Statehouse Beat: Many counties can't absorb another tax cut
By Phil Kabler, The Charleston Gazette
Although today marks only the second major meeting of the legislative Select Committee on Fair Taxation, many observers believe that among the taxes subject to the committee’s slashing will be personal property taxes on business inventory and equipment.
Senate President Bill Cole, R-Mercer, for one, has repeatedly told lobbyists the state inventory tax is a “job killer.” To which one commented, “How exactly has it killed his car dealerships?”
Of course, cutting property taxes cuts the only major source of revenue for counties, and a new report from the state auditor’s office suggests that most counties are ill-prepared to absorb cuts without laying off employees and cutting services.
For the coming 2015-16 budget year, which starts July 1, the 55 counties are projecting total revenues of $582.39 million. That’s down $79.1 million from the current budget year, and down $98.51 million from the $680.9 million of total revenue in fiscal 2013-14.
Declines in severance taxes are a factor, as production in Marcellus Shale counties has not been sufficient to offset declining prices for coal and natural gas.
In 2015-16, the 55 counties are projecting $29.29 million in severance tax collections, just over half of the $57.26 million collected in 2013-14.
Meanwhile, coal-producing counties are experiencing a double-whammy, with property taxes falling as residents move away, and as coal companies remove expensive mining equipment from idled mines.
Boone County, with total revenues of $20.44 million in fiscal 2014, is budgeted for $13.18 million in the coming fiscal year. Likewise, Lincoln County is looking at going from $7.02 million to $4.45 million; Nicholas County is falling from $10.5 million to $5.5 million; and Wyoming County is going from $10.65 million to $6.58 million.
(It’s no surprise that some of these counties have laid off or furloughed county employees, and cut services.)
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In fact, according to the auditor’s office Statewide Recap of County Budgets, only seven of 55 counties project budget growth in fiscal 2015-16, and not surprisingly, most are enjoying the oil and natural gas boom.
Those are: Braxton County, $4.7 million, up $330,000 from fiscal 2013-14; Doddridge, $7.9 million, up almost $3 million; Jefferson, $26.26 million, up about $672,000. (Jefferson County doesn’t have much in the way of oil and gas reserves, but it has something much more valuable: proximity to the metro-Washington, D.C. area.); Monroe County, $3.24 million, up about $345,000; Pleasants, $5.4 million, up $16,000; Ritchie, $4.09 million, up $152,000; Tyler, $3.98 million, up $490,000.
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Bottom line, about 48 counties are in no shape to absorb additional tax cuts mandated by the Legislature.
Eliminating the inventory tax would save $68 million a year, which would probably work out to a pittance for most companies, but would further exacerbate funding woes for counties and school boards. If the Legislature goes full-bore, eliminating personal property taxes on business equipment, machinery and other business personal property, that funding gap basically quadruples, and you have a lot of counties and school boards in a world of pain financially.
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Speaking of taxes, to save the GOP trollers some time, a reader sends along these delinquent property tax listings from the Monroe Watchman:
James C. Justice Companies: Sweet Springs District, 5 parcels, delinquencies of $22,610.42, $25,835.38, $401.52, $51,506.60, and $612.14. Union District, 5 parcels, delinquencies of $1,911.68, $10,542.36, $1,835.46, $144.52, and $2,819.08.
(For purposes of full disclosure, I’m always delinquent on my personal property taxes on my car, which come due in May and I pay when I renew my license plate in July. The late penalty on my 17-year-old car, which just recently topped 85,000 miles, is usually double the property taxes.)
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It’s been awhile since we mentioned plans for a $1 million Capitol perimeter security project, including a security fence/green space at the governor’s mansion and a bus turnaround north of the Culture Center, but the bid opening is set for June 2. Ten contractors attended a pre-bid conference last week.
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Finally, I’m pleased to say my little snippet about the Friends of the Cardinal meeting last week attracted four first-time guests to the meeting, including Alisa Bailey, CEO of the Charleston Convention and Visitors’ Bureau, who sought input on putting welcome signage and travel information in the train station.
Bailey thought she would have to go through the bureaucracy of Amtrak national headquarters, but instead only needed the OK of Charleston stationmaster Matt Crouch. Plans are to add signage, a display of Charleston travel guides, and pertinent information including phone numbers for downtown hotel shuttles. (In my younger days, I was one of those “we’ll find a hotel when we get to our destination” people.)
Longterm, Bailey is looking at promoting trips to Charleston by rail, focusing on the central Virginia and Cincinnati-area markets, particularly hoping to appeal to the popularity of train travel among Millennials.