HUNTINGTON Ƶ The Huntington City Council voted to oppose Amendment 2 on the Nov. 8 ballot, despite Republican politiciansƵ criticism of the resolution.
Amendment 2 asks West Virginia residents voting in the Nov. 8 election if they want to allow the Legislature to eliminate taxes on business inventory, equipment and machinery, as well as personal property taxes on motor vehicles.
Huntington Mayor Steve Williams and the Democratic members of the City Council were for passing the resolution in opposition of Amendment 2.
However, the lone Republican council member at the Oct. 24 meeting, Tyler Bowen, opposed it and sought to flip the amendment, with Delegate Daniel Linville, R-Cabell, speaking as his invited guest.
BowenƵs proposed amendment took 10 minutes to be read into record, but with BowenƵs Republican peers Ƶ Todd Sweeney and Dale Anderson Ƶ absent, the proposed amendment failed to move beyond his introduction.
Williams warned the council members that if Amendment 2 passes, it wonƵt be the legislators the Huntington residents call when money for projects disappears Ƶ it will be the cityƵs elected officials.
Dueling voices
Linville, who was invited to the meeting by Bowen, said the cityƵs resolution has a lot of inaccuracies. The points Linville made were that there is a plan in place to replenish the lost tax money and the passage of Amendment 2 would affect more than $400 million of the funds, not over $500 million as the resolution suggests. He said the plan is on the LegislatureƵs website.
ƵThe risk to our counties and our municipalities is not in passing Amendment 2; itƵs in doing nothing,Ƶ he said. ƵForty of our counties prior to the pandemic showed declining revenue from those property tax sources.Ƶ
Ƶ an example, he said Wayne County saw $11.1 million in such taxes in 2018 and 2019, but it dropped to $4.8 million due to a coal mine shutting down. He asked how a government is supposed to budget for those situations.
Williams said while he does not doubt Amendment 2 could be beneficial for Huntington businesses and economic development, there is no guaranteed plan in place for replenishing the funds for local governments.
Ƶ an example, Williams pointed to the council repealing last year the cityƵs business and occupation tax for retail businesses and restaurants, which was first suspended in March 2020 due to the COVID-19 pandemic. Williams said it took 10 years to get to the point where they could do that.
ƵWe had a plan in place that we were able to point very directly to, and as a result, you voted to eliminate that tax,Ƶ he said.
Plan in place
Seth DiStefano, policy outreach director of the West Virginia Center on Budget & Policy, said no part of the Amendment 2 question on the ballot guarantees the state government will make local governments whole with the lost tax base.
DiStefano said while there is a plan to make county budgets whole, the SenateƵs plan has put a lot of focus on revenue the state has made during the COVID-19 pandemic, which isnƵt a true reflection of the stateƵs income because of $12 billion of federal pandemic assistance received.
He said without the pandemic money, there would not be enough to make the counties whole, leaving the Legislature in charge of picking who gets funding cuts.
ƵAmendment 2, if itƵs passed, gives the state Legislature the choice as to who takes the hit,Ƶ he said. ƵIf the state Legislature is deciding to cut themselves or deciding to cut local government, who do you think wins that fight every single time?Ƶ
Linville said West Virginia has a $1 billion rainy day fund and school boards have more than $1 billion in a reserve account. The state also had a $1.3 billion surplus last year, $400 million of which is unspent, as well as other unspent funds.
ƵThe reality is we can pay for this. We can super fund all of these counties,Ƶ he said. ƵWe can make sure that all of the items that are in this resolution, all of the services provided, are able to be super funded in a more predictable and a baseline way.Ƶ
Loose plans
Williams said until he sees a plan, he is wary of trusting the legislative bodyƵs promise that the lost funds would be replenished. He said when it comes time to start budget discussions in March for new equipment and recruitment for first responders or paving streets, the city would have to go to the Legislature to ask for money to cover the costs.
ƵSo am I going to trust Governor (Jim) Justice, who was saying, ƵHold on, this isnƵt the direction to go,ƵƵ he said, Ƶor a Legislature who, every time that we step forward, theyƵre saying, ƵYou canƵt have the authority to do these thingsƵ? I know who I am going to be with every single time.Ƶ
DiStefano said only 0.4% of property tax revenue in West Virginia Ƶ about $8 million Ƶ can be used by state government entities. Amendment 2 would give the Legislature power over 27% of the revenue, he said.
ƵThatƵs a sizable increase in power,Ƶ he said. ƵThat power comes from you, the City Council. That power comes from your constituents, and it goes down to the state Legislature if Amendment 2 were to pass.Ƶ
Council members speak
After back-and-forth between council member Tia Fix Rumbaugh and Linville about the discussion at hand, Linville said the tax law was put into place in 1932 by voters when almost no West Virginians owned a motor vehicle.
ƵThe amendment that was proposed (by Bowen) called not passing Amendment 2 a job destroying (decision) which would cause businesses to flee and jobs to be lost,Ƶ she said. ƵBut thereƵs no evidence of that because itƵs been in existence for 90 years.Ƶ
Linville disagreed, stating that four decades ago West Virginia had 140,000 manufacturing jobs, a number that has dropped to fewer than 50,000. He said Rumbaugh misquoted the amendment, stating there was only a risk that businesses leaving would occur.
MondayƵs meeting came on the same day Justice held a public discussion in Huntington opposing Amendment 2. Councilman Bob Bailey said Justice told the crowd if the amendment passes, the city and county would be out of business.
ƵYouƵve got to vote this thing down and get rid of it. ItƵs going to destroy (all our local government) if it passes,Ƶ Bailey said. ƵWe wonƵt have enough money to work with.Ƶ
Councilman Mike Shockley said he trusts the mayorƵs opinion.
Chairwoman Holly Smith Mount was also absent from MondayƵs meeting.
