MORGANTOWN – Two different resolution to allow West Virginia voters to give the Legislature authority over setting property tax rates are working their way through the system.
House Judiciary gave its approval Friday to HJR 3. It proposes a constitutional amendment that, if approved by the voters in November 2022, would enable the Legislature to set the rates for “tangible machinery and equipment personal property directly used in business activity [and] tangible inventory personal property directly used in business activity.”
The resolution was originally broader, proposing to give the Legislature authority over all property taxes. House Finance amended it Monday to make it more narrow and sent it to Judiciary.
Previous efforts to eliminate the business inventory, machinery and equipment tax has failed because no one has come up with a palatable way to make up the lost revenue that goes to counties, cities and schools.
Jonathan Adler, executive director of the West Virginia Association of Counties, told the delegates they don’t know what impact the constitutional amendment might have. “It could be many hundreds of millions of dollars, we fear.”
Adler had in mind a broader Senate resolution, SJR 7, approved by Senate Judiciary last week and then by Senate Finance Friday afternoon. It would give the Legislature authority over the rates for personal property taxes on vehicles plus business inventory, equipment and machinery.
“We’re just seeing cuts, cuts, cuts,” Adler said. Under SJR 7, they see $100 million in car tax alone going away.
In any case, Adler said, they’re looking at personnel costs in vital offices such as law enforcement. “Our fear is, the only recourse really is to look at raising property tax rates.”
Four years ago, he said, they estimated a similar measure would cost $560 million; this may be more than that. “People are going to be looking at how they can afford their homes, how they can keep their homes.”
HJR 3 passed in a divided voice vote and goes to the House floor.
SJR 7
SJR 7 would go before the voters in November 2022 if approved by both houses of the Legislature (the original resolution had the wrong year).
Jennifer Piercy, executive director of the County Commissioners’ Association of West Virginia, told Senate Finance members that the constitutional amendment could make it possible to eliminate constitutionally protected revenues and sets up great uncertainty. “This bill would defund law enforcement, ambulance and fire services. … There needs to be careful consideration of the possible consequences of this type of decision on counties.”
And while they’ve been promised a seat at the table, she said, they have not been invited to or involved in work group meetings and discussions.
Sen. Mike Maroney, R-Marshall, supported the resolution, saying it offers the opportunity to do away with regressive taxes in the future if the economy allows for it, and to make the state more business friendly. “We really just have to let the people decide.”
Sen. Ron Stollings, D-Boone, said, “I just worry about our counties, folks.” And the resolution is full of legalese. “I’m just not sure how well this reads for the average West Virginian, to really know what they’re doing.”
Sen. Chuck Swope, R-Mercer, said all the worries are premature and speculative. The money discussions would begin only after the people vote. “It’s a jobs bill. All the counties will benefit with more jobs.”
SJR 7 passed in a divided voice vote and heads to the Senate floor. SJR 7 and HJR 3 are both joint resolutions and need to be approved by the other house to put an amendment question on the ballot.
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