The West Virginia Senate, in an attempt to spur economic growth and attract manufacturing jobs to West Virginia, has introduced two misguided pieces of legislation that only harm our state; they don’t help it. They are tax giveaways to large, out-of-state businesses while hurting West Virginia’s own citizens.
Senate Joint Resolution 9, along with SB 837, were introduced Monday, Feb. 17, in the Senate Finance Committee. SJR 9 is a resolution that creates a constitutional amendment to remove real and personal property tax authority from our counties and give it to our legislature. SB 837 is a companion piece that – with the voter approval of SJR 9 – puts into place the eventual elimination of the personal property tax on cars both for WV residents (and for out-of-state businesses auto fleet, too; the manufacturing machinery & equipment tax; and the personal property tax on retail inventory (think Walmart). These cuts will be phased-out over a six-year period.
According to our state tax department and cheerleaders in the State Senate, these business tax cuts amount to approximately $300 million dollars of revenue cuts to our counties, and WVACo estimates that the actual figure may be significantly higher than that. To replace these taxes, the Senate offers an increase in tobacco taxes covering cigarette packs, smokeless tobacco, and vaping products. These are tax increases to West Virginians of $88 million initially. And a jump from 6 to 6.5 percentage on the sales takes another $116.5 million from our checking accounts. In short, the tax burden dramatically shifts onto the people.
When added, these new taxes make-up about $200 million. And by their own estimates that’s still $100 million short of what’s needed to fill this $300 million hole – hole counties fear is significantly larger. And if you add the dismal state Tax & Revenue budget projections earlier in the session of $663 million in debt, we’re looking at close to $800 million in debt. At least.
SJR 9 would take property tax authority away from county government and give it to the legislature. That spells the end of counties, county autonomy for all practical purposes. We become fifty-five departments of the state, and every year every county will have to scramble for their annual budgets appearing before the legislature. What happened to the principle of smaller government, that’s closer to the people? $800 million dollars in debt is not a good start for this new West Virginia.
In the past 20 years, the State has made great strides in enacting policies and business tax reforms in the hope of attracting more jobs: Workers Compensation reform; eliminating the business franchise tax; passed “right to work laws; ended burdensome regulations on business; made it harder for lawyers to file frivolous lawsuits against corporations.
It’s a long list with a worthwhile goal. And altogether they have failed to change things for the better in West Virginia. And now the solution by our Senate leaders is “big government” and historic state debt?
These are the real problems facing West Virginia:
Very little flat land available for “site-ready” business development;
An increasingly unskilled, under-educated workforce;
An exodus of “our best and brightest” – our children don’t come back;
An unhealthy population suffering through an ongoing drug epidemic;
High health insurance rates that cannot be sustained – as our hospitals themselves are facing financial ruin.
Just last week, the Fairmont Regional Medical Center announced its closing, and 600 jobs or more go with it. What happens when we have no hospitals? Our rural areas already face a crisis by having no quick-access in a health emergency. Where’s the urgency on this critical issue by the legislature?
County Government is not a reason behind West Virginia’s long-suffering economy. County government and local decision-making is closest to the people – our neighbors, our friends – people we see every day. Its where we get our marriage licenses, keep our property records; its where we go to find justice; its where we go to fund parks, and it collects the taxes that fund our schools. It’s what people can depend upon to make their lives better each and every day.
Working together with the state and our cities, we can find the right solutions that attracts jobs and people to West Virginia. The WV Senate needs to stop playing politics and get serious about finding solutions to grow our economy – and stop enacting policy that encourages our kids to leave home…forever.
Jonathan Adler is executive director WV Association of Counties. This column shared by the West Virginia Press Association to its member newspapers.