April 30, 2010
EXCLUSIVE: Huntington Has to Get It Right
Bates Will Propose “Phase In” of Modified Occupation Tax
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – Mark Bates, vice chairman of Huntington City Council, is a small businessman. He represents a district that includes some of the higher income earners in the city.
Contacted by phone Thursday night, April 29, Bates essentially told HNN that it’s time to slow down on the occupation tax and get it right. Based on his own reading of the draft ordinance, he finds it convoluted (complicated) and would not, as written, receive his support.
Even with various council members repeating that the draft will be altered into a tax reform package, “there’s no one rushing to me in favor,” Bates said. Previously, Richard Cobb supported the proposal at a public hearing, but he stepped back in a letter to the editor published Thursday, April 29. Paraphrased by Bates, the letter stated, “look, slow down and make sure we are doing the right thing. I agree with him. “
The vice chairman continued, “We gotta’ get this right. We have erred from the community, we heard from folks who live in the city or out of the city, we’ve heard just a little bit of support. We have [heard from ] major employers that are coming out in opposition; the Chamber of Commerce involves quite a few hundred people in opposition. We might need to engage some of these people to help us to get this things right and get the city back on track.”
One of the reasons Bates stated for treading carefully is that at the time the home rule pilot program was enacted, the stock market was near 14,000 and the local unemployment rate was five percent. Recovering from the deepest recession since the great Depression, stocks have slowly regain 10,000 and 11,000 levels but local unemployment has soared to ten percent. For those reasons, a one percent proposal pre-recession might not be prudent for the recovery.
(Editor’s Note: The recession has reduced user fee revenues for the city, too, specifically from the loss of approximately 1,200 employees previously paying weekly user fees. This has , for example, reduced money available for paving in the upcoming fiscal year.)
A representative of 90 Appalachian Power employees asked about the tax calculations for earnings inside and outside the city. A ratio was mentioned by a representative of the administration. As proposed, the tax would be one-percent of earnings from work performed inside the city limits.
“All that has to be figured out,” Bates said. “ We’re possibly creating another bureaucracy” for implementation and enforcement. Further, he wants to address a statement from the finance director that compliance and enforcement are often “on faith,” since the city cannot afford employment of tax compliance auditors.
One of the issues constituents and others have stressed is collections. Bates explained that a large amount of the delinquencies published represent people who are dead and businesses that have closed. They remain on the books avoid a charge off against a particular fiscal year’s budget. Still, the city and council subsequently approved a collection agency and a law firm to go after deadbeats still operating and both the agency and attorneys have brought in a little over $1.5 million dollars for city coffers.
PHASE IN OF TAX
Although not a member of the Finance Committee of City Council which meets at 4 p.m. Friday, April 30, Bates has an alternative proposal --- a “phase in” version of the occupation tax which would start at 0.6% the first year, then go to 0.8 the second year, and capping at 1% the third year. In addition, he favors reexamination of the low income ($10,000) exemption and lowering the proposed $250,000 income cap, too.
Bates equates the federal poverty level with a low income exemption, but also contemplates that low earners do consume city services. He would consider supporting a proposal that contains a partial exemption, for example, a person making $15,000 now pays $156 for user fees; a 50% exemption on occupation tax would reduce their payment to $78.
He agreed that without clear and stringent procedures in place prior to implementation, fair and equitable collection possibly would not occur, leading to inconsistencies similar to the patchwork residency requirement and enforcement thereof.
MIND MADE UP ATTITUDES DISCONCERTING
During the proposal process, Bates has found one aspect disconcerting --- The number of people who believe council has its mind made up to enact the tax. Nothing could be further from the truth; the proposal is a fluid document subject to amendments and other adjustments.
“This is certainly not a done deal,” Bates stated, explaining that he had read and responded to most legitimate e-mails. “I could be in [my car rental business office] making calls and making money, but I’m on the phone [with citizens] and checking people’s pot holes. I’m doing this because I love the City of Huntington.”
Council members receive compensation of only $7,200 annually. They are paid for attending two council meetings a months, but their responsibilities often include attendance at neighborhood meetings, committee meetings, phone calls, follow up on constituent problems, budget and work sessions.
TAX REFORM EDUCATION STILL NEEDED
Despite the efforts to package the occupation tax with other tax reforms, Bates still receives feedback, not on municipal service fees , or B & O, or tax reform but the occupation tax. They range about 40-1 against. The vice chairman emphasized the need to slow down and solicit input from the chamber of commerce, employers and Marshall University.
“I have not had one person that complained to me about paying the municipal service fee. One business owner said I don’t like B & O (business and occupation)” but understood the need for it. Individuals who do not pay B & O expressed concern for the one percent out of their pay checks, not the savings for a business.
SINK HOLE
Bates represents the district that includes Wilson Court and Enslow Blvd., where the sink hole materialized during the start of a Huntington Sanitary Board expansion and upgrade. Fifteen customers on Wilson Court lost water and until late Thursday had in effect a boil water advisory since lifted by W.Va. American Water.
“I talked to Jim Johnson at six o’clock . He seems to think actually folks over there will get a lot of sidewalks and infrastructure repaired and redone,” Bates said.
Enslow residents have a regularly scheduled community meeting set for Saturday, May 1 at 9:30 a.m.
At this time, the Huntington Sanitary Board is on record that the adjustments to the project will not increase the cost of the upgrade.
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EXCLUSIVE: Huntington Has to Get It Right
Bates Will Propose “Phase In” of Modified Occupation Tax
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – Mark Bates, vice chairman of Huntington City Council, is a small businessman. He represents a district that includes some of the higher income earners in the city.
Contacted by phone Thursday night, April 29, Bates essentially told HNN that it’s time to slow down on the occupation tax and get it right. Based on his own reading of the draft ordinance, he finds it convoluted (complicated) and would not, as written, receive his support.
Even with various council members repeating that the draft will be altered into a tax reform package, “there’s no one rushing to me in favor,” Bates said. Previously, Richard Cobb supported the proposal at a public hearing, but he stepped back in a letter to the editor published Thursday, April 29. Paraphrased by Bates, the letter stated, “look, slow down and make sure we are doing the right thing. I agree with him. “
The vice chairman continued, “We gotta’ get this right. We have erred from the community, we heard from folks who live in the city or out of the city, we’ve heard just a little bit of support. We have [heard from ] major employers that are coming out in opposition; the Chamber of Commerce involves quite a few hundred people in opposition. We might need to engage some of these people to help us to get this things right and get the city back on track.”
One of the reasons Bates stated for treading carefully is that at the time the home rule pilot program was enacted, the stock market was near 14,000 and the local unemployment rate was five percent. Recovering from the deepest recession since the great Depression, stocks have slowly regain 10,000 and 11,000 levels but local unemployment has soared to ten percent. For those reasons, a one percent proposal pre-recession might not be prudent for the recovery.
(Editor’s Note: The recession has reduced user fee revenues for the city, too, specifically from the loss of approximately 1,200 employees previously paying weekly user fees. This has , for example, reduced money available for paving in the upcoming fiscal year.)
A representative of 90 Appalachian Power employees asked about the tax calculations for earnings inside and outside the city. A ratio was mentioned by a representative of the administration. As proposed, the tax would be one-percent of earnings from work performed inside the city limits.
“All that has to be figured out,” Bates said. “ We’re possibly creating another bureaucracy” for implementation and enforcement. Further, he wants to address a statement from the finance director that compliance and enforcement are often “on faith,” since the city cannot afford employment of tax compliance auditors.
One of the issues constituents and others have stressed is collections. Bates explained that a large amount of the delinquencies published represent people who are dead and businesses that have closed. They remain on the books avoid a charge off against a particular fiscal year’s budget. Still, the city and council subsequently approved a collection agency and a law firm to go after deadbeats still operating and both the agency and attorneys have brought in a little over $1.5 million dollars for city coffers.
PHASE IN OF TAX
Although not a member of the Finance Committee of City Council which meets at 4 p.m. Friday, April 30, Bates has an alternative proposal --- a “phase in” version of the occupation tax which would start at 0.6% the first year, then go to 0.8 the second year, and capping at 1% the third year. In addition, he favors reexamination of the low income ($10,000) exemption and lowering the proposed $250,000 income cap, too.
Bates equates the federal poverty level with a low income exemption, but also contemplates that low earners do consume city services. He would consider supporting a proposal that contains a partial exemption, for example, a person making $15,000 now pays $156 for user fees; a 50% exemption on occupation tax would reduce their payment to $78.
He agreed that without clear and stringent procedures in place prior to implementation, fair and equitable collection possibly would not occur, leading to inconsistencies similar to the patchwork residency requirement and enforcement thereof.
MIND MADE UP ATTITUDES DISCONCERTING
During the proposal process, Bates has found one aspect disconcerting --- The number of people who believe council has its mind made up to enact the tax. Nothing could be further from the truth; the proposal is a fluid document subject to amendments and other adjustments.
“This is certainly not a done deal,” Bates stated, explaining that he had read and responded to most legitimate e-mails. “I could be in [my car rental business office] making calls and making money, but I’m on the phone [with citizens] and checking people’s pot holes. I’m doing this because I love the City of Huntington.”
Council members receive compensation of only $7,200 annually. They are paid for attending two council meetings a months, but their responsibilities often include attendance at neighborhood meetings, committee meetings, phone calls, follow up on constituent problems, budget and work sessions.
TAX REFORM EDUCATION STILL NEEDED
Despite the efforts to package the occupation tax with other tax reforms, Bates still receives feedback, not on municipal service fees , or B & O, or tax reform but the occupation tax. They range about 40-1 against. The vice chairman emphasized the need to slow down and solicit input from the chamber of commerce, employers and Marshall University.
“I have not had one person that complained to me about paying the municipal service fee. One business owner said I don’t like B & O (business and occupation)” but understood the need for it. Individuals who do not pay B & O expressed concern for the one percent out of their pay checks, not the savings for a business.
SINK HOLE
Bates represents the district that includes Wilson Court and Enslow Blvd., where the sink hole materialized during the start of a Huntington Sanitary Board expansion and upgrade. Fifteen customers on Wilson Court lost water and until late Thursday had in effect a boil water advisory since lifted by W.Va. American Water.
“I talked to Jim Johnson at six o’clock . He seems to think actually folks over there will get a lot of sidewalks and infrastructure repaired and redone,” Bates said.
Enslow residents have a regularly scheduled community meeting set for Saturday, May 1 at 9:30 a.m.
At this time, the Huntington Sanitary Board is on record that the adjustments to the project will not increase the cost of the upgrade.
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