MORGANTOWN – Giving the Legislature authority over setting property tax rates could be good for industry and bad for counties. Those were the two primary points of view offered during a brief Monday public hearing on the House measure to enable that.
House Judiciary held the hearing on HJR 3, which 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.”
HJR 3 was on first reading on the House floor Monday. A broader measure, SJR 7 was on first reading on the Senate floor. If approved, it would give the Legislature authority over the rates for personal property taxes on vehicles, plus business inventory, equipment and machinery.
Eleven people spoke during Monday’s hearing. Three favored the measure. They represented Toyota, the West Virginia Business and Industry Council (BIC), and the West Virginia Manufacturers Association.
Kim Menke, from Toyota, said the business inventory, equipment and machinery tax hinders capital investment and handicaps Toyota’s West Virginia operation in competing for projects with other Toyota facilities around the country.
Menke said Toyota wants to be sure any tax legislation that would follow from this effort would protect the local governments and schools supported by the tax, and it’s time for a modernized plan to accomplish that.
Mike Clowser, with BIC, and Rebecca McPhail, executive director of the Manufacturers Association, offer similar points.
This resolution, they said, would put the decision about allowing the Legislature to set the personal property tax rate in the hands of the voters.
HJR 3 does not change any tax rates or raise any taxes, they said, or affect any local budgets. It merely allows a future legislature to consider changes under public oversight.
McPhail said West Virginia is one of two states to tax business inventory, equipment and machinery, and ranks a low 46th in capital intensive manufacturing.
The remaining eight oppose the resolution.
Betty Rivard, a citizen activist and familiar face at the Capitol, said the measure is deceptive. At first blush, it looks like it lets the voters decide. But then, it actually takes away local control by letting the Legislature set local tax rates.
Wetzel County Assessor Scott Lemley said giving the Legislature oversight of property tax rates could set up a difficult appeals process tangled in red tape. “It does a major disservice to our citizens at the local level, and getting their questions answered.”
Mason County Commissioner Rick Handley reflected the thoughts of the other county officials who spoke. They haven’t seen how revenue lost by tax cuts will be made up. It raises concerns about offsetting tax hikes, property values, assessments and local levies. The counties want a seat at the table and want a plan in place “before you ask us to blindly accept this.”
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