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OPINIONS
Editorial: City, counties in need of greater financial flexibility
A work group appointed by West Virginia Gov. Joe Manchin is looking for ways to modernize the state's tax system, and it is likely to turn attention to matters that could affect local governments.
That's good, so long as any resulting recommendations don't tie the hands of local governments any more than they are now.
The work group, chaired by state Tax Commissioner Christopher Morris, was asked by Manchin to propose ways of making the state's tax system more efficient. A report by a similar group in 2006 led to the elimination or reduction of several business taxes and a new tax credit for low-income families, among other measures.
Lowering taxes is not a likely outcome from the current group, Morris said. Instead, it figures to be more focused on bringing old laws up to date and giving counties and municipalities more flexibility in collecting taxes. The latter notion is long overdue.
Marshall University economist Cal Kent, a former Huntington City Council member, says West Virginia keeps a tighter rein on local government finances than any other state in the nation. Local governments that may need more revenues for worthy projects or just to maintain services have very few places to turn, as Huntington has found out over the years. Cabell County's government also has struggled with balancing its budget.
The tax modernization group had its first meeting less than two weeks ago, so any specific proposals are yet to come. But giving counties and municipalities more authority to levy taxes was a policy broadly agreed on by members of the work group.
Among the ideas they might consider are permitting countywide sales taxes and allowing county levies to pass with a greater than 50 percent majority of votes instead of better than 60 percent as required now. Kent says a variety of administrative reforms could allow local governments to collect more money and not cost the state anything.
We have no desire to see local governments given carte blanche to raise taxes. But giving them more options to raise revenues for tackling important problems is a step in the right direction.
Another possible area of discussion for the work group is calling for the Legislature to commission a study of the state's telecommunications tax code, some of which dates back several decades. While that makes sense, considering how the telecommunications landscape has changed over the years, it does raise another concern involving local governments.
Now, most taxes from that industry are paid locally in the form of 911 fees, utility excise taxes and other measures. The work group, and any legislative commission that studies the issue, should be careful not to strip revenues from the local governments that count on them to provide valuable services, such as ambulance and dispatch services in Cabell County.
