May 1, 2010
Huntington Council Finance Committee Recommends Withdrawal of Occupation Tax
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – Call it an example of democracy at work or of listening to the most outspoken members of the community, but on Friday afternoon, April 30, the Finance Committee voted to recommend withdrawal of the occupation tax… for now.
The Finance Committee of Huntington City Council, chaired by Steve Williams, has voted 5-0 to recommend withdrawal of the occupation proposal as presented. However, the Committee will continue working on revenue generating proposals to at least stave off the furloughs called for in the fiscal 2010-2011 budget.
Coupled with the 5-0 finance committee withdrawal vote recommendation of the occupation tax proposal as drafted, council members Scott Caserta and Rebecca Thacker (who were not at the Friday meeting) had voted Monday, April 26 to table the ordinance and expressed their opposition. The Finance Committee includes Williams, Nate Randolph, Jim Ritter, Sandra Clements and Teresa Loudermilk.
Council vice chairman Mark Bates had told HNN Thursday, April 29, that he could not support the proposal as drafted. Councilman Russ Houck told the Herald Dispatch he favored the withdrawal, too. Assuming no one changes their mind, the proposal has the vote of at least nine council members.
Councilwoman Frances Jackson has been ill and did not attend the Finance Committee meeting, but had expressed strong doubts of supporting the tax as proposed. “I do not see a win/win as far as impacting lives with this vote,” she told HNN April 21.
Council chairman James Incso did not attend due to the death of his stepfather. Insco told HNN Sunday, April 25, that he had not made up his mind on the proposal, but leaned in favor of a comprehensive reform package. Most of his emails and feedback had been negative toward the occupation tax proposal.
START FROM SCRATCH
Referring to a morning radio program, councilman Nate Randolph said, it would be better to “start from scratch” on the tax reform plans, rather than work with “wholesale” changes to the draft proposal. “Perhaps, something comprehensive that creates employment and prosperity,” Randolph stated during the committee session.
Sandra Clements, who initiated a motion that allowed public comment at the afternoon meeting, stated “this issue is how much we have to pay so it is fair to everybody.”
Finance Committee Chairman, Steve Williams, stated after the meeting that the proposals made during the occupation tax hearing process will all be placed on the table for discussion. “I’ve heard proposals I did not expect to hear,” Williams said, adding “I want to lay out the sales tax [idea],” which is another of the home rule options.
Several public speakers had indicated a willingness to entertain a user fee increase to $4 or even $5 per week. Williams indicated it will be put into the mix of proposals. “I don’t think it would pass,” he firmly stated.
The current across the board $3 a week city user (service) fee brings in about $4.5 million dollars annually. Although it places an inequitable burden on lower earning minimum wage workers, a $1.00 increase would generate based on past projections, another $1.5 million dollars.
However, the user fee has been regarded as a temporary band-aid, rather than a permanent fix for the city’s financial woes. “Eventually, we are going to have to take off the band aid,” Williams said.
Prior to the Finance Committee meeting, members of Local 37 of the United Steelworkers of America demonstrated in front of Huntington City Hall.
Tim Duke, CEO of Steel of West Virginia, joined the workers on the picket line. His company had ran an ad in the morning newspaper expressing opposition to the tax. The ad included the phone numbers and e-mails of all council members. Some council members had their phones start ringing at 7 a.m. Friday.
“This sends an unattractive message if the city is trying to keep jobs,” Duke said, adding that his company supports the Chamber of Commerce’s recommendation to hire an independent consultant to look at alternatives to this “oppressive” tax.
Duke explained that during the deep recession nearly half of the company’s 425 employees had been laid off. He stressed the tax would be a “significant” burden to his workers.
As for the city’s financial status, he suggested that it be run more like a for profit business, which would mean making deep cuts when revenue falls and prioritizing services.
WOLFE ADMINISTRATION
Council had asked that the Mayor’s administration take the lead and make the initial proposal. Williams has stressed that council compares with the state legislature and is a deliberative body. The draft occupation tax proposal drawn up for the administration by city attorney Scott McClure with input from Fred Williams, a bond and tax attorney, from Steptoe & Johnson.
It would have imposed a one percent tax on gross earnings by wage earners within the city limits. Money received from disability benefits, retirement, or workmen’s compensation would have been excluded, along with anyone earning less than $10,000 a year. However, the $100 would have still be withheld from pay checks; the employee would have had to apply for a refund annually demonstrating that their total income was less than $10,000.
Mayor Wolfe, who had previously stated that he was “comfortable” with the on-going hearing process and apparent impending amendments, told the committee, “ I feel confident we will be able to work through a compromise that is a vision of tax reform. We are headed in the right direction. None of us want to see [the city] stagnant.”
PUBLIC INPUT
Since a committee meeting of council resembles a legislative committee --- public comments are not normally allowed when the committee moves into deliberations prior to a vote.
However, activist Tom McCallister insisted that he had an important statement which should be made prior to a vote. Although Williams sparred with Tom about the procedure, Williams thoughtfully stepped back and put a question to the committee : Should the rules be waived and Tom be allowed to speak? If so, then, anyone else in the audience must also have an opportunity, too.
Ms. Clements started the motion to allow public comment.
McCallister respectfully inquired about a question pertaining to the history of the home rule pilot program legislative authority selection process. He recalled that Morgantown initially wanted to gain authority to impose an occupation tax. However, an attorney from Steptoe & Johnson had rendered an advisory opinion that the program was unconstitutional.
Thus, the obvious occurred --- how could one attorney from a firm tell Morgantown not to participate on unconstitutional grounds and an attorney for the same large firm assist Huntington in drafting its ordinance?
Brandi Jacobs-Jones, director of administration and finance, stepped to the podium. Ms. Jones recalled that AFTER the initial opinion, Morgantown reconsidered. They sought in , her words, to “reopen” pilot program applications so they could apply. “They realized they had missed an opportunity,” she explained.
Williams, himself a former legislator and city manager, advised, “We can only work with the tools place in our belt by the legislature.” He noted that a court challenge would be an expected strategy.
Following relatively brief speeches by those opposing, the two final speakers appeared to read the handwriting on the wall --- the upcoming committee vote would be to withdraw.
One man stated , “I don’t receive any city services” because I live outside the city, but “I don’t want to see anybody furloughed or laid off.”
Mark Erwin, apparently recognizing the sincerity of the committee, then stated, “whatever you do, just make it fair across the board,” implying that the burden should be fairly spread on middle, upper and by conjecture , lower incomes alike.
WHAT NEXT?
The budget passed by council calls for $869,000 in “unspecified cuts,” which could result in the layoff of eight to ten employees. Council has already exempted the police and fire departments from layoffs. The Sanitation Department is not part of the ‘general fund’ budget and operates as a separate entity under an enterprise fund. Thus, they are not included in the reductions.
Randolph has stated that saving jobs or preventing furloughs which are reality for the private sector and other cities across the country, especially during the deep recession. However, Williams stated, “I”d allow the unspecified cuts to happen. I feel we have to eliminate the furloughs.”
Finance Director Deron Runyon confirmed that $325,000 in revenue would be needed to eliminate furloughs.
While the police and fire departments have been exempted from furloughs and layoffs, they have been targeted with the reduction of $180,000 in overtime costs.
After the unanimous vote, an emotional gorilla seemed lifted, even if temporarily. Many of those attending the meeting from Local 37 and other citizens quietly filed out of council chambers, but the meeting continued for at least another hour or more.
The committee discussed proposed ordinances to eliminate the business and occupation tax on manufacturing, as well as, certain levels of proposed reductions on service businesses and on retail. B & O taxes have been described by many business leaders as the most business unfriendly as they tax gross revenue, not net profit.
In addition, Runyon had prepared and reviewed a spread sheet which compared and contrasted revenue by “tweaking” various fees and/or taxes to account for possible adjustment proposals.
Members of the finance committee praised Runyon for his work, which clearly exceeded expectations, but delivered user friendly comparisons. The number crunching projections allowed council members to see how a variety of spoken about would-be amendments i.e. capping the tax, phasing the tax in, reducing municipal service fee square footage rates, taxing non-resident workers at a rate 50% less than residents, etc.
ADJOURNMENT… HARDLY
Although the gavel signaled adjournment, chambers did not quickly clear of all but reporters and a council member or two. Instead, council members, the finance director, the mayor, city attorney, and reporters freely conversed. Some of the conversations were one-on-one, others were in a group.
Interestingly, after the chambers cleared, one set of steps of Huntington City Hall had council members, reporters and administration still posing hypothetical questions. The gorilla was gone for the moment, but his claws still hang a few inches from everyone’s necks. The finance director and Williams had previously stressed the sooner the better. Whatever the decision will or will not be, it /they need to be determined expeditiously whether from an employer’s perspective or an employee’s perspective.
MAY 10
The withdrawal recommendation will come up at the May 10, 2010 meeting of City Council, which normally holds its work session on Friday, May 7. Williams did not pre-schedule the next meeting of the Finance Committee, explaining that he had to get back to his full time job and would be out of town Tuesday through Thursday of next week.
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Huntington Council Finance Committee Recommends Withdrawal of Occupation Tax
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – Call it an example of democracy at work or of listening to the most outspoken members of the community, but on Friday afternoon, April 30, the Finance Committee voted to recommend withdrawal of the occupation tax… for now.
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Coupled with the 5-0 finance committee withdrawal vote recommendation of the occupation tax proposal as drafted, council members Scott Caserta and Rebecca Thacker (who were not at the Friday meeting) had voted Monday, April 26 to table the ordinance and expressed their opposition. The Finance Committee includes Williams, Nate Randolph, Jim Ritter, Sandra Clements and Teresa Loudermilk.
Council vice chairman Mark Bates had told HNN Thursday, April 29, that he could not support the proposal as drafted. Councilman Russ Houck told the Herald Dispatch he favored the withdrawal, too. Assuming no one changes their mind, the proposal has the vote of at least nine council members.
Councilwoman Frances Jackson has been ill and did not attend the Finance Committee meeting, but had expressed strong doubts of supporting the tax as proposed. “I do not see a win/win as far as impacting lives with this vote,” she told HNN April 21.
Council chairman James Incso did not attend due to the death of his stepfather. Insco told HNN Sunday, April 25, that he had not made up his mind on the proposal, but leaned in favor of a comprehensive reform package. Most of his emails and feedback had been negative toward the occupation tax proposal.
START FROM SCRATCH
Referring to a morning radio program, councilman Nate Randolph said, it would be better to “start from scratch” on the tax reform plans, rather than work with “wholesale” changes to the draft proposal. “Perhaps, something comprehensive that creates employment and prosperity,” Randolph stated during the committee session.
Sandra Clements, who initiated a motion that allowed public comment at the afternoon meeting, stated “this issue is how much we have to pay so it is fair to everybody.”
Finance Committee Chairman, Steve Williams, stated after the meeting that the proposals made during the occupation tax hearing process will all be placed on the table for discussion. “I’ve heard proposals I did not expect to hear,” Williams said, adding “I want to lay out the sales tax [idea],” which is another of the home rule options.
Several public speakers had indicated a willingness to entertain a user fee increase to $4 or even $5 per week. Williams indicated it will be put into the mix of proposals. “I don’t think it would pass,” he firmly stated.
The current across the board $3 a week city user (service) fee brings in about $4.5 million dollars annually. Although it places an inequitable burden on lower earning minimum wage workers, a $1.00 increase would generate based on past projections, another $1.5 million dollars.
However, the user fee has been regarded as a temporary band-aid, rather than a permanent fix for the city’s financial woes. “Eventually, we are going to have to take off the band aid,” Williams said.
Prior to the Finance Committee meeting, members of Local 37 of the United Steelworkers of America demonstrated in front of Huntington City Hall.
Tim Duke, CEO of Steel of West Virginia, joined the workers on the picket line. His company had ran an ad in the morning newspaper expressing opposition to the tax. The ad included the phone numbers and e-mails of all council members. Some council members had their phones start ringing at 7 a.m. Friday.
“This sends an unattractive message if the city is trying to keep jobs,” Duke said, adding that his company supports the Chamber of Commerce’s recommendation to hire an independent consultant to look at alternatives to this “oppressive” tax.
Duke explained that during the deep recession nearly half of the company’s 425 employees had been laid off. He stressed the tax would be a “significant” burden to his workers.
As for the city’s financial status, he suggested that it be run more like a for profit business, which would mean making deep cuts when revenue falls and prioritizing services.
WOLFE ADMINISTRATION
Council had asked that the Mayor’s administration take the lead and make the initial proposal. Williams has stressed that council compares with the state legislature and is a deliberative body. The draft occupation tax proposal drawn up for the administration by city attorney Scott McClure with input from Fred Williams, a bond and tax attorney, from Steptoe & Johnson.
It would have imposed a one percent tax on gross earnings by wage earners within the city limits. Money received from disability benefits, retirement, or workmen’s compensation would have been excluded, along with anyone earning less than $10,000 a year. However, the $100 would have still be withheld from pay checks; the employee would have had to apply for a refund annually demonstrating that their total income was less than $10,000.
Mayor Wolfe, who had previously stated that he was “comfortable” with the on-going hearing process and apparent impending amendments, told the committee, “ I feel confident we will be able to work through a compromise that is a vision of tax reform. We are headed in the right direction. None of us want to see [the city] stagnant.”
PUBLIC INPUT
Since a committee meeting of council resembles a legislative committee --- public comments are not normally allowed when the committee moves into deliberations prior to a vote.
However, activist Tom McCallister insisted that he had an important statement which should be made prior to a vote. Although Williams sparred with Tom about the procedure, Williams thoughtfully stepped back and put a question to the committee : Should the rules be waived and Tom be allowed to speak? If so, then, anyone else in the audience must also have an opportunity, too.
Ms. Clements started the motion to allow public comment.
McCallister respectfully inquired about a question pertaining to the history of the home rule pilot program legislative authority selection process. He recalled that Morgantown initially wanted to gain authority to impose an occupation tax. However, an attorney from Steptoe & Johnson had rendered an advisory opinion that the program was unconstitutional.
Thus, the obvious occurred --- how could one attorney from a firm tell Morgantown not to participate on unconstitutional grounds and an attorney for the same large firm assist Huntington in drafting its ordinance?
Brandi Jacobs-Jones, director of administration and finance, stepped to the podium. Ms. Jones recalled that AFTER the initial opinion, Morgantown reconsidered. They sought in , her words, to “reopen” pilot program applications so they could apply. “They realized they had missed an opportunity,” she explained.
Williams, himself a former legislator and city manager, advised, “We can only work with the tools place in our belt by the legislature.” He noted that a court challenge would be an expected strategy.
Following relatively brief speeches by those opposing, the two final speakers appeared to read the handwriting on the wall --- the upcoming committee vote would be to withdraw.
One man stated , “I don’t receive any city services” because I live outside the city, but “I don’t want to see anybody furloughed or laid off.”
Mark Erwin, apparently recognizing the sincerity of the committee, then stated, “whatever you do, just make it fair across the board,” implying that the burden should be fairly spread on middle, upper and by conjecture , lower incomes alike.
WHAT NEXT?
The budget passed by council calls for $869,000 in “unspecified cuts,” which could result in the layoff of eight to ten employees. Council has already exempted the police and fire departments from layoffs. The Sanitation Department is not part of the ‘general fund’ budget and operates as a separate entity under an enterprise fund. Thus, they are not included in the reductions.
Randolph has stated that saving jobs or preventing furloughs which are reality for the private sector and other cities across the country, especially during the deep recession. However, Williams stated, “I”d allow the unspecified cuts to happen. I feel we have to eliminate the furloughs.”
Finance Director Deron Runyon confirmed that $325,000 in revenue would be needed to eliminate furloughs.
While the police and fire departments have been exempted from furloughs and layoffs, they have been targeted with the reduction of $180,000 in overtime costs.
After the unanimous vote, an emotional gorilla seemed lifted, even if temporarily. Many of those attending the meeting from Local 37 and other citizens quietly filed out of council chambers, but the meeting continued for at least another hour or more.
The committee discussed proposed ordinances to eliminate the business and occupation tax on manufacturing, as well as, certain levels of proposed reductions on service businesses and on retail. B & O taxes have been described by many business leaders as the most business unfriendly as they tax gross revenue, not net profit.
In addition, Runyon had prepared and reviewed a spread sheet which compared and contrasted revenue by “tweaking” various fees and/or taxes to account for possible adjustment proposals.
Members of the finance committee praised Runyon for his work, which clearly exceeded expectations, but delivered user friendly comparisons. The number crunching projections allowed council members to see how a variety of spoken about would-be amendments i.e. capping the tax, phasing the tax in, reducing municipal service fee square footage rates, taxing non-resident workers at a rate 50% less than residents, etc.
ADJOURNMENT… HARDLY
Although the gavel signaled adjournment, chambers did not quickly clear of all but reporters and a council member or two. Instead, council members, the finance director, the mayor, city attorney, and reporters freely conversed. Some of the conversations were one-on-one, others were in a group.
Interestingly, after the chambers cleared, one set of steps of Huntington City Hall had council members, reporters and administration still posing hypothetical questions. The gorilla was gone for the moment, but his claws still hang a few inches from everyone’s necks. The finance director and Williams had previously stressed the sooner the better. Whatever the decision will or will not be, it /they need to be determined expeditiously whether from an employer’s perspective or an employee’s perspective.
MAY 10
The withdrawal recommendation will come up at the May 10, 2010 meeting of City Council, which normally holds its work session on Friday, May 7. Williams did not pre-schedule the next meeting of the Finance Committee, explaining that he had to get back to his full time job and would be out of town Tuesday through Thursday of next week.
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