A property tax amendment on state ballots this fall could have an effect of more than $500 million, an association of county officials has concluded.
A working group representing county governments came up with this figure. Jonathan Adler, executive director of the West Virginia Association of Counties, presented the finding to state lawmakers in interim meetings this week, then spoke about the financial effect on MetroNews’ “Talkline.”
In 2021, he said, the total tax figure that could be affected by Amendment 1 was $515 million statewide. The conclusion is that future years would reflect a similar figure, if not more.
This includes $219 million from business machinery and equipment, $84 million from company inventory, $26 million from other company personal property, $136 million from personal vehicles and $50 million in “additional” property taxes referencing tax bills from previous years.
Property taxes have been defined in the state constitution since the early 1930s. Most personal property tax money goes to county school boards, county commissions, and municipalities.
Of the $515 million, approximately $340 million goes to local school districts, $138 million to county government services, $35 million to municipal government services, and $2 million already goes to the government of the State.
“There is a lot to that. We want to hear more information, the plans for what the state wants to do,” Adler said, alluding to the legislative leaders’ stated intention to provide 110% compensation.
“We just need to hear more concrete ideas and plans. We don’t have an official position yet. We don’t have a position because we’re working with them to try to compile those numbers and have those discussions going forward, but that doesn’t mean we won’t have a position at the end.
Any proposal to offset local government money should be sustainable over time, he said. “We won’t be able to support it if we don’t see the math that works for us.”
What did Jonathan Adler, executive director of the WV Counties Association, say when he appeared before the Joint Finance Committee earlier this week? He talks about his looks @DaveWilsonMN. LOOK: https://t.co/yCFQ3nDJuy pic.twitter.com/dbNitoK2vB
— MetroNews (@WVMetroNews) June 16, 2022
Lawmakers have long talked about having more flexibility, especially with the property taxes companies pay on equipment and inventory. Last year, lawmakers passed a resolution that could allow changes to personal property tax rates.
Because it’s a constitutional issue, voters in West Virginia have their say on the issue through the ballots in next fall’s general election.
County government leaders are focused on the possible effects, and many have warned that local utility budgets are so dependent on property taxes that they could be in deep stalemate if state lawmakers do not provide other means. State lawmakers have yet to specify what that alternative might be.
The Kanawha County Commission has recently repeatedly discussed the financial effects of Amendment One, each time expressing concern.
“It’s bad,” Chairman Kent Carper said during the committee’s meeting last Thursday. “I’m starting to get a lot of calls from other county and city commissions. They’re starting to realize how serious Amendment One is.
The West Virginia Center on Budget and Policy think tank highlighted that passage of Amendment 1 could transfer financial power from local governments to state government “as residents face the consequences of underfunded local services that could include everything from layoffs of teachers to longer emergency response times”.
“The testimony we heard from the counties this week underscores the enormous crisis this amendment, if passed, would create in communities across the state.” said Kelly Allen, the center’s executive director.
“Voters make decisions to fund local services that we all benefit from, like schools and emergency and fire response, but state lawmakers have made it clear they want to take control of local decisions from communities. to give a big tax break to most crown corporations.
Matt Harvey, the Jefferson County attorney who recently became president of the Counties Association, has been following the matter closely. He recently discussed Amendment One on “Panhandle Live” on WEPM Radio.
Harvey said the result for Jefferson County would be more than $8 million — with the largest amount going to the local school board. He said lawmakers had communicated on purpose, but few solid answers on how to build the money had emerged so far.
“They’ve shown us good faith efforts that they’re very serious about it and they want to understand any issues, and they’re engaging with us, so they’re not putting their heads in the sand,” did he declare. “And we are very, very grateful for that.”
House Finance Chairman Eric Householder, R-Berkeley, also speaking on “Panhandle Live,” said lawmakers understand the need to be careful with property taxes and local budgets.
“My vision is a slower and more moderate approach with all stakeholders,” he said, citing the need to focus on 77 personal property tax exemptions. “So we have to get it right the first time, and it’s going to take some time to develop the plan that we’re all talking about.”