By Mary Catherine Brooks
In his State of the State address, Gov. Joe Manchin proposed giving the state Legislature authority to exempt from taxation personal property used in industrial and commercial businesses.
In Wyoming County, that translates to a $3.8 million tax loss in the current tax year and another $3.7 million estimated for the coming year, according to county Assessor Mike E. Cook.
Those lost dollars will transform directly into lost jobs and lost services, explained county Clerk Mike Goode.
“The very kinds of public services we were elected to provide,” Cook emphasized.
As it stands now, Senate Joint Resolution 11 would allow the state Legislature the authority to give county commissions the option to exempt personal property used in industrial (coal companies, larger corporations, etc.) and commercial (smaller, “mom and pop” style) businesses from personal property taxation in the county, according to state officials. Counties would have the option not to implement the exemption.
“As written, the amendment itself does nothing except allow the legislature to act,” explained Sen. Richard Browning, D-Wyoming. “If the legislature chooses to apply the exemption, then county revenue could be affected drastically.”
This would be on a going-forward basis only, if a county opted to do it at all, and would have to apply to all the same type of business property, according to officials.
First, however, the constitutional amendment would have to be approved by voters across West Virginia.
The state Legislature would also have to provide additional taxing authority, or some other means, for counties to make up the revenue lost to the exemptions.
“I am very much opposed to this amendment for two reasons,” Browning said.
“First, I sponsored legislation a few years back to require businesses to pay personal property taxes. I found out through working with the sheriff in Wyoming County that some businesses paid and others did not, and not much was being done to collect the unpaid taxes.
“I did not think this was fair to those legitimate businesses who did pay their taxes,” Browning said. “Although a methodology existed to collect the unpaid taxes, it was cumbersome, which is why not much effort was put into collecting the unpaid taxes. My bill simply said that if the owner of a business did not pay his or her taxes relating to that business, no business license was issued the next year.
“Secondly, this amendment makes no provision as to how the lost taxes will be collected if the legislature imposes the exemption.
“In Wyoming County’s case, I think, if the legislature chose to impose the exemption, we would lose 30 percent or our tax revenue, of which more than 70 percent goes to the school system, with the remaining percent going to running county government.
“To restore these lost taxes, this tax burden would have to be shifted somewhere and I don’t think any other tax entity, or tax payer, wants to pick up the tab on that.
“I understand this bill has generated much discussion and opposition among the counties of West Virginia. I am hearing that Gov. Manchin is willing to make certain changes to get it passed, none of which totally soften the blow to the counties,” Browning noted.
“I feel that this bill on commercial personal property taxes would place a strain on the local counties and municipalities, as well as our county school system,” noted Del. Linda Goode-Phillips, D-Wyoming. “The intent of the bill is good, to entice new businesses into the state and to keep our existing businesses, but cutting the funds locally is not.
“For this bill to work, other funding would have to be re-allocated to come back to counties to fund the appropriate entities,” she said. “And in this economic situation, there is very little funding to be shifted around.”
“I can appreciate what the governor wants to do by giving businesses a tax break,” added Del. Daniel Hall, D-Wyoming. “But without a plan to replace that money and fill those holes in our county and city budgets, I just cannot support the bill.”
