July 23, 2010
WORK SESSION: Huntington City Council Swings Toward Restoring a Cap on Occupation Tax Proposal
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – Hints of an intense lobbying effort for support of the occupation tax surfaced at the Thursday, July 22 work session of Huntington City Council. Chairman Jim Insco indicated that Monday night “amendments” are expected to the ordinance that would implement the occupation tax. One of them --- Restoration of the cap.
As proposed at the first meeting in July, the tax maxed out at $1,000 (i.e. anything earned over $100,000). Council voted to eliminate the cap.
However, many council members now fear that a non-limit on the maximum tax would discourage business ownership, so a movement has spread among council members supporting the tax to find a consensus for a cap.
Should the ordinance be substantially amended Monday, July 26, the vote on the city’s imposition of the tax would be forced to a third reading, both Council chairman Jim Insco and City Attorney Scott McClure said. The third reading --- unless a special meeting is called --- would then be at the first council meeting in August.
At the first reading the “cap” was removed. “You can so you can do that. If it’s substantially amended Monday, you’ll probably have to have a third reading. If the cap is put back in that a significant change,” McClure said.
Though modified from the proposal by the administration, Mayor Kim Wolfe supports working out a compromise version of the occupation tax and reform package.
The one percent tax under consideration has prompted statements of a “class war,” “political suicide” and “taxation without representation.” Despite opposition to the occupation tax concept, all council members and the administration appear unified in the concept of moving the city progressively forward. The question is how, and, more significantly, should it be through an occupation tax?
Expressing her still open mind through the vantage point of a resident , councilwoman Frances Jackson told council and the cable TV audience, “I’d like to [hear] from people in favor of the tax.”
Speaking after the work session from out-of-town to HNN, councilman Steve Williams agreed that “their silence has been deafening,” in reference to people working in and living inside the city. Separating his e-mail comments to only those living and working inside the city, Williams indicated that they were running about 50/50 with a lean in favor of the tax.
At neighborhood association meetings, residents living and working in the city have been attending, listening, and many have expressed support for the reform package.
Chairman Jim Insco spoke to the Westmoreland Neighborhood Association. Prior to that Councilman Jim Ritter seemed solidly against the tax. At the work session, he appeared leaning toward supporting the tax with an upper cap.
“I see it a little differently. My constituents are all for it, they see the need,” Ritter said.
Insco stated he has talked to three groups and with a sense of humor added, “I haven’t been hung at any of the three.”
The tax reform shifts the burden from business to individuals earning money within the city. The occupation tax is I.R.S. deductable. It does not include pensions, social security or stock dividend distributions.
TAXATION WITHOUT REPRESENTATION… NOT!
Councilman Nate Randolph addressed the so-called ‘taxation without representation’ arguments of residents working in the city but living elsewhere. “No one is placing anyone in bondage to visit or spend time here,” Randolph stated.
City Attorney Scott McClure stressed that council has the authority from the WV legislature to impose an occupation tax, not an income tax. Comparisons of non-residency status were made to a West Virginian attempting not to pay the Lawrence County or Ohio sales tax, or the Ashland, Ky. Occupation tax. Citizens working in Huntington and living outside the city have vehemently argued ‘taxation without representation.’ “The courts say that is simply not true,” McClure said.
McClure cited a case from 1897 that is “still good law” in researching the taxation without representation topic.
Under its overview, an attorney lived outside the city limits but practiced law in the city. The city imposed a tax for the privilege of practicing law in the city under Petersburg, Va., Ordinances § 12. The attorney claimed that because he paid the state a tax for practicing law he was entitled to practice law in any county or city of the state without paying additional tax. The Virginia Supreme Court ruled , the Legislature gave the city's council the power to raise money to defray expenses. The Legislature could authorize the city to impose taxes on persons whose professions were pursued within corporate limits even though they resided beyond those limits.
“He enjoys the advantages of carrying on his business in the practice of his profession in a thickly populated city, which offers many inducements as well as advantages, both in increased business facilities and comforts, not attainable in the county of his residence. He enjoys, habitually and daily, equally with the resident attorneys, the use of the city's improved streets and lights, and is equally protected by its police regulations in his person and property. He has, as they have, the benefit of the night watch to protect his office and his property therein, and the benefit of the fire department in case of fire .” City of Petersburg v. Cocke, 26 S.E. 576, 1897 Va. Lexis 69 (1897)
“It’s a good analysis and 113 years later it makes good sense,” McClure said.
VALUE OF SERVICES
Will the tax reform package help make the City of Huntington more attractive to non-residents? Will it offer an enticement for county residents to desire annexation into the city limits?
Williams called the annexation process complex as laid out by the state legislature. The reforms seek to put a price point value on city services at a level higher than $156 a year (the cost of the $3 a week user fee).
The services are illustrated by would you rather have crime ridden neighborhoods, or sufficient police officers to deter criminals? Would you rather have streets covered by pot holes or streets that are paved and fixed? Would you rather have persistent flooding after nearly every drenching or prevent the problem through storm sewer separation?
Obviously, those fearful of broken promises , yell , the streets are not yet paved this year; it’s been put off.
Williams indicated that the worst recession since the great depression cut into city revenues, forcing the paving commitment to be postponed until Spring.
Brandi Jacobs-Jones, director of Finance and Administration, echoed Williams stating at the work session, “We have to wait until the money is in the bank.”
Mayor Wolfe stressed, “They WILL get the paving.” Both Ms. Jacobs – Jones and he indicated that user fee expenditures are posted at: http://www.cityofhuntington.com/pages/pdfs/ServiceFeeMay2010.pdf
Delay of street paving, as well as furloughs, relate back to the severity of the recession which cut into B & O revenues (especially construction) and decreased user fee collections due to a dip in the number of employees in the city. As a firm preparatory and efficiency step to prevent further erosion (or postponement) in services, Williams at the Finance Committee meeting last week has proposed immediate freezes on hiring, non-essential purchases, and on not filling the positions of employees who retire. The viewpoint was supported by Nate Randolph at the committee meeting.
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WORK SESSION: Huntington City Council Swings Toward Restoring a Cap on Occupation Tax Proposal
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – Hints of an intense lobbying effort for support of the occupation tax surfaced at the Thursday, July 22 work session of Huntington City Council. Chairman Jim Insco indicated that Monday night “amendments” are expected to the ordinance that would implement the occupation tax. One of them --- Restoration of the cap.
As proposed at the first meeting in July, the tax maxed out at $1,000 (i.e. anything earned over $100,000). Council voted to eliminate the cap.
However, many council members now fear that a non-limit on the maximum tax would discourage business ownership, so a movement has spread among council members supporting the tax to find a consensus for a cap.
Should the ordinance be substantially amended Monday, July 26, the vote on the city’s imposition of the tax would be forced to a third reading, both Council chairman Jim Insco and City Attorney Scott McClure said. The third reading --- unless a special meeting is called --- would then be at the first council meeting in August.
At the first reading the “cap” was removed. “You can so you can do that. If it’s substantially amended Monday, you’ll probably have to have a third reading. If the cap is put back in that a significant change,” McClure said.
Though modified from the proposal by the administration, Mayor Kim Wolfe supports working out a compromise version of the occupation tax and reform package.
The one percent tax under consideration has prompted statements of a “class war,” “political suicide” and “taxation without representation.” Despite opposition to the occupation tax concept, all council members and the administration appear unified in the concept of moving the city progressively forward. The question is how, and, more significantly, should it be through an occupation tax?
Expressing her still open mind through the vantage point of a resident , councilwoman Frances Jackson told council and the cable TV audience, “I’d like to [hear] from people in favor of the tax.”
Speaking after the work session from out-of-town to HNN, councilman Steve Williams agreed that “their silence has been deafening,” in reference to people working in and living inside the city. Separating his e-mail comments to only those living and working inside the city, Williams indicated that they were running about 50/50 with a lean in favor of the tax.
At neighborhood association meetings, residents living and working in the city have been attending, listening, and many have expressed support for the reform package.
Chairman Jim Insco spoke to the Westmoreland Neighborhood Association. Prior to that Councilman Jim Ritter seemed solidly against the tax. At the work session, he appeared leaning toward supporting the tax with an upper cap.
“I see it a little differently. My constituents are all for it, they see the need,” Ritter said.
Insco stated he has talked to three groups and with a sense of humor added, “I haven’t been hung at any of the three.”
The tax reform shifts the burden from business to individuals earning money within the city. The occupation tax is I.R.S. deductable. It does not include pensions, social security or stock dividend distributions.
TAXATION WITHOUT REPRESENTATION… NOT!
Councilman Nate Randolph addressed the so-called ‘taxation without representation’ arguments of residents working in the city but living elsewhere. “No one is placing anyone in bondage to visit or spend time here,” Randolph stated.
City Attorney Scott McClure stressed that council has the authority from the WV legislature to impose an occupation tax, not an income tax. Comparisons of non-residency status were made to a West Virginian attempting not to pay the Lawrence County or Ohio sales tax, or the Ashland, Ky. Occupation tax. Citizens working in Huntington and living outside the city have vehemently argued ‘taxation without representation.’ “The courts say that is simply not true,” McClure said.
McClure cited a case from 1897 that is “still good law” in researching the taxation without representation topic.
Under its overview, an attorney lived outside the city limits but practiced law in the city. The city imposed a tax for the privilege of practicing law in the city under Petersburg, Va., Ordinances § 12. The attorney claimed that because he paid the state a tax for practicing law he was entitled to practice law in any county or city of the state without paying additional tax. The Virginia Supreme Court ruled , the Legislature gave the city's council the power to raise money to defray expenses. The Legislature could authorize the city to impose taxes on persons whose professions were pursued within corporate limits even though they resided beyond those limits.
“He enjoys the advantages of carrying on his business in the practice of his profession in a thickly populated city, which offers many inducements as well as advantages, both in increased business facilities and comforts, not attainable in the county of his residence. He enjoys, habitually and daily, equally with the resident attorneys, the use of the city's improved streets and lights, and is equally protected by its police regulations in his person and property. He has, as they have, the benefit of the night watch to protect his office and his property therein, and the benefit of the fire department in case of fire .” City of Petersburg v. Cocke, 26 S.E. 576, 1897 Va. Lexis 69 (1897)
“It’s a good analysis and 113 years later it makes good sense,” McClure said.
VALUE OF SERVICES
Will the tax reform package help make the City of Huntington more attractive to non-residents? Will it offer an enticement for county residents to desire annexation into the city limits?
Williams called the annexation process complex as laid out by the state legislature. The reforms seek to put a price point value on city services at a level higher than $156 a year (the cost of the $3 a week user fee).
The services are illustrated by would you rather have crime ridden neighborhoods, or sufficient police officers to deter criminals? Would you rather have streets covered by pot holes or streets that are paved and fixed? Would you rather have persistent flooding after nearly every drenching or prevent the problem through storm sewer separation?
Obviously, those fearful of broken promises , yell , the streets are not yet paved this year; it’s been put off.
Williams indicated that the worst recession since the great depression cut into city revenues, forcing the paving commitment to be postponed until Spring.
Brandi Jacobs-Jones, director of Finance and Administration, echoed Williams stating at the work session, “We have to wait until the money is in the bank.”
Mayor Wolfe stressed, “They WILL get the paving.” Both Ms. Jacobs – Jones and he indicated that user fee expenditures are posted at: http://www.cityofhuntington.com/pages/pdfs/ServiceFeeMay2010.pdf
Delay of street paving, as well as furloughs, relate back to the severity of the recession which cut into B & O revenues (especially construction) and decreased user fee collections due to a dip in the number of employees in the city. As a firm preparatory and efficiency step to prevent further erosion (or postponement) in services, Williams at the Finance Committee meeting last week has proposed immediate freezes on hiring, non-essential purchases, and on not filling the positions of employees who retire. The viewpoint was supported by Nate Randolph at the committee meeting.
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