Sept. 14, 2010
Huntington “Sold” State Home Rule Board Revenue Neutral Occupation Tax Plan
Councilman Ritter Reveals Del. Jim Morgan Concerns
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) - Huntington City Council held a public hearing on the city’s revised Home Rule proposal and heard first reading of the ordinance that would approve the revisions. However, at the same time, four members of the administration were meeting in Charleston with members of the State Home Rule Board.
The results of the Charleston meeting at this time are unknown; however, councilman Jim Ritter Monday afternoon had a conversation with Del. Jim Morgan, a member of the board. Ritter appeared to imply that Morgan and other Home Rule Board members have concerns related to the tax reform plan which includes the one-percent occupation tax and the one percent sales tax. Ritter informed council that from his conversation with Morgan, the committee may require more definitive determinations on expenditures made from the occupation tax.
“They wanted to know exactly how it was going to be spent,” Ritter told HNN.
However, Mayor Kim Wolfe clarified that the Monday Charleston meeting related to “procedures, answering questions on the adjustments and amendments to the Home Rule Plan.” Mayor Wolfe told HNN, “I don’t think [revenue neutral] is a concern.”
Attending the Charleston meeting were: Brandi Jacobs-Jones, director of finance and administration; Deron Runyon, director of finance; Charles Holley, director of planning and development.
“They are very prepared to answer questions about the amendments,” Mayor Wolfe explained. “We feel comfortable those can be answered satisfactorily.”
Wolfe stated that the allocation issues which Mr. Ritter spoke --- “where the money would be designated” ---- “is up to council in the budget. That’s different from the [Revised] Home Rule plan.”
Ritter’s explanation appeared mostly in sync with Wolfe. In other words, the question posed from Morgan likely would not jeopardize the plan’s approval. Rather than specify percentage applications prior to home rule board approval, Ritter stated “council could change our ordinance later on to show where each percentage (i.e. storm water, landfill, streets) would go. We would have to show how we are going to spend the money and where.”
REVISED HOME RULE PLAN
As proposed, a portion of the first $7 million in collections must be allocated to removal of the $3.00 per week city user fee and partial removal of business and occupation taxes on city businesses. The remainder would go in the general fund. Since the projections are tentative, the plan proposed to allocate any amount between $7-$9 million to infrastructure related projects. If the tax generates more than $9 million , these funds would go to fully removing the business and occupation tax.
This revised plan differs from the package sold to the home rule authority --- the authority approved use of occupation and/or sales taxes to replace existing taxes, not generate revenue.
However, some members of the board have stated on record that it is not their task to interfere in the city’s fiscal affairs.
ORIGINALLY APPROVED PLAN REVENUE NEUTRAL
Quoting from a November 12, 2007 “draft,” the City of Huntington proposed it be given authority to impose a Municipal Occupation Tax and/or Municipal Retail Sales/Use Tax. “The reason for the request IS NOT to place additional tax burdens on the cities of the City , but to create a fairer way for the city to raise revenue.”
The state currently allows cities with “severe” underfunded police and fire pensions to impose a “pension relief municipal occupation tax,” which could be used to pay down the unfunded liability. Arguing in opposition to that option, the proposal said, “this would have significantly increased the tax burdens already imposed in Huntington without providing any tax relief or improved equity.”
The state home rule board plan specifically calls for repeal of the current user fee and that “remaining money would be used to reduce the current B & O taxes paid by businesses within the city.”
Cal Kent, vice president of Business and Economic Research at Marshall University and a former councilman, wrote the tax reform sections of the original plan. In an August 2010 interview he told the Herald-Dispatch, “the original idea behind the occupation tax is that it would have replaced other existing taxes, meaning it would have been revenue-neutral. That’s how we framed it and sold it to the Home Rule Board.”
(Editor’s Note: At the time of the original plans approval, David Fellinton was Huntington’s mayor.)
Kent continued, “now we are talking about this [revised] tax package generating a few million dollars for the city.” He stated he would have voted for the new proposal “holding his nose” while doing it.
LEGAL SABER RATTLING
Tom McCallister, a Former councilman and a member of the review board that wrote the current City Charter, pleaded with council members concerning the perceived unconstitutionality of the occupation tax.
He reminded council that members of the County Commission are on record as supporting a lawsuit to determine the constitutionality of the City of Huntington’s home rule program that includes the occupation tax.
Rumors have circulated that legal challenges will occur in more than one venue, including the original jurisdiction of the West Virginia Supreme Court of Appeals and Kanawha County Circuit Court. Sources suggest that the litigation raise more questions than “taxation without representation.”
McCallister indicated that the voter initiative is still on the table, but he appeared be waiting for the state board to approve the revisions before laying his cards on the table.
WHAT’S NEXT
Huntington City Council will hold a special call second reading of the revised home rule ordinance. The meeting will occur at 4:45 p.m. September 23. The state home rule board is scheduled to meet and likely vote on the revision Friday, September 24.
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Huntington “Sold” State Home Rule Board Revenue Neutral Occupation Tax Plan
Councilman Ritter Reveals Del. Jim Morgan Concerns
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) - Huntington City Council held a public hearing on the city’s revised Home Rule proposal and heard first reading of the ordinance that would approve the revisions. However, at the same time, four members of the administration were meeting in Charleston with members of the State Home Rule Board.
The results of the Charleston meeting at this time are unknown; however, councilman Jim Ritter Monday afternoon had a conversation with Del. Jim Morgan, a member of the board. Ritter appeared to imply that Morgan and other Home Rule Board members have concerns related to the tax reform plan which includes the one-percent occupation tax and the one percent sales tax. Ritter informed council that from his conversation with Morgan, the committee may require more definitive determinations on expenditures made from the occupation tax.
“They wanted to know exactly how it was going to be spent,” Ritter told HNN.
However, Mayor Kim Wolfe clarified that the Monday Charleston meeting related to “procedures, answering questions on the adjustments and amendments to the Home Rule Plan.” Mayor Wolfe told HNN, “I don’t think [revenue neutral] is a concern.”
Attending the Charleston meeting were: Brandi Jacobs-Jones, director of finance and administration; Deron Runyon, director of finance; Charles Holley, director of planning and development.
“They are very prepared to answer questions about the amendments,” Mayor Wolfe explained. “We feel comfortable those can be answered satisfactorily.”
Wolfe stated that the allocation issues which Mr. Ritter spoke --- “where the money would be designated” ---- “is up to council in the budget. That’s different from the [Revised] Home Rule plan.”
Ritter’s explanation appeared mostly in sync with Wolfe. In other words, the question posed from Morgan likely would not jeopardize the plan’s approval. Rather than specify percentage applications prior to home rule board approval, Ritter stated “council could change our ordinance later on to show where each percentage (i.e. storm water, landfill, streets) would go. We would have to show how we are going to spend the money and where.”
REVISED HOME RULE PLAN
As proposed, a portion of the first $7 million in collections must be allocated to removal of the $3.00 per week city user fee and partial removal of business and occupation taxes on city businesses. The remainder would go in the general fund. Since the projections are tentative, the plan proposed to allocate any amount between $7-$9 million to infrastructure related projects. If the tax generates more than $9 million , these funds would go to fully removing the business and occupation tax.
This revised plan differs from the package sold to the home rule authority --- the authority approved use of occupation and/or sales taxes to replace existing taxes, not generate revenue.
However, some members of the board have stated on record that it is not their task to interfere in the city’s fiscal affairs.
ORIGINALLY APPROVED PLAN REVENUE NEUTRAL
Quoting from a November 12, 2007 “draft,” the City of Huntington proposed it be given authority to impose a Municipal Occupation Tax and/or Municipal Retail Sales/Use Tax. “The reason for the request IS NOT to place additional tax burdens on the cities of the City , but to create a fairer way for the city to raise revenue.”
The state currently allows cities with “severe” underfunded police and fire pensions to impose a “pension relief municipal occupation tax,” which could be used to pay down the unfunded liability. Arguing in opposition to that option, the proposal said, “this would have significantly increased the tax burdens already imposed in Huntington without providing any tax relief or improved equity.”
The state home rule board plan specifically calls for repeal of the current user fee and that “remaining money would be used to reduce the current B & O taxes paid by businesses within the city.”
Cal Kent, vice president of Business and Economic Research at Marshall University and a former councilman, wrote the tax reform sections of the original plan. In an August 2010 interview he told the Herald-Dispatch, “the original idea behind the occupation tax is that it would have replaced other existing taxes, meaning it would have been revenue-neutral. That’s how we framed it and sold it to the Home Rule Board.”
(Editor’s Note: At the time of the original plans approval, David Fellinton was Huntington’s mayor.)
Kent continued, “now we are talking about this [revised] tax package generating a few million dollars for the city.” He stated he would have voted for the new proposal “holding his nose” while doing it.
LEGAL SABER RATTLING
Tom McCallister, a Former councilman and a member of the review board that wrote the current City Charter, pleaded with council members concerning the perceived unconstitutionality of the occupation tax.
He reminded council that members of the County Commission are on record as supporting a lawsuit to determine the constitutionality of the City of Huntington’s home rule program that includes the occupation tax.
Rumors have circulated that legal challenges will occur in more than one venue, including the original jurisdiction of the West Virginia Supreme Court of Appeals and Kanawha County Circuit Court. Sources suggest that the litigation raise more questions than “taxation without representation.”
McCallister indicated that the voter initiative is still on the table, but he appeared be waiting for the state board to approve the revisions before laying his cards on the table.
WHAT’S NEXT
Huntington City Council will hold a special call second reading of the revised home rule ordinance. The meeting will occur at 4:45 p.m. September 23. The state home rule board is scheduled to meet and likely vote on the revision Friday, September 24.
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