CHARLESTON, W.Va. — Resolutions that could lower property tax on manufacturing machinery and automobiles debuted today in the state Senate, but Democrats are already vocal with their skepticism.
The view of the minority party is particularly important in this instance because passing the resolutions would require a two-thirds majority vote. The Senate has 14 Democrats and 20 Republicans, so three Democrats would be needed for passage.
Property taxes are specified in the state Constitution, and changing them would require a vote of the citizens of West Virginia.
Democrats who rose and spoke about the property tax resolutions said there would need to be a concrete plan to make up the money to county governments and local school boards, not just general promises of growth.
Republicans countered that the details can be worked out in committee and that West Virginia needs to reduce the property tax on equipment for manufacturers as an economic generator.
The Republican majority has been talking since prior to the session’s start about reducing or eliminating the property tax on manufacturing equipment, an issue that has come up repeatedly over the years.
That would come at a cost of about $100 million a year, an amount that could be phased out over time.
Today that resolution made its debut, generating debate from the moment of inception. It has been assigned to both the Senate Judiciary and Senate Finance committees, and it was unclear when it would be taken up.
That resolution was accompanied by a companion that would authorize the Legislature to lower or eliminate personal property taxes on motor vehicles.
Senate Minority Whip Corey Palumbo, D-Kanawha, in an interview after the floor session, said Democrats could be persuaded to get on board with property tax cuts but they need to hear a more specific plan to make counties whole
“I think there’s certainly a handful of Democrats who would be open to the idea of getting rid of the business inventory tax,” Palumbo said. “I think that what’s unclear at this point is how exactly we’re going to do it.
“So the question is, if there’s a way that can be done to get rid of the tax and keep the counties whole then I think there could be some support for it. But if it’s a little bit unclear how that’s going to work then I think people are going to be less comfortable with it.”
The property tax issue prompted senator after senator to rise and speak at midday Tuesday.
Senator Mike Romano, D-Harrison, described his time as a Harrison County commissioner. He is concerned about financial effects on counties, volunteer fire departments and senior centers.
“There should be a fiscal note attached to this,” Romano said. “We should be able to make a decision based on the facts, not hyperbole”
Senate Finance Chairman Craig Blair, R-Berkeley, rose and said the details can be worked out during the committee process.
“That means every member of this body will have access and participation during that process and the ability to amend and work through,” said Blair, who is a sponsor of the resolution aiming at property taxes on vehicles.
“Me being the lead sponsor of one of those, I have every intention of making sure this entire body participates on the process.”
Blair contended that cutting the property tax on manufacturing equipment would lead to greater investment. Manufacturing growth is necessary to make up for low ebbs in the energy markets that have traditionally driven West Virginia’s economy, he said.
“These resolutions we’re talking about here are a heavy lift, but it’s a lift that must be done,” Blair said.
Senator Paul Hardesty, D-Logan, characterized the property taxes as “regressive and problematic.”
But Hardesty, a former Logan County school board member, said the revenue is necessary for local governments.
“If you want our help on this side of the aisle, don’t come to me with a growth story – that we’re going to make up this money by growth. Because in southern West Virginia that does not resonate,” Hardesty said.
“Come to me with something we can all work together on and move forward on. I’m all for manufacturing but don’t come to me and say ‘We’ll make up for it with growth.’”
Senator Eric Tarr, R-Putnam, agreed with Blair that the change to the tax code is necessary to diversify West Virginia’s economy. He said West Virginia can no longer count on coal to pay the revenue load.
“If our GDP goes down, the gross domestic product, those services of government are not available,” Tarr said.
“This is an effort to try to get it to where our revenue is so strong in West Virginia that we’re able to go back in and provide those services.”
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