Amendment 2 gets thumbs down at forum

Oct. 19—ATHENS — A forum on Amendment 2 Tuesday concluded that localities understand the needs of communities and should have control over tax revenues rather than turn that control over to state legislators and depend on the state to continue to enjoy revenue surpluses.

The forum was held at Concord University and hosted by the CU Political Science Program with political science Professor Jim White serving as monitor.

Panelists included Mercer County Commissioner Greg Puckett, Bluefield City Manager Cecil Marson, Princeton City Manager Mike Webb and Kelly Allen, executive director at the non-partisan West Virginia Center on Budget and Policy.

Amendment 2, which is on the ballot in November as the Property Tax Modernization Amendment, would change the state Constitution to give legislators authority to end or change the vehicle personal property tax as well as machinery and inventory tax in counties.

These two taxes raise substantial money for localities with Mercer County collecting about $11 million a year, with $8 million going to schools and $3 million for county services such as first-responders, parks and other needs.

State Republican leadership in both the Senate and House are supporting Amendment 2, with a bill already written that would reimburse counties for all of the local money lost if the two taxes end ($550 million statewide), plus at least $1 million to each county to help pay for counties to house inmates in regional jails.

They say they can pay for this by including $600 million each year in the state budget as record budget surpluses continue.

But local leaders here and across much of the state, as well as Gov. Jim Justice, are pushing back, urging residents to vote no on the amendment.

Puckett said giving legislators control over needed local revenue would be like the students, when they start working, giving 25 percent of their income to their parents who would have control over the money.

"The same thing will happen if this passes." he said of 25 percent of local revenue that would be turned over to legislators.

Puckett said it's "a matter of a lack of logic" on the part of legislators because taking away a county's ability to raise needed revenue leaves open the possibility the state could be in a position at some point to not have the money to reimburse counties.

It is also unfair to less affluent counties, he said, because it is already a struggle for them to survive and those that suffer now would "suffer more in the future" because affluent counties with larger populations have more political clout.

"Population centers get money first, then it's a need by need basis," he said. "I am definitely a no vote (on Amendment 2)."

Puckett, who is a Republican, said his no vote is not based on politics, it is based on legislators' "bad logic."

Webb said that "uncertainty" factor worries him about Amendment 2.

"Who would vote for uncertainty?" he said.

Following up on Puckett's parent analogy with the 25 percent, he said legislators, unlike parents, can change every two years, creating even more uncertainty as to what they may want to do.

Webb said "certainty plays a big role in municipal government" as plans must be made on revenue projections that are more accurate than relying on the state to reimburse.

"We have to have the money available," he said.

Marson said that at the municipal level of government, "there is no buffer between you and the public."

Local leaders see people, and problems, face to face, he said, so the needs are apparent and the money must be predictable and be there for schools, parks, activities for kids and other services.

He also said taxes are not the main issue to people, or businesses, considering to relocate, but a solid infrastructure, good schools, a clean environment, recreational opportunities and other amenities attract them.

Predictable money is needed to provide that environment.

Amendment 2 may be promoted with the "best intention," he said, but people change (in the Legislature) and priorities change.

Allen said the center has done a county-by-county analysis of the impact of Amendment 2 if the taxes are eliminated and the percentage of tax revenue affected in counties ranges from 7 percent of total revenue to 37 percent.

If those taxes are eliminated, the bulk of the savings, $329 million, would benefit businesses (machinery and inventory tax), she said, with $135.8 million benefiting taxpayers with the vehicle property tax.

In Mercer County, the average car tax bill is about $450 a year.

Allen said the state does have record surpluses now ($1.3 billion in fiscal year 2021-22 with about the same predicted for this fiscal year), so the $600 million is there, for now.

However, if that $600 million had been removed in 2019 the state would have seen a $431 million deficit just to pay for it.

Federal dollars have helped boost the state economy during the last few years, but that is not normal, she said.

"It is not indicative of West Virginia's economy."

Not only that, she said, the estimated $550 million needed to reimburse counties will go up every year.

Allen also said if any cuts have to be made in the state budget, higher education is usually the first in line to see them.

Panelists also commented on why the state GOP political leaders are at odds over Amendment 2, with Justice leading the opposition in the face of strong support for the amendment by his fellow Republicans, including all legislators who represent Mercer County.

But it is not a political issue at the city level, Marson said, its about the "collective good" and the county and cities usually are working well together.

"We all want the same thing," he said.

Puckett, who is also on the National Association of Counties Board, said state decisions don't always benefit counties.

"It is not what happens at the legislative level, but what happens when the rubber meets the road at the local level," he said. "That is where you have to be the most accountable."

Counties are already limited with what they can do to raise revenue, he said, and they are often left in a position to basically beg the state for money to handle local problems, like bad roads.

Puckett said politicians who are elected to go to Charleston often "remove the local hat" that put them in office and "that is not fair to the people in the community."

Puckett said legislators say they want local authority, they want local government, but they are often left beholding to party leaders who have power and are from other parts of the state.

Webb made the point that more people need to vote.

"Low voter turnout is who is in Charleston," he said. "They don't represent the people."

Webb said they are good people, but they in reality represent very few people.

Mercer County Assessor Lyle Cottle also attended the forum and said the $600 million is projected to be available for the next three and a half years.

"Then what are you going to do?" he said. "Where will it come from? Now, we have control over it."

It is "not good county government" to give up that control, he added, because the community benefits from it.

"We need to work hard to see this amendment does not pass," Cottle said.

The West Virginia Association of Counties also opposes the amendment.

Justice has proposed a plan to refund residents the car tax they pay rather than change the state Constitution.

Under his plan, each resident would continue to pay the tax, but would then be reimbursed by the state with the counties keeping the property tax revenue.

Justice is opposed to ending the machinery and inventory tax.

— Contact Charles Boothe at cboothe@bdtonline.com

Contact Charles Boothe at cboothe@bdtonline.com