April 15, 2010
Wolfe Administration Submits Draft of Proposed Occupation Tax
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By Tony Rutherford
Huntingtonnews.net Reporter
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Huntington, WV (HNN) – Amidst a civil, yet vocal, opposition, the Wolfe Administration’s ‘draft’ version of a proposed one percent occupation tax has been handed to council members. At the Wednesday afternoon Finance Committee meeting many council members in attendance held back questions and comments as they have not digested the 30 plus page proposal.
Mayor Kim Wolfe addressed council and a group of about 20 citizens in attendance with his characteristic accent the positive first (thanks for working through challenges to date) and noting that “Huntington is moving in the right direction” for a cleaner, safer, more responsive city.
Addressing a $2 million dollar shortfall, which he partially attributed to national economic conditions, Wolfe outlined four possible leadership choices: (a) increase the user fee; (b) oppose increase in B & O tax on business; (c) do nothing, or (d) implement the occupation tax, which is the final plank in the Home Rule authority. Wolfe called it the “most equitable” of choices.
As proposed, the occupation tax differs from an income tax. It would apply to earned income within the city, but not to retirement benefits, unemployment compensation, workmen’s comp, death benefits, liability and others.
Currently, all individuals working in the city pay $3 per week for the user fee, which is $156 per year. The occupation tax exempts the first $10,000 of wages earned; however employers would withhold the tax and the employee would provide documentation to receive a refund.
Mayor Wolfe referred to the plan as a “tax reform” for the city. In order to implement an occupation tax under the pilot home rule program, the city agreed to eliminate the unpopular, regressive user fee. Although many low income wage earners critize it as unfair, at least one opponent called it unfair to higher wage earners, unless they receive more services.
Brandi Jacobs Jones, director of finance and administration, stated the proposal would “maintain and improve on our current environment,” referencing that “our city is completely different than it was three or four years ago, it’s astounding.”
City Attorney Scott McClure called the proposed tax “reasonable, proper and uniform.”
Finance Director Deron Runyon referred to a 2008 calculation by the Marshall University Center for Business and Economic Research which conservatively projected $8 million dollars. The user fee provides about $4.5 million dollars annually and is dedicated to police department and street improvements.
Under the proposed occupation tax all money would flow into the general fund.
Runyon projected that the first year of collection (July 1, 2010-June 30, 2011) “would be revenue neutral,” noting that it would be offsetting the recession lowered B & O revenues. He cautioned council against other “revenue source decreases” until “we see how the numbers come in.”
The occupation tax would offset furloughs (approximately $325,000), maintain current paving levels ( approximately $200,000-$300,000) and pump additional money (approximately $750,000-$800,000) into the contingency fund.
Although a new tax would have some detriments , such as high wage earning individuals choosing to move outside the city, Runyon stated that the do nothing and go with all the furloughs , layoffs and cuts would be more of a “detriment to business.”
TO DOWNLOAD A PDF OF COMMON QUESTIONS FROM THE PRESENTATION, CLICK HERE
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Wolfe Administration Submits Draft of Proposed Occupation Tax
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – Amidst a civil, yet vocal, opposition, the Wolfe Administration’s ‘draft’ version of a proposed one percent occupation tax has been handed to council members. At the Wednesday afternoon Finance Committee meeting many council members in attendance held back questions and comments as they have not digested the 30 plus page proposal.
Mayor Kim Wolfe addressed council and a group of about 20 citizens in attendance with his characteristic accent the positive first (thanks for working through challenges to date) and noting that “Huntington is moving in the right direction” for a cleaner, safer, more responsive city.
Addressing a $2 million dollar shortfall, which he partially attributed to national economic conditions, Wolfe outlined four possible leadership choices: (a) increase the user fee; (b) oppose increase in B & O tax on business; (c) do nothing, or (d) implement the occupation tax, which is the final plank in the Home Rule authority. Wolfe called it the “most equitable” of choices.
As proposed, the occupation tax differs from an income tax. It would apply to earned income within the city, but not to retirement benefits, unemployment compensation, workmen’s comp, death benefits, liability and others.
Currently, all individuals working in the city pay $3 per week for the user fee, which is $156 per year. The occupation tax exempts the first $10,000 of wages earned; however employers would withhold the tax and the employee would provide documentation to receive a refund.
Mayor Wolfe referred to the plan as a “tax reform” for the city. In order to implement an occupation tax under the pilot home rule program, the city agreed to eliminate the unpopular, regressive user fee. Although many low income wage earners critize it as unfair, at least one opponent called it unfair to higher wage earners, unless they receive more services.
Brandi Jacobs Jones, director of finance and administration, stated the proposal would “maintain and improve on our current environment,” referencing that “our city is completely different than it was three or four years ago, it’s astounding.”
City Attorney Scott McClure called the proposed tax “reasonable, proper and uniform.”
Finance Director Deron Runyon referred to a 2008 calculation by the Marshall University Center for Business and Economic Research which conservatively projected $8 million dollars. The user fee provides about $4.5 million dollars annually and is dedicated to police department and street improvements.
Under the proposed occupation tax all money would flow into the general fund.
Runyon projected that the first year of collection (July 1, 2010-June 30, 2011) “would be revenue neutral,” noting that it would be offsetting the recession lowered B & O revenues. He cautioned council against other “revenue source decreases” until “we see how the numbers come in.”
The occupation tax would offset furloughs (approximately $325,000), maintain current paving levels ( approximately $200,000-$300,000) and pump additional money (approximately $750,000-$800,000) into the contingency fund.
Although a new tax would have some detriments , such as high wage earning individuals choosing to move outside the city, Runyon stated that the do nothing and go with all the furloughs , layoffs and cuts would be more of a “detriment to business.”
TO DOWNLOAD A PDF OF COMMON QUESTIONS FROM THE PRESENTATION, CLICK HERE
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