Charleston Gazette-Mail. October 7, 2022.
Editorial: What voters need to know about Amendment 2
Among the four proposed amendments to the West Virginia Constitution on the November ballot, none has more history or complexity than Amendment 2. This would give the Legislature control over taxes on business inventory, machinery and personal property taxes on vehicles.
The proposal has been a staple of legislative debate for years, backed by business owners, corporate lobby groups and trade associations. It’s not surprising that the proposal finally got through, with a Republican supermajority controlling the House of Delegates and state Senate, but it’s important to note that this isn’t a strictly partisan issue. There are a lot of things to consider, and voters need to weigh everything carefully before casting their ballot.
Officially called the “Property Tax Modernization Amendment,” the purpose of the measure, as summarized by the Secretary of State’s Office, is “To 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.”
The reason the Legislature wants the power to control these taxes is pretty straightforward. The inventory tax is viewed as a burden on existing businesses and often is cited as a major hurdle in recruiting new businesses to the state. The credibility of that latter argument is debatable. Many argue that the state’s woeful workforce participation rate (typically dead last in the United States), along with poor infrastructure, low quality of life and other not-so-flattering statistics are the more prominent reasons the state economy and business climate aren’t exactly soaring. It’s possible that both are true.
Whatever the case, it’s easy to see where businesses and trade groups that support giving the Legislature the power to repeal the inventory tax are coming from. Why not let lawmakers eliminate a burdensome tax?
If it were that simple, the amendment would’ve been on the ballot and approved by the voters eons ago.
One of the major concerns about getting rid of the tax is that the revenue goes, by county, toward funding law enforcement agencies, fire departments, emergency medical services and schools. These are all essential services that are facing tough times as it is regarding funding. The Legislature hasn’t presented any kind of plan on how to make up that lost revenue. Lacking any novel ideas, there are only two options: Raise other taxes or slash services.
Another problem is that repealing the tax would affect every county differently. According to a 2020 Gazette-Mail analysis, Kanawha and Cabell counties made the most off the tax annually, at about $11 million and $8.6 million, respectively. However, that revenue accounted for only 5% of Kanawha County’s budget and 9.6% of Cabell County’s budget. That’s a significant portion of the budget and officials in either county would probably struggle to replace those funds, but it would be significantly worse in Hancock, Brooke and Pleasants counties, where the inventory tax provided more than 20% of annual revenue for each.
On paper, some counties would barely notice if the tax were repealed, but that can be deceiving, too. The Gazette-Mail analysis found many of the southern coalfield counties received less than 1% of annual revenue from the business inventory tax. Those counties are not only some of the poorest in the state, but in the entire nation. So, does low revenue mean those counties don’t need that tax money, or is it an additional indicator that economic activity in that region is flat-lining?
Another wrinkle to consider is, if Amendment 2 passes, it doesn’t guarantee the inventory tax or the tax on automobiles is gone. It only means the Legislature has the power to adjust or remove those taxes. Senate President Craig Blair, R-Berkeley, and Senate Finance Chairman Eric Tarr, R-Putnam, have made it clear that this is the path they want to follow to offer a tax cut. But they still have to come up with a plan that will pass the Senate and House and that Gov. Jim Justice will sign.
Surely a no-brainer, with GOP supermajorities in the Legislature and a Republican governor, right? Nope. GOP lawmakers and the governor have been squabbling with each other over the past three legislative sessions, and at least one special session, on tax cuts.
Justice favors an income tax cut, and has offered various plans on how that would work, the first of which involved completely repealing the tax within a couple of years, blowing a billion-dollar hole in the budget that would be patched with multiple tax hikes, including a massive sales tax increase.
More recent plans have centered around phasing out the income tax and compensating for the lost revenue with surplus funds. That surplus is suspect given, low revenue estimates and federal money doled out during the coronavirus pandemic.
The House and Senate have swapped places at least once on backing and opposing Justice’s income tax cut. The House passed the plan in a recent special session, but the Senate killed it. The butting of heads has gotten personal for Justice and created toxicity around the issue. It’s possible the House would go along with a Senate plan to reduce or eliminate the business inventory tax or vehicle taxes, but Justice could always veto the bill, and it’s far from certain whether the Legislature would have enough support to override the governor.
Finally, as with the other constitutional amendments on the ballot that would expand legislative power, it’s important for voters to remember that doesn’t apply only to the current Legislature, but to every Legislature that follows. The current Legislature is asking voters to trust them now, and ad infinitum.
It’s worth considering how this might help businesses in West Virginia. But voters also need to ponder what a future Legislature might have to do if the current one craters local revenue streams.
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The Intelligencer. October 12, 2022.
Editorial: Improving Life In West Virginia
There’s nothing to celebrate in news that the number of drug overdose deaths is increasing across the country. But the U.S. Centers for Disease Control and Prevention’s Provision Drug Overdose Death Counts did hold one piece of positive news for West Virginia. We are one of only six states that showed improvement in decreasing the number of overdose deaths over the past year.
For the U.S. as a whole, there has been a 6.6% increase. In the Mountain State, there was a 3.63% decrease between March 2021 and March 2022. Nebraska, Ohio, Pennsylvania, Maryland and Virginia also showed some improvement.
“West Virginia is starting to plateau and likely seeing a slight downward trend,” said Dr. Matthew Christiansen, director of the Office of Drug Control Policy, West Virginia Department of Health and Human Resources, according to a report by WBOY. “We are encouraged by CDC’s data and will continue our efforts to end West Virginia’s substance use epidemic.”
Just as important as the focus purely on reducing substance abuse, addiction and overdose deaths must be the work to improve the socio-cultural and economic conditions that have driven so many to a life of addiction.
We’ve got to offer the education and opportunities that will support good-paying jobs — and we’ve got to allow our economy to be diversified to the degree that those good-paying jobs are plentiful here. We’ve got to work toward providing better mental health resources for those who are struggling; and help a more healthy lifestyle accessible to everyone.
We can do it, West Virginia. The momentum is in our favor, but only if we keep tackling the whole problem.
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Parkersburg News and Sentinel. October 7, 2022.
Editorial: Blight: Action welcome, but more is needed
To most West Virginians, $9.2 million sounds like a lot of money, but when it is the starting point for grant funding that is meant to help communities remove abandoned and dilapidated properties, we must understand that is just a drop in the bucket if we are to truly address the problem.
Last week, the West Virginia Department of Environmental Protection, said that $9.2 million will be split among 21 Mountain State communities, with the announcement being made in one of them — Matoaka, in Mercer County.
“West Virginia is becoming the diamond in the rough, and people are noticing,” Justice said. “Let’s get rid of these buildings that are holding us back, join hands in moving our state in the right direction, and let’s start right here in Matoaka.”
Parkersburg is set to receive $650,000, according to the announcement.
In fact, money is headed to Buckhannon, Elkins, Mannington, Weston, Thomas, Salem, Parsons, Montgomery, Nitro, Oak Hill, Hinton, Clendenin, Bluefield, Princeton, St. Albans, Smithers, Wellsburg, Logan County, McDowell County and Mercer County.
“We’re extremely excited about this program and feel it has the potential to transform communities across the state,” DEP Secretary Harold Ward said. “Removing these structures provides a critically needed health and safety component while clearing the way for new economic development and boosting tourism.”
But this is just the initial phase, as Ward suggested more funding could become available to target more communities. Good.
Along with it, we’d better address the reason our communities are littered with such structures to begin with, as too many lawmakers show no desire to behave in a way that would grow and diversify our economy and attract and retrain residents — rather than continuing to push them away. The buildings are not what is holding us back, governor. We are being held back by the reasons they were left to rot in the first place.
Still, it is encouraging to see action of any kind on that front. We can only hope it continues.
END