Preview: W.Va. Property Tax Amendment On November Ballot

“The plan the previous year was they were just going to go ahead and exempt it,” O’Leary said. “But when they couldn’t come up with a way to pay for it, the amendment was tweaked a little bit to say, well, we’ll be allowed to do it. And we’ll figure out something later.”

Both sides agree eliminating the business equipment and inventory tax and the motor vehicle tax could cost schools, local and county governments more than $500 million in lost revenue.  Clark said the plan on how to replace those funds will be part of the legislative process.  

“I’ve heard several different ideas. And that’s all they are – ideas,” Clark said. “What if we had to raise the food tax? Or what if we had a meal tax? Or what if we increased the hotel-motel tax or something, there’s all kinds of things. People are going to have to really trust in the abilities of Chairman Tarr and Householder and their understanding of what the budget is and trust that they’re going to come up with the best solution. How we’re going to make counties whole, I don’t know. But right now, the main goal is – let’s get this thing passed so we can at least start looking.”

O’Leary said the lost revenue would devastate local and county services and significantly shift decision making power from local to state government.   

“These cuts account for 27 percent of total property taxes and that’s the bulk of funding for local governments that really rely heavily on property taxes,” O’Leary said. “In some counties, it’s even greater, up to more than 30 or 40 percent of their total revenue. A lot of this money goes to those excess levies that directly fund libraries, EMS services, fire protection, senior centers. That money is earmarked and if that base is taken away they have to redo all of those excess levees, all of those bond levees to make sure that the revenue is still there.”

Clark said maintaining a machinery and inventory tax puts West Virginia at a competitive disadvantage in recruiting and retaining businesses

“You take a company like Toyota or any auto manufacturer – once that car is made, it’s taxable, it’s inventory. You have an $80,000 car sitting on a lot,” Clark said. “The Green Power bus folks, I have no idea what an electric bus is going to cost to make. Let’s say they make 20 of them and they’re $100,000 each. Well, they’re paying taxes on something that’s not even sold, it’s just sitting there. So yes, it’s going to attract new businesses here. It is a deterrent right now for businesses to move into the area.”