Print |
E-mail to a friend
FEATURED
Committee wants to start over on tax
Members of the United Steelworkers of America Local 37 conduct an informational picket to voice their opinions on the proposed occupational tax on Friday, April 30, 2010, at Huntington City Hall.
Purchase this photo
HUNTINGTON -- Huntington City Council's Finance Committee voted unanimously Friday to recommend that the full council withdraw a proposal for a 1 percent occupation tax.
Several committee members, however, said the city must continue working on a tax reform package that still might include an occupation tax.
The recommendation to withdraw the occupation tax in its current form will go to the full council at its May 10 meeting. The Finance Committee's five members -- Nate Randolph, Teresa Loudermilk, Sandra Clements, Jim Ritter and Steve Williams -- and councilmen Mark Bates and Russ Houck all indicated at the meeting that they will vote for the withdrawal. That would be one more than the six votes needed to remove the ordinance from the council's agenda. City Council members Jim Insco, Frances Jackson, Scott Caserta and Rebeccah Thacker did not attend the committee meeting, but Caserta and Thacker already have voiced opposition to the occupation tax.
Williams and Randolph spoke at length Friday about overwhelming public opposition and several changes that need to be made to the proposal as reasons why the withdrawal has merit.
"The consensus on council is that we need to consider a complete tax overhaul and an occupation tax still might be a component of that," Randolph said. "It's just difficult to mold what's on the table now into something useful."
The occupation tax, which would apply to the gross earnings of all people employed in Huntington, was proposed by Mayor Kim Wolfe last month as a way to plug a budget hole and help the city move forward. The proposal has been met with considerable opposition, the most vocal coming from people who work in Huntington but live outside the city.
The Huntington Regional Chamber of Commerce, Marshall University President Stephen Kopp and Marshall's Faculty Senate also have opposed the occupation tax. Before Friday's committee meeting, nearly two dozen employees of Steel of West Virginia, including CEO Tim Duke, protested against the tax in front of Huntington City Hall.
Duke called an occupation tax a "significant burden" for his company's 425 employees, about half of whom were laid off for some time during the recession.
"This sends a really unattractive message if this city is trying to keep jobs," Duke said. "We support the Chamber of Commerce's recommendation that the city hire an independent consultant to look at how the city operates and offer alternatives to this oppressive tax."
Williams said almost every business owner, resident and nonresident he has talked to about the occupation tax have vehemently opposed it. A common theme among the conversations, however, is a desire to see the city move forward, Williams said.
"That's why doing nothing cannot be an option," he said. "I don't know if an occupation tax makes sense. What I do know is if we do this too quickly, we could create some undue harm."
Williams noted that in addition to the occupation tax, the city's home rule plan allows it to implement a 1-cent sales tax.
"The problem is there are just as many negatives with a sales tax as well," Williams said.
That includes putting Huntington businesses at a further disadvantage to businesses outside city limits, he said. A penny sales tax also is estimated to generate only $3.7 million a year, as opposed to projections ranging from $8 million to $11 million for an occupation tax, he said.
While City Council is prepared to take more time in studying tax reform, Williams said he would prefer that changes be implemented by July 1, the beginning of the 2010-2011 fiscal year. Next year's budget includes 20-day furloughs for all administrative employees and most public works employees as well as $869,000 in unspecified cuts that Mayor Kim Wolfe has said would result in laying off eight to 10 employees.
Randolph said it's not his intention to vote for tax reform in the name of saving jobs or preventing furloughs. The private sector and dozens of other cities across the country have had to make painful decisions during the past year and Huntington leaders should be prepared to do the same, he said.
Williams agreed with most of Randolph's comments. He said he would like to see the council find a way to prevent the furloughs, which represent about $325,000.
Whatever tax reform package the council and Wolfe's administration come up with must focus on reducing the business and occupation tax, several council members said.
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, or about 40 percent of the city's budget.
City Finance Director Deron Runyon distributed a spreadsheet to the committee that included several estimates for eliminating the B&O tax for manufacturers and reducing it at different levels for service- and retail-based businesses.
Runyon's handout also included scenarios for an occupation tax at a 1 percent rate for Huntington residents who work in the city and a half-percent rate for nonresidents.
Blake Shelton - Well Lit and Amplified Tour 2012 
First United Methodist Church Dinner Theater: "Bitsy and Boots in the Tropics" 
ARTS presents "Love Letters" 
BASKETBALL: Marshall vs. East Carolina 
26th Annual Bill Morris Bluegrass Band Competition 
Someone to Watch Over Me 
Mountain Stage: Fountains of Wayne 
Keller Williams 
"In The Heights" 
BASKETBALL: Marshall vs. Houston 
