Aug. 13, 2010
McCalister Committed to Special Election, Litigation
Volunteers Needed
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – Do you want to vote on paying a one percent occupation tax in the City of Huntington? Tom McCalister told HNN that he’s looking for about 50 people to stand up and knock on their neighbors doors.
“I’ve not had any one refuse [to sign],” the former city council member stated. “We’d like to resolve this by having citizens say yes or no.”
According to him about 2,000 certified voter signatures from within the City of Huntington are needed to call a special election on the occupation tax which council passed Monday, August 9.
Issuing a challenge, he stated “council should voluntarily put it on there,” referring to the November ballot and thus save the costs of a special municipal election.
“We’d like the people to vote on this at no extra cost,” he said. “No one else could do it but council.”
(Click here to view the Occupation Tax/Tax Reform package and the City of Huntington’s Amended Home Rule plan, http://www.cityofhuntington.com/pages/pdfs/HomeRule0810.pdf)
Responding to City Attorney Scott McClure’s top of the head opinion Monday night that the city’s home rule authority may prevent the charter’s initiative and recall provisions from operating, McCalister scoffed that McClure was overlooking the City Charter and West Virginia Statutes. He explained that both the character and the state statute on municipalities state the requirements for voter initiative, referendum and recall. (Click for PDF of Impact of Huntington Tax Reform Financials)
“It’s unfortunate that we have a city attorney that doesn’t know we have a city charter or that the provision is in Chapter 8 of the state code.”
HOME RULE AUTHORITY DOES NOT OVERRULE CITY CHARTER
However, Floyd M. Sayre III, of Bowles Rice McDavid Graff and Love LLP and a member of the home rule board, appeared to agree with McCalister: “The home rule statute does not contemplate the amending of the City Charter or code. It only addresses potential changes to State Code.” (See separate story) Currently, the legislature limits occupation taxes to cities that need funds to supplement “under funded liability of police and fire pension funds.” Huntington has already received that assistance through the legislature approval of re-amortizing.
HOME RULE CONSTITUTIONALITY?
Since West Virginia Governor Joe Manchin and the Legislature intervened in the litigation pertaining to partial withholding of fire insurance proceeds on totally destroyed property, the constitutionality of the Home Rule Pilot program has yet to be tested in court.
The state’s Constitution does not permit municipalities to levy taxes. However, the pilot home rule program authorizes pilot municipalities and metro governments in WV to exercise broad-based home rule concepts as a “framework for municipalities” to “explore new ideas to see if they can or should be implemented on a statewide basis.”
But state law prohibits the legislature from enacting “special laws” (i.e. that , for instance, apply to one community) and not violate “general laws” that restrict the powers of cities, towns and villages to borrow money, contract debts, and shall limit the rate of taxes for municipal purposes” to conform with Article 10 of the WV Constitution (Tax Limitation Amendment).
“The legislature is prohibited by Article 6, Sec. 39, from making a special law,” McCalister explained. Could the municipal occupation and sales taxes as enacted by Huntington City Council apply to Parkersburg? “The answer is no,” McCalister said.
However, the same Pilot Program statute states the pilot cities have “the authority to enact any ordinances, acts, resolutions, rules and regulations not contrary to the constitutions of the United State or West Virginia, federal law, or [WV criminal law.]
SALES TAX AND HOME RULE BOARD
During the conversation, McCalister, who helped write the current city charter, challenged the authority of the Pilot Home Rule board to override a decision of the legislature. Bottom line, when Huntington’s amendment is presented to the Home Rule Board, only two members are lawmakers. McCalister asserts that approving Huntington’s version of a municipal sales tax places the board in a position where they could (by approving the Huntington plan) overrule the legislature, the courts and constitution.
Currently cities can impose a municipal sales/use tax only if they repeal their B & O tax entirely. “No W.Va. city , including Huntington, could raise enough revenue from a sale/use tax sufficient to replace the revenue lost from B & O repeal,” the City of Huntington’s Amended Home Rule Plan 2010 states.
“They [the legislature] is stretching to call it a pilot program,” he stated. “They can’t let a bunch of non-elected people from outside the legislative body amend state law only five people will be voting on it … no court would allow that to happen.”
(Editor’s Note: The Home Rule board as appointed by the governor includes State Sen. Ed Bowman; Del. Jim Morgan; Brian Jones, WV Professional Firefighters Association AFL-CIO; Chris Fletcher, planner Morgantown WV; Jon Amores, WV Economic Development Office; Kin Sayre, Martinsburg attorney; and Beckley Mayor Emmett Pugh.)
THE ROAD TO…
Contrary to simply looking out for the pockets of citizens, McCalister believes that the path of tax reform puts Huntington back on the road to Bankruptcy Court. Calling the package “seriously vulnerable,” McCalister added that, “It puts the city in a more precarious position for absolute bankruptcy.”
Due to the short time between State Home Rule board action and effective dates, McCalister postulated a circumstance where a legal action or a petition for an election would be filed AFTER the October 1 date. Under the ordinance, user fee collections cease if no litigation is filed; occupation tax collections start Oct. 1, unless a court orders differently.
USER FEE REMAINS UNTIL…
However, the city’s Ordinance does provide that collection of the user fee continue until a legal challenge to the occupation tax is determined favorably before stopping user fee collections. The ordinance does not state what occurs should the legal challenge occur AFTER the October 1, 2010 date when the occupation tax takes effect and user fee collections cease. (It is presumed that the ordinance would re-impose user fee collections if occupation tax collections were stopped by a court.)
Instead of clear cut circumstances, the City Charter co-writer asked what happens if either a vote or suit occurs after the transition. One business owner hearing such a scenario at the city council meeting anguished over the bookkeeping time and expense. For the city, though, it could be caught where the new revenue stream is turned off and there’s an uncertainty whether the old one can be turned back on while litigation or an election challenge filed after Oct. 1 occurs.
For instance, he opined that the voter initiative could be due 30 days after the state Home Rule board ruling.
Could the city be ordered to refund occupation taxes collected from the ordinance after October 1, if it was deemed constitutionally infirm? The result is legally debatable. However, a U.S. Supreme Court case has “recognized that the State has wide latitude in providing for remedies after a tax has been declared unconstitutional.” (McKesson v. Division of Alcoholic Beverages, 496 U.S. 18, 110 S.Ct. 2238 (1990))
VOLUNTEER AND GET SIGNATURES
Before dipping into your pockets , re-writing budgets or participating in a planned protest by shopping outside of Huntington, McCalister stated “we’ll stop it some way. We will do it whatever way we can do it.”
He did emphasize, though, that constitutional attorneys are highly priced. Getting 50 names on a petition from those in your neighborhood would likely take an hour. Tom’s # (304) 522-3192 to pick up a copy of the petition. Although only voters within the city may sign it, volunteers from outside of the city can still participate by ringing doorbells.
Editor’s Note: Although labeled an “activist”, McCalister has previous challenged various council and/or mayor interpretations of the City Charter.
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McCalister Committed to Special Election, Litigation
Volunteers Needed
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – Do you want to vote on paying a one percent occupation tax in the City of Huntington? Tom McCalister told HNN that he’s looking for about 50 people to stand up and knock on their neighbors doors.
“I’ve not had any one refuse [to sign],” the former city council member stated. “We’d like to resolve this by having citizens say yes or no.”
According to him about 2,000 certified voter signatures from within the City of Huntington are needed to call a special election on the occupation tax which council passed Monday, August 9.
Issuing a challenge, he stated “council should voluntarily put it on there,” referring to the November ballot and thus save the costs of a special municipal election.
“We’d like the people to vote on this at no extra cost,” he said. “No one else could do it but council.”
(Click here to view the Occupation Tax/Tax Reform package and the City of Huntington’s Amended Home Rule plan, http://www.cityofhuntington.com/pages/pdfs/HomeRule0810.pdf)
Responding to City Attorney Scott McClure’s top of the head opinion Monday night that the city’s home rule authority may prevent the charter’s initiative and recall provisions from operating, McCalister scoffed that McClure was overlooking the City Charter and West Virginia Statutes. He explained that both the character and the state statute on municipalities state the requirements for voter initiative, referendum and recall. (Click for PDF of Impact of Huntington Tax Reform Financials)
“It’s unfortunate that we have a city attorney that doesn’t know we have a city charter or that the provision is in Chapter 8 of the state code.”
HOME RULE AUTHORITY DOES NOT OVERRULE CITY CHARTER
However, Floyd M. Sayre III, of Bowles Rice McDavid Graff and Love LLP and a member of the home rule board, appeared to agree with McCalister: “The home rule statute does not contemplate the amending of the City Charter or code. It only addresses potential changes to State Code.” (See separate story) Currently, the legislature limits occupation taxes to cities that need funds to supplement “under funded liability of police and fire pension funds.” Huntington has already received that assistance through the legislature approval of re-amortizing.
HOME RULE CONSTITUTIONALITY?
Since West Virginia Governor Joe Manchin and the Legislature intervened in the litigation pertaining to partial withholding of fire insurance proceeds on totally destroyed property, the constitutionality of the Home Rule Pilot program has yet to be tested in court.
The state’s Constitution does not permit municipalities to levy taxes. However, the pilot home rule program authorizes pilot municipalities and metro governments in WV to exercise broad-based home rule concepts as a “framework for municipalities” to “explore new ideas to see if they can or should be implemented on a statewide basis.”
But state law prohibits the legislature from enacting “special laws” (i.e. that , for instance, apply to one community) and not violate “general laws” that restrict the powers of cities, towns and villages to borrow money, contract debts, and shall limit the rate of taxes for municipal purposes” to conform with Article 10 of the WV Constitution (Tax Limitation Amendment).
“The legislature is prohibited by Article 6, Sec. 39, from making a special law,” McCalister explained. Could the municipal occupation and sales taxes as enacted by Huntington City Council apply to Parkersburg? “The answer is no,” McCalister said.
However, the same Pilot Program statute states the pilot cities have “the authority to enact any ordinances, acts, resolutions, rules and regulations not contrary to the constitutions of the United State or West Virginia, federal law, or [WV criminal law.]
SALES TAX AND HOME RULE BOARD
During the conversation, McCalister, who helped write the current city charter, challenged the authority of the Pilot Home Rule board to override a decision of the legislature. Bottom line, when Huntington’s amendment is presented to the Home Rule Board, only two members are lawmakers. McCalister asserts that approving Huntington’s version of a municipal sales tax places the board in a position where they could (by approving the Huntington plan) overrule the legislature, the courts and constitution.
Currently cities can impose a municipal sales/use tax only if they repeal their B & O tax entirely. “No W.Va. city , including Huntington, could raise enough revenue from a sale/use tax sufficient to replace the revenue lost from B & O repeal,” the City of Huntington’s Amended Home Rule Plan 2010 states.
“They [the legislature] is stretching to call it a pilot program,” he stated. “They can’t let a bunch of non-elected people from outside the legislative body amend state law only five people will be voting on it … no court would allow that to happen.”
(Editor’s Note: The Home Rule board as appointed by the governor includes State Sen. Ed Bowman; Del. Jim Morgan; Brian Jones, WV Professional Firefighters Association AFL-CIO; Chris Fletcher, planner Morgantown WV; Jon Amores, WV Economic Development Office; Kin Sayre, Martinsburg attorney; and Beckley Mayor Emmett Pugh.)
THE ROAD TO…
Contrary to simply looking out for the pockets of citizens, McCalister believes that the path of tax reform puts Huntington back on the road to Bankruptcy Court. Calling the package “seriously vulnerable,” McCalister added that, “It puts the city in a more precarious position for absolute bankruptcy.”
Due to the short time between State Home Rule board action and effective dates, McCalister postulated a circumstance where a legal action or a petition for an election would be filed AFTER the October 1 date. Under the ordinance, user fee collections cease if no litigation is filed; occupation tax collections start Oct. 1, unless a court orders differently.
USER FEE REMAINS UNTIL…
However, the city’s Ordinance does provide that collection of the user fee continue until a legal challenge to the occupation tax is determined favorably before stopping user fee collections. The ordinance does not state what occurs should the legal challenge occur AFTER the October 1, 2010 date when the occupation tax takes effect and user fee collections cease. (It is presumed that the ordinance would re-impose user fee collections if occupation tax collections were stopped by a court.)
Instead of clear cut circumstances, the City Charter co-writer asked what happens if either a vote or suit occurs after the transition. One business owner hearing such a scenario at the city council meeting anguished over the bookkeeping time and expense. For the city, though, it could be caught where the new revenue stream is turned off and there’s an uncertainty whether the old one can be turned back on while litigation or an election challenge filed after Oct. 1 occurs.
For instance, he opined that the voter initiative could be due 30 days after the state Home Rule board ruling.
Could the city be ordered to refund occupation taxes collected from the ordinance after October 1, if it was deemed constitutionally infirm? The result is legally debatable. However, a U.S. Supreme Court case has “recognized that the State has wide latitude in providing for remedies after a tax has been declared unconstitutional.” (McKesson v. Division of Alcoholic Beverages, 496 U.S. 18, 110 S.Ct. 2238 (1990))
VOLUNTEER AND GET SIGNATURES
Before dipping into your pockets , re-writing budgets or participating in a planned protest by shopping outside of Huntington, McCalister stated “we’ll stop it some way. We will do it whatever way we can do it.”
He did emphasize, though, that constitutional attorneys are highly priced. Getting 50 names on a petition from those in your neighborhood would likely take an hour. Tom’s # (304) 522-3192 to pick up a copy of the petition. Although only voters within the city may sign it, volunteers from outside of the city can still participate by ringing doorbells.
Editor’s Note: Although labeled an “activist”, McCalister has previous challenged various council and/or mayor interpretations of the City Charter.
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