now from the tax as the state is seeing unprecedented growth, with a $1.3 billion surplus this year and about the same projected for next year.

The primary reason for cutting the taxes, he said, is to entice more businesses and people to locate in the state, and the growth from that will be enough for the state to backfill the more than $500 million a year the state will return to counties.

Swope recently said he is aware of the skepticism and caution in counties.

The problem is, counties and school boards don't trust the Legislature to replace the money," Swope said. "I live in Mercer County. There is not one single legislator who doesn't live in a county. There is not one single legislator I know who is going to vote to cut taxes and say, 'Oh, good, I just cut your taxes, but how about helping get elected again' (when taking away funds for the county and school without replacing them and forcing localities to raise taxes)."

"That would be political suicide," he added, and that is why legislators will have a workable plan.

"We are going to have a bill prior to the (November) election to show exactly how we are going to replace the money," he said, adding that it is complex to put it all together and he is not sure when the details will be released, but reiterated it will be ready for everyone to see well before the election.

— Contact Charles Boothe at cboothe@bdtonline.com

Contact Charles Boothe at cboothe@bdtonline.com