Aug. 10, 2010
Huntington Council Passes Occupation Tax 7-4 Ignoring Public Opposition
Litigation, Recall Petitions Threatened
By Tony Rutherford
Huntingtonnews.net Reporter
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Huntington, WV (HNN) – Monday’s hottest ticket in town happened to be the Huntington City Council meeting. As cars honked and protestors held signs on Fifth Avenue, the chamber itself had 80% of its seating capacity filled by 7 p.m. --- a half hour before the meeting that would include the vote on the Tax Reform package.
After calling the meeting to order, the second reading of the occupation tax occurred with a silent council. The floor was immediately open for public comment.
Retorting a statement made that the pension and health care gorillas were “sins of the past,” Glenn Freeman , a 10th Avenue resident, stated “the city will suffer from the sin today (of passing the occupation tax). “
One audience member compared the passage to the mistakes made in 1970 allowing the Huntington Mall to be constructed in Barboursville.
Cabell County Commissioner Scott Bias told council that he had “fielded” phone calls from people in the county and Huntington.
“The bulk of people are opposed,” Bias stated calling it “discriminatory” and having a perception of inequity. Under the ordinance people are taxed one percent of the amount they earn within the city limits, which will create situations where one resident pays the tax and one next door does not. In addition, the tax contains exemptions for pensions, disability and public assistance.
“I implore you to go back and rethink this. It’s a payroll tax on the back of the working class,” Bias said.
Rev. Jasper Black favored the tax without the upper earning cap. (The most that any one individual can pay is $1,250 based on a salary of $125,000 annually.) “We need money in this city. It’s not about me, it’s about leaving things better for our children [and] making Huntington the type of city that people want to move to instead of move away.”
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But, Tim Duke, president of Steel of West Virginia, called it a “money grab” in order to sustain the city’s legacy costs. Duke explained that Steel of West Virginia survived because it did not have extensive and expensive pensions on its back. Duke explained the city should first do a review of spending and examine the amount of personnel cuts necessary.
One man told council that the firm he works for does not have a pension system; he told council he would consider coming down and applying for a job with the City of Huntington.
Dr. Maurice Lockridge, an assistant professor in the Lewis College of Business with a resume that includes work at a Fortune 100 company, caught council by surprise asking, “ Why did LeBron. James leave Cleveland?” The audience knew, but no one on council volunteered an answer.
“Cleveland has lost the best basketball player due to its municipal income tax,” Dr. Lockridge stressed. Then, he told council that the state and county are responsible for most of the major thoroughfares, like Route 10. “When I come in on Rt. 10 , you don’t do anything for me. You’re like a school yard bully. You’re big enough to do it , so you’re going to. But every school yard bully get his day. When the state takes away this [home rule] power two years from now, I’m not coming back [to shop in Huntington], even if you stop stealing my money.”
A few residents complained that the various increases in user fees and other items had over the last nine years failed to earn the “trust” of residents. “Where will the money be going, no one knows,” stated Lorenzo Jones.
However, the City has posted user fee expenses and revenue as promised.
Support from the Southside Neighborhood Association triggered audience rumblings. This put co-chairman Mark Bates slightly on the defensive as a representative of a higher income council district. He told a constituent that his responses ran about 60% yes, 30% no, and 10% undecided, excluding 100 in opposition who did not live in the city.
Before the vote, activist Tom McCalister took his last stab at what by now seemed a foregone conclusion. He reminded council, “Where does it say the legislature can amend the Constitution? These people talking can only do that [by voting].”
The Occupation Tax passed 7-4 ( Caserta, Jackson, Loudermilk, and Thacker voted no.)
SALES TAX
The second component of the reform --- the one percent sales tax ---did not generate passions.
Dr. Lockridge said, “I’m not going to Barboursville to buy a loaf of Bread for $1.00 rather than $1.01,” but (referring to the occupation tax) he scolded, “You are not treating me fairly.”
The municipal sales tax was not originally a component of the home rule proposal. Chairman Insco explained that Huntington is asking the state home rule board for permission to include the sales tax in the reform package which spreads the tax burden on more individuals and less on business by eliminating Business & Occupation taxes on manufacturing and reducing them on sales and retail.
Councilman Nate Randolph explained this would mean a savings of about $3.7 million for Huntington businesses. Randolph ventured into a portion of the importance of reducing and/or eliminating the B & O tax which is levied on business gross, not profits.
He noted that five percent of the people “take out small business loans” and their entrepreneurial spirit creates jobs that employ the other 95%.
Huntington will have “half the B & O rate of Barboursville,” adding that he hopes this brings lots of positive results in “filling up buildings downtown.”
The sales tax passed 10-1 (Thacker cast the no vote).
McCalister called this “another death knell” for the city.
Finance Committee Chairman Steve Williams who had been quiet on the two ordinances spoke passionately in favor of the repeals and reduction of the B & O taxes on business.
Calling this vote “the most significant I have ever cast,” he repeated that businessmen in Huntington have continually blasted the tax as a reason for not doing business in the city limits.
Williams then admitted “I would have rather not cast a vote for the other two ,” but explained that the sales and occupation taxes were the only “tools on our belt” given us by the legislature to remove the regressive B & O tax. In fact, he challenged the legislature to provide the city other opportunities to remove the B & O , like the state has already done.
Expressing his vision, Williams beamed that releasing this gorilla will provide the opportunity for Huntington to grow and prosper and become a city where the streets are paved, the crime is down, and higher paying jobs come by “creating an entrepreneurial society.”
The removal and reduction of fees component passed without opposition.
IT’S NOT OVER
Although the ordinances have passed, the city must now hold two hearings on amendments to the Home Rule plan. Originally, the city’s proposal did not include a sales tax and the occupation tax proposal was to be revenue neutral. Council must pass the amended Home Rule plan, which must then receive a thumbs up from the state home rule board.
In addition, litigation concerning the constitutionality of the Home Rule authority itself is expected. Others are planning a petition to put the occupation tax on the ballot. After the meeting, city attorney Scott McClure opined that the home rule authority did not operate in the same manner as a recall vote.
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Huntington Council Passes Occupation Tax 7-4 Ignoring Public Opposition
Litigation, Recall Petitions Threatened
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – Monday’s hottest ticket in town happened to be the Huntington City Council meeting. As cars honked and protestors held signs on Fifth Avenue, the chamber itself had 80% of its seating capacity filled by 7 p.m. --- a half hour before the meeting that would include the vote on the Tax Reform package.
After calling the meeting to order, the second reading of the occupation tax occurred with a silent council. The floor was immediately open for public comment.
Retorting a statement made that the pension and health care gorillas were “sins of the past,” Glenn Freeman , a 10th Avenue resident, stated “the city will suffer from the sin today (of passing the occupation tax). “
One audience member compared the passage to the mistakes made in 1970 allowing the Huntington Mall to be constructed in Barboursville.
Cabell County Commissioner Scott Bias told council that he had “fielded” phone calls from people in the county and Huntington.
“The bulk of people are opposed,” Bias stated calling it “discriminatory” and having a perception of inequity. Under the ordinance people are taxed one percent of the amount they earn within the city limits, which will create situations where one resident pays the tax and one next door does not. In addition, the tax contains exemptions for pensions, disability and public assistance.
“I implore you to go back and rethink this. It’s a payroll tax on the back of the working class,” Bias said.
Rev. Jasper Black favored the tax without the upper earning cap. (The most that any one individual can pay is $1,250 based on a salary of $125,000 annually.) “We need money in this city. It’s not about me, it’s about leaving things better for our children [and] making Huntington the type of city that people want to move to instead of move away.”
But, Tim Duke, president of Steel of West Virginia, called it a “money grab” in order to sustain the city’s legacy costs. Duke explained that Steel of West Virginia survived because it did not have extensive and expensive pensions on its back. Duke explained the city should first do a review of spending and examine the amount of personnel cuts necessary.
One man told council that the firm he works for does not have a pension system; he told council he would consider coming down and applying for a job with the City of Huntington.
Dr. Maurice Lockridge, an assistant professor in the Lewis College of Business with a resume that includes work at a Fortune 100 company, caught council by surprise asking, “ Why did LeBron. James leave Cleveland?” The audience knew, but no one on council volunteered an answer.
“Cleveland has lost the best basketball player due to its municipal income tax,” Dr. Lockridge stressed. Then, he told council that the state and county are responsible for most of the major thoroughfares, like Route 10. “When I come in on Rt. 10 , you don’t do anything for me. You’re like a school yard bully. You’re big enough to do it , so you’re going to. But every school yard bully get his day. When the state takes away this [home rule] power two years from now, I’m not coming back [to shop in Huntington], even if you stop stealing my money.”
A few residents complained that the various increases in user fees and other items had over the last nine years failed to earn the “trust” of residents. “Where will the money be going, no one knows,” stated Lorenzo Jones.
However, the City has posted user fee expenses and revenue as promised.
Support from the Southside Neighborhood Association triggered audience rumblings. This put co-chairman Mark Bates slightly on the defensive as a representative of a higher income council district. He told a constituent that his responses ran about 60% yes, 30% no, and 10% undecided, excluding 100 in opposition who did not live in the city.
Before the vote, activist Tom McCalister took his last stab at what by now seemed a foregone conclusion. He reminded council, “Where does it say the legislature can amend the Constitution? These people talking can only do that [by voting].”
The Occupation Tax passed 7-4 ( Caserta, Jackson, Loudermilk, and Thacker voted no.)
SALES TAX
The second component of the reform --- the one percent sales tax ---did not generate passions.
Dr. Lockridge said, “I’m not going to Barboursville to buy a loaf of Bread for $1.00 rather than $1.01,” but (referring to the occupation tax) he scolded, “You are not treating me fairly.”
The municipal sales tax was not originally a component of the home rule proposal. Chairman Insco explained that Huntington is asking the state home rule board for permission to include the sales tax in the reform package which spreads the tax burden on more individuals and less on business by eliminating Business & Occupation taxes on manufacturing and reducing them on sales and retail.
Councilman Nate Randolph explained this would mean a savings of about $3.7 million for Huntington businesses. Randolph ventured into a portion of the importance of reducing and/or eliminating the B & O tax which is levied on business gross, not profits.
He noted that five percent of the people “take out small business loans” and their entrepreneurial spirit creates jobs that employ the other 95%.
Huntington will have “half the B & O rate of Barboursville,” adding that he hopes this brings lots of positive results in “filling up buildings downtown.”
The sales tax passed 10-1 (Thacker cast the no vote).
McCalister called this “another death knell” for the city.
Finance Committee Chairman Steve Williams who had been quiet on the two ordinances spoke passionately in favor of the repeals and reduction of the B & O taxes on business.
Calling this vote “the most significant I have ever cast,” he repeated that businessmen in Huntington have continually blasted the tax as a reason for not doing business in the city limits.
Williams then admitted “I would have rather not cast a vote for the other two ,” but explained that the sales and occupation taxes were the only “tools on our belt” given us by the legislature to remove the regressive B & O tax. In fact, he challenged the legislature to provide the city other opportunities to remove the B & O , like the state has already done.
Expressing his vision, Williams beamed that releasing this gorilla will provide the opportunity for Huntington to grow and prosper and become a city where the streets are paved, the crime is down, and higher paying jobs come by “creating an entrepreneurial society.”
The removal and reduction of fees component passed without opposition.
IT’S NOT OVER
Although the ordinances have passed, the city must now hold two hearings on amendments to the Home Rule plan. Originally, the city’s proposal did not include a sales tax and the occupation tax proposal was to be revenue neutral. Council must pass the amended Home Rule plan, which must then receive a thumbs up from the state home rule board.
In addition, litigation concerning the constitutionality of the Home Rule authority itself is expected. Others are planning a petition to put the occupation tax on the ballot. After the meeting, city attorney Scott McClure opined that the home rule authority did not operate in the same manner as a recall vote.
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