Amendment could affect local budgets by more than $500 million, county officials say

A property tax amendment on state ballots this fall could lead to an effect of more than $500 million, an association of county officials has concluded.

Jonathan Adler

A working group representing county governments came up with that number. Jonathan Adler, the executive director of the West Virginia Association of Counties, presented the conclusion to state lawmakers at interim meetings this week and then spoke about the financial effect on MetroNews’ “Talkline.”

In 2021, he said, the total figure for taxes that could be affected by the amendment was $515 million across the state. The conclusion is that future years would reflect a similar figure, if not more.

That includes $219 million from business machinery and equipment, $84 million from business inventory, $26 million from other business personal property, $136 million from personal vehicles and $50 million from “supplemental” property taxes referring to tax bills from prior years just now being paid.

Property taxes have been defined in the state Constitution since the early 1930s. Most of the money from personal property tax goes to county school boards, county commissions and municipalities.

Of the $515 million, about $340 million flows to local school districts, $138 million to county government services, $35 million to municipal government services and $2 million goes already to state government.

“There’s a lot to this. We want to hear more information, the plans as to what the state wants to do,” Adler said, alluding to a stated intention by legislative leaders to provide 110 percent compensation.

“We just need to hear more concrete ideas and plans. We do not have an official position yet. We have no position because we’re working with them to try to compile those numbers and have these discussions going forward, but that doesn’t mean we won’t have a position in the end.”

Any proposal to make up the money to local governments would need to be sustainable over time, he said. “We’re not going to be able to support it if we don’t see the math that works for us.”

Lawmakers have long talked about having more flexibility, particularly with the property taxes businesses pay on equipment and inventory. Last year, lawmakers passed a resolution that could allow changes on personal property tax rates.

Because it’s a constitutional issue, West Virginia voters have say-so on the matter through General Election ballots next fall.

County government leaders are focused on the possible effects, and many have provided warnings that budgets for local services are so dependent on property taxes that they could be in a deep bind if state lawmakers don’t provide alternative means. State legislators have not yet specified what that alternative might be.

Kent Carper

The Kanawha County Commission has discussed the financial effects of the amendment several times recently, expressing concern each time.

“It’s bad,” President Kent Carper said during last Thursday’s commission meeting. “I’m beginning to get a lot of calls now from other county commissions and cities. They’re beginning to realize how serious this amendment is.”

Kelly Allen

The West Virginia Center on Budget and Policy think tank has emphasized that passage of the amendment could shift financial power away from local governments to state government “while residents will face the consequences of underfunded local services that could include everything from teacher layoffs to longer emergency response times.”

“The testimony we heard from counties this week underscores the huge crisis this amendment, if passed, would create in communities across the state.” said Kelly Allen, executive director of the center.

“Voters make decisions to fund local services that we all benefit from, like schools and emergency and fire response, but state legislators have made clear that they want to take control of local decisions away from communities to give a big tax break to mostly out-of-state corporations.”

Matt Harvey, the Jefferson County prosecutor who recently became president of the Association of Counties, has been keeping a close eye on the issue. He discussed the amendment recently on “Panhandle Live” on WEPM Radio.

Harvey said the upshot for Jefferson County would be more than $8 million — with the biggest amount going to the local board of education. He said lawmakers have communicated purposefully, but few solid answers about making up the money have been apparent so far.

“They’ve shown us good faith efforts that they’re very serious about that and they want to understand all the issues, and they’re engaging with us, so they’re not sticking their head in the sand,” he said. “And we’re very, very appreciative of that.”

Eric Householder

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, more moderate approach with all the stakeholders,” he said, citing the need to hone in on 77 personal property tax exemptions. “So we’ve got to get it right the first time, and it’s going to take a little time to develop the plan that we’re all talking about.”





More News

News
Governor Justice: no $465 million 'clawback' of federal funds for schools after waiver approval
The problem was based not on any allegations of misspending — but instead over whether school systems fell short on an obligation to maintain financial support for education at levels in line with overall spending.
April 19, 2024 - 6:10 pm
News
Fayette County inmate pleads guilty to killing other inmate
The incident happened in November of 2020 at the Mount Olive Correctional Center.
April 19, 2024 - 5:35 pm
News
Middle school athletes step out of shot put against transgender girl who just won court case
The situation unfolded at the Harrison County Championships for middle schools, just a couple of days after West Virginia transgender athlete won appeals court ruling.
April 19, 2024 - 2:37 pm
News
West Virginia State University holds a day of community service and giving back
The 11th annual WVSU Cares Day was held Friday at 17 sites throughout Kanawha and Putnam counties.
April 19, 2024 - 2:11 pm