Sept. 26, 2010
Huntington Home Rule Revision Not Done Deal
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – During a Friday evening interview with Del. Jim Morgan who serves as a nonvoting member on the State Home Rule Board, his words stressed Huntington’s revision is by no means a rubber stamp “done deal.”
Originally, Huntington plan contained a revenue neutral proposal to levy an occupation tax and/or a sales tax. Under the proposal, the user fee and other taxes, such as the business and occupation tax on city establishment grosses, would have been eliminated.
The revised tax reform package has found itself in a battle due to the one percent occupation tax, which would be levied on certain forms of income received from employment within the city. As presented in the revised proposal, the occupation tax went from revenue neutral to generating at least an estimated $3.-$3.5 million dollars.
The shift to what generally translates to a tax on income has drawn wrath from city residents and from those who work in Huntington but live outside the city. “Taxation without representation” has been voiced over and over at local hearings on the proposed tax. These complaints come from those living outside the city but working in the city. Simultaneously, those with mobility options have threatened to avoid Huntington establishments if the city dips into their paychecks.
Huntington City Council has worked conscientiously with the administration to develop “fair” tax reforms that would assist in moving the city forward.
Although the package has finally made it through council with a favorable vote, the County Commission has gone on record as supporting a constitutional challenge to the occupation tax levied on residents living outside the city and a challenge to the constitutionality of the entire home rule program.
Del. Jim Morgan (D ) serves on the Home Rule Board. He voted for the home rule authority, but has expressed objections to the occupation tax. In the interview, Morgan expressed his sense that the committee might turn down the Revised Plan, as proposed, in order to forestall the possibility of the constitutional challenge which could put at risk progress made by Huntington and the three other cities by passing ordinances that did not involve taxation.
The board tabled the Huntington request asking for additional written documentation. One area relates to certifications on the constitutionality and the other area asks for a sales tax feasibility study. (That’s ironic in that MU asked the city to hold off and conduct such a study prior to enacting the occupation tax.)
Morgan explained that Kin Sayre, an accountant/attorney, asked questions regarding the ordinance which exempts certain types of income from the tax, such as pensions. The question from an accounting standpoint asks whether the excluded earnings/income mirrors the federal income tax.
“[Sayre] wanted to know if the exemptions [on what income would not be taxedx] met federal guidelines,” Morgan said.
Based on Morgan’s perspective, the board had concerns that a court challenge to the pilot program’s constitutionality might unravel the progressive laws already put in place under the “pilot” concept by Huntington, Charleston, Wheeling and Bridgeport.
The fire insurance debris removal withholding spawned a similar challenge, but with assistance from the governor, a compromise was reached.
“There was something to negotiate with the insurance thing. I don’t know what we could negotiate or who to negotiate with [in the case of the occupation tax],” Morgan said .” If there happens to be a suit, it will have to stand on the merits as opposed to settling it within.”
Asked about the committee’s sentiment for facing an on the merit’s constitutionality challenge, Morgan acknowledged “the law itself is rather vague. The committee pointed to that. I think the committee feels that the other cities have done other things and Huntington has done other things that may make a better showing from the pilot study” for legislative review of renewal or expansion of the program. “There would be an opportunity to say, home rule works,” he said.
Thus, Morgan considers the threatened suit as a court challenge that could undo progressive moves already made by the four pilot cities. “… I would not like to see that [litigation] happen because the projects [that] other cities and Huntington have taken on have helped and not bothered anybody,” Morgan said.
HNN : This is not a done deal by any means.
MORGAN: No, no…
HNN: Did the Board ask for a feasibility study on the Sales Tax in light of the Dept. of Tax and Revenue’s nearly $3 million dollar estimate to administer the tax?
” I’m not sure. He basically said what the COSTS would be.” Morgan said adding that the Tax Department did not necessarily say all of the cited costs would be changed Huntington to administer the sales tax. Another article indicated that the fee for Huntington could be 10% of that collected.
As the October 1 implementation date for the occupation tax, now, in apparent jeopardy, Morgan suggested that the City of Huntington look elsewhere for additional revenues besides the two taxes proposed in the revised plan.
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Huntington Home Rule Revision Not Done Deal
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – During a Friday evening interview with Del. Jim Morgan who serves as a nonvoting member on the State Home Rule Board, his words stressed Huntington’s revision is by no means a rubber stamp “done deal.”
Originally, Huntington plan contained a revenue neutral proposal to levy an occupation tax and/or a sales tax. Under the proposal, the user fee and other taxes, such as the business and occupation tax on city establishment grosses, would have been eliminated.
The revised tax reform package has found itself in a battle due to the one percent occupation tax, which would be levied on certain forms of income received from employment within the city. As presented in the revised proposal, the occupation tax went from revenue neutral to generating at least an estimated $3.-$3.5 million dollars.
The shift to what generally translates to a tax on income has drawn wrath from city residents and from those who work in Huntington but live outside the city. “Taxation without representation” has been voiced over and over at local hearings on the proposed tax. These complaints come from those living outside the city but working in the city. Simultaneously, those with mobility options have threatened to avoid Huntington establishments if the city dips into their paychecks.
Huntington City Council has worked conscientiously with the administration to develop “fair” tax reforms that would assist in moving the city forward.
Although the package has finally made it through council with a favorable vote, the County Commission has gone on record as supporting a constitutional challenge to the occupation tax levied on residents living outside the city and a challenge to the constitutionality of the entire home rule program.
Del. Jim Morgan (D ) serves on the Home Rule Board. He voted for the home rule authority, but has expressed objections to the occupation tax. In the interview, Morgan expressed his sense that the committee might turn down the Revised Plan, as proposed, in order to forestall the possibility of the constitutional challenge which could put at risk progress made by Huntington and the three other cities by passing ordinances that did not involve taxation.
The board tabled the Huntington request asking for additional written documentation. One area relates to certifications on the constitutionality and the other area asks for a sales tax feasibility study. (That’s ironic in that MU asked the city to hold off and conduct such a study prior to enacting the occupation tax.)
Morgan explained that Kin Sayre, an accountant/attorney, asked questions regarding the ordinance which exempts certain types of income from the tax, such as pensions. The question from an accounting standpoint asks whether the excluded earnings/income mirrors the federal income tax.
“[Sayre] wanted to know if the exemptions [on what income would not be taxedx] met federal guidelines,” Morgan said.
Based on Morgan’s perspective, the board had concerns that a court challenge to the pilot program’s constitutionality might unravel the progressive laws already put in place under the “pilot” concept by Huntington, Charleston, Wheeling and Bridgeport.
The fire insurance debris removal withholding spawned a similar challenge, but with assistance from the governor, a compromise was reached.
“There was something to negotiate with the insurance thing. I don’t know what we could negotiate or who to negotiate with [in the case of the occupation tax],” Morgan said .” If there happens to be a suit, it will have to stand on the merits as opposed to settling it within.”
Asked about the committee’s sentiment for facing an on the merit’s constitutionality challenge, Morgan acknowledged “the law itself is rather vague. The committee pointed to that. I think the committee feels that the other cities have done other things and Huntington has done other things that may make a better showing from the pilot study” for legislative review of renewal or expansion of the program. “There would be an opportunity to say, home rule works,” he said.
Thus, Morgan considers the threatened suit as a court challenge that could undo progressive moves already made by the four pilot cities. “… I would not like to see that [litigation] happen because the projects [that] other cities and Huntington have taken on have helped and not bothered anybody,” Morgan said.
HNN : This is not a done deal by any means.
MORGAN: No, no…
HNN: Did the Board ask for a feasibility study on the Sales Tax in light of the Dept. of Tax and Revenue’s nearly $3 million dollar estimate to administer the tax?
” I’m not sure. He basically said what the COSTS would be.” Morgan said adding that the Tax Department did not necessarily say all of the cited costs would be changed Huntington to administer the sales tax. Another article indicated that the fee for Huntington could be 10% of that collected.
As the October 1 implementation date for the occupation tax, now, in apparent jeopardy, Morgan suggested that the City of Huntington look elsewhere for additional revenues besides the two taxes proposed in the revised plan.
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