May 19, 2010
Huntington Council Committee Brainstorms Revenue Options
Sales Tax Proposal to Receive Heightened Scrutiny; MU Accounting Professor Gives Thumbs Up
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – We love our city; it’s just a place to live and shop. We hate those pot holes every other block; I Could Tolerate Them Every Third Block and Buy a Used Tire. We want to show off cityscapes to out-of-town guests; They don’t care, I can live with graffiti.
Actually none of these specific balancing acts came up for discussion at the two hour plus meeting of Council’s Finance Committee. However, they represent choices on the table. Tuesday night, May 18, the options appeared to narrow --- the Occupation Tax versus a 1% “sales/use” tax.
Each could come with a set of variables. One option is off the table: Mayor Wolfe told HNN he would “absolutely veto” any increase in the current “user fee” as it represents a “regressive and unfair tax.” Previously, several members of city council expressed similar opposition. It’s mentioned only because a few citizens speaking at occupation tax hearings tossed a “user fee” increase on the table.
While the one-percent occupation tax may represent the most equitable and fair manner of raising city revenue, a vocal opposition --- many threatening boycotts of city businesses --- have council members skittish on the proposal.
Councilman Nate Randolph stressed that business growth within the City of Huntington (through employment increases, for instance) will provide a vibrant community. “If we do nothing, we continue to bleed,” which is what the city has been doing. “We need to move the [tax] burden,” which he translated by demonstrating that Huntington residents county taxes are eight to one in comparison to the contributions from Barboursville, Ona and Milton.
Although a re-worked occupation tax package was placed on the floor, committee members wanted in Randolph’s words to see more “sharpened numbers,” on a one percent city sales/use tax proposal.
“Have we fully studied the 1% sales tax,” council vice chairman Mark Bates inquired?
Council woman Teresa Loudermilk noted that she routinely shops in Ohio, despite the sales taxes being higher than in West Virginia. Relating interactions with fellow employees at a Huntington health care facility, she repeated their collective thought that “by the time I pay everything [else in taxes], then, I pay a one percent occupation tax,” they would “refuse to walk anywhere within Huntington” for entertainment and/or discretionary spending.
By not eliminating the user fee, a one percent sale tax would with the user fee generate a projected $8.2 million dollars in revenue. That would cover the shortfalls.
“Maybe, it is a little bit better, where citizens will not be as aggressive” in opposition, Loudermilk conjectured.
City Attorney Scott McClure indicated he would confirm prior to the Friday work session that there is no mandatory removal of the user (service) fee, if a sales tax is imposed.
Calling Runyon a “wizard of charts,” Finance Committee chairman Steve Williams --- who still favors the occupation tax reform --- asked that sales tax projections include a $1.00 (per week) cut in the user/service fee.
Based on rough figures the sales tax would bring about $3.7 million dollars in revenue and the $3.00 per week user fee add $4.5 million dollars. A $1.00 reduction would amount to about $1.5 million dollars annually.
MU ACCOUNTING PROFESSOR FAVORS SALES TAX
Marshall University Assistant Chairman of Accountancy & Legal Environment, Maurice Lockridge, told HNN during a recess in the Finance Committee meeting that “any attempt to restructure the entire tax system is a mistake. All of these taxes are dynamic, not static, they depend upon each other. The only way to do this without catastrophic results is to do this one at a time. For example, an occupation tax will eliminate all B & O taxes that hundreds of other people generate (by purchasing within the city). B & O will go down with no rate reduction if they implement an occupation tax. The answer is quite simple --- a sales tax.”
Lockridge explained that rather than have the tax forcibly withheld (i.e. occupation tax), “people choose to pay it [and] it is incremental in each small transaction.” Furthermore, the man who vowed to spend funds outside of the city limits if an occupation tax was passed firmly stated, “I’m not going to Barboursville to buy a loaf of bread because it is one penny cheaper.”
WOLFE FAVORS SALES TAX ONLY IF COUNTY WIDE
However, Mayor Wolfe still champions the occupation tax as the fairest: “You make a little more, you pay a little more,” he said following the Finance Committee meeting. He disagreed with the sales tax, unless it is imposed countywide.
“If we put an additional tax on business, that’s not tax reform for business,” the Mayor said. “If the tax were county wide and returned back to our city [like the state sales tax], then, it’s a different story. [Otherwise], outside the city, the same business does not have that tax.”
As to the threats of numerous employees within the city to spend money elsewhere if a one percent occupation tax passed, Wolfe recalled the same arguments were made when Ashland, Ky. Introduced its occupation tax.
“Business did not move, by contrast, businesses grew. It’s a shared investment in your city [and] much fairer than a user fee or an additional burden on businesses,” Wolfe said.
But the ball is not now in his court.
“Council has it now; I can voice my opinion, but they will ultimately make the decision,” the Mayor said.
Share This Story:
Make HNN Your Homepage (IE Users Only)
Huntington Council Committee Brainstorms Revenue Options
Sales Tax Proposal to Receive Heightened Scrutiny; MU Accounting Professor Gives Thumbs Up
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – We love our city; it’s just a place to live and shop. We hate those pot holes every other block; I Could Tolerate Them Every Third Block and Buy a Used Tire. We want to show off cityscapes to out-of-town guests; They don’t care, I can live with graffiti.
Actually none of these specific balancing acts came up for discussion at the two hour plus meeting of Council’s Finance Committee. However, they represent choices on the table. Tuesday night, May 18, the options appeared to narrow --- the Occupation Tax versus a 1% “sales/use” tax.
Each could come with a set of variables. One option is off the table: Mayor Wolfe told HNN he would “absolutely veto” any increase in the current “user fee” as it represents a “regressive and unfair tax.” Previously, several members of city council expressed similar opposition. It’s mentioned only because a few citizens speaking at occupation tax hearings tossed a “user fee” increase on the table.
While the one-percent occupation tax may represent the most equitable and fair manner of raising city revenue, a vocal opposition --- many threatening boycotts of city businesses --- have council members skittish on the proposal.
Councilman Nate Randolph stressed that business growth within the City of Huntington (through employment increases, for instance) will provide a vibrant community. “If we do nothing, we continue to bleed,” which is what the city has been doing. “We need to move the [tax] burden,” which he translated by demonstrating that Huntington residents county taxes are eight to one in comparison to the contributions from Barboursville, Ona and Milton.
Although a re-worked occupation tax package was placed on the floor, committee members wanted in Randolph’s words to see more “sharpened numbers,” on a one percent city sales/use tax proposal.
“Have we fully studied the 1% sales tax,” council vice chairman Mark Bates inquired?
Council woman Teresa Loudermilk noted that she routinely shops in Ohio, despite the sales taxes being higher than in West Virginia. Relating interactions with fellow employees at a Huntington health care facility, she repeated their collective thought that “by the time I pay everything [else in taxes], then, I pay a one percent occupation tax,” they would “refuse to walk anywhere within Huntington” for entertainment and/or discretionary spending.
By not eliminating the user fee, a one percent sale tax would with the user fee generate a projected $8.2 million dollars in revenue. That would cover the shortfalls.
“Maybe, it is a little bit better, where citizens will not be as aggressive” in opposition, Loudermilk conjectured.
City Attorney Scott McClure indicated he would confirm prior to the Friday work session that there is no mandatory removal of the user (service) fee, if a sales tax is imposed.
Calling Runyon a “wizard of charts,” Finance Committee chairman Steve Williams --- who still favors the occupation tax reform --- asked that sales tax projections include a $1.00 (per week) cut in the user/service fee.
Based on rough figures the sales tax would bring about $3.7 million dollars in revenue and the $3.00 per week user fee add $4.5 million dollars. A $1.00 reduction would amount to about $1.5 million dollars annually.
MU ACCOUNTING PROFESSOR FAVORS SALES TAX
Marshall University Assistant Chairman of Accountancy & Legal Environment, Maurice Lockridge, told HNN during a recess in the Finance Committee meeting that “any attempt to restructure the entire tax system is a mistake. All of these taxes are dynamic, not static, they depend upon each other. The only way to do this without catastrophic results is to do this one at a time. For example, an occupation tax will eliminate all B & O taxes that hundreds of other people generate (by purchasing within the city). B & O will go down with no rate reduction if they implement an occupation tax. The answer is quite simple --- a sales tax.”
Lockridge explained that rather than have the tax forcibly withheld (i.e. occupation tax), “people choose to pay it [and] it is incremental in each small transaction.” Furthermore, the man who vowed to spend funds outside of the city limits if an occupation tax was passed firmly stated, “I’m not going to Barboursville to buy a loaf of bread because it is one penny cheaper.”
WOLFE FAVORS SALES TAX ONLY IF COUNTY WIDE
However, Mayor Wolfe still champions the occupation tax as the fairest: “You make a little more, you pay a little more,” he said following the Finance Committee meeting. He disagreed with the sales tax, unless it is imposed countywide.
“If we put an additional tax on business, that’s not tax reform for business,” the Mayor said. “If the tax were county wide and returned back to our city [like the state sales tax], then, it’s a different story. [Otherwise], outside the city, the same business does not have that tax.”
As to the threats of numerous employees within the city to spend money elsewhere if a one percent occupation tax passed, Wolfe recalled the same arguments were made when Ashland, Ky. Introduced its occupation tax.
“Business did not move, by contrast, businesses grew. It’s a shared investment in your city [and] much fairer than a user fee or an additional burden on businesses,” Wolfe said.
But the ball is not now in his court.
“Council has it now; I can voice my opinion, but they will ultimately make the decision,” the Mayor said.
Share This Story:
Make HNN Your Homepage (IE Users Only)
