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NEWS BRIEFS
Council advances occupation tax
HUNTINGTON -- Huntington City Council members on Monday advanced a proposed 1 percent occupation tax to a second reading.
The occupation tax also withstood an attempt by Councilman Scott Caserta to table the measure, which moved on without any amendments.
A few council members, however, indicated they will attempt to amend the occupation tax ordinance in addition to reducing or eliminating a slew of other taxes or fees.
"This is no longer a discussion about simply adopting an occupation tax," Councilman Steve Williams said during the meeting. "From my standpoint, we're talking about imposing one tax and rescinding or reducing six other taxes and fees."
Williams' comments came after audience members, most of whom lived outside city limits, bombarded City Council and Mayor Kim Wolfe with opposition to the tax during the third public hearing on the matter in as many weeks.
Most reiterated the opinion that the proposal is taxation without representation and shifts a disproportionate amount of the tax burden to people who work, but don't live, in the city.
A representative of Appalachian Power also told council members that the 90 employees who work for the company in the city have taken a stand against the proposed tax. The Huntington Regional Chamber of Commerce, Marshall University's faculty senate and Marshall President Stephen Kopp voiced their opposition to the proposal last week.
Much of the work on fine-tuning the occupation tax and altering other taxes and fees has just begun, but most council members have a good sense of the direction they are heading, Williams said. By the Friday, April 30, Finance Committee meeting, the committee should have two additional ordinances to consider, he said.
One would reduce the municipal service fee next fiscal year, which begins July 1. The other would eliminate the business and occupation tax for manufacturers and reduce the tax for service- and retail-based businesses. The proposed reductions are not finalized yet, because council members are still working with Wolfe's administration on estimates, Williams said.
The two ordinances would be coupled with a repeal of the $3-a-week user fee, which is mandatory if the city implements an occupation tax.
Anyone who owns property in the city, whether it be residential, commercial or industrial, pays the municipal service fee. It is a base fee of $120 on each parcel in addition to 7.35 cents per square foot of property owned. The fee generates about $6.3 million a year, or 15 percent of Huntington's $40 million budget.
Williams said he will propose to reduce the base portion of the municipal service fee by $20 and knock off a penny on the square footage portion.
The B&O tax by far is Huntington's largest revenue stream and viewed by many as the most unfriendly form of taxation for businesses because it is assessed on gross receipts. The tax is projected to bring in $15.4 million next year, although manufacturing businesses are estimated to account for only $120,000 of that amount. The bulk of the tax comes from service-based businesses ($4.4 million), utilities ($3.8 million) and retailers and restaurants ($2.8 million).
Despite opposition to the occupation tax, Councilman Nate Randolph said the city must move forward with tax reform. He noted Huntington, through its home rule plan, is the only city in the state that has the authority to adopt a 1 percent occupation tax. The city is prohibited from raising it above 1 percent, according to its home rule plan.
"We do the state and all municipalities in it a disservice by not exploring this option," Randolph said. "If we fail, we fail. But nothing ventured nothing gained, either."
The only way Huntington is going to survive is through business growth, Randolph said. Its tax structure is littered with nuisance fees and taxes that drive businesses outside city limits, he said.
"Whatever tax structure we propose will never appear to be equitable to everyone," he said. "But the fact is if Huntington doesn't have the ability to grow businesses, we're all heading in a downward cycle."
Even though those who make less than $10,000 would be eligible for a refund, Caserta said the occupation tax would hurt low-income families. That prompted him to make a motion to table the ordinance. The motion failed 8-2, with one council member absent (Frances Jackson). Councilwoman Rebeccah Thacker joined Caserta in voting for the motion.
Caserta then said he will make an amendment at the next council meeting to raise the refundable income limit to $25,000 for individuals and $50,000 for married couples. The tax also should be based on net salary and not gross, he said.
"If we can't kill it, let's try to at least do it more fairly," Caserta said.
The second reading of the occupation tax is now scheduled to occur at the council's May 10 meeting. Any amendments made during the second reading would delay a final vote on the tax until the May 24 meeting. The council is prohibited from making substantial amendments to a measure and voting on it at the same meeting.
