Robert M. Sellards: For most people, axing vehicle tax is a far better deal

The State of West Virginia isn’t the only governmental entity that is starting to collect massive surpluses, however. Over the past several years the 55 county school systems have begun collecting significant amounts of money. This information, available by digging through individual county audit reports at the state auditor’s website, is shocking. In 2017, the 55 county school systems collectively had over $300 million left over in their general revenue and special revenue accounts after their yearly expenses were met. Add in debt service funds and bond and construction funds and the total was just under $500 million. Fast forward to 2021 and 47 of those counties (eight have yet to complete their audits) hold over $716 million excess in their general and special revenue accounts. When debt service, which is a miniscule amount, and capital projects funds are added in the total is nearly $1.2 billion.

With this information in mind, it is safe to say that West Virginia is more than meeting the obligations outlined by Justice Holmes and it’s time to look at giving some of that money back. On one hand, the governor is proposing a 10% cut to the personal income tax. There are some merits to this approach, as West Virginia has the highest personal income tax rates of our surrounding states, and no adjustments have been made in 35 years. A 10% cut, however, will still leave West Virginia with the highest rates of our surrounding states, and the benefit will largely go to the highest earners in our state.

For example, the average household income in West Virginia is $48,037 according to the U.S. Census Bureau. That household currently pays $2,057.22 in state income tax. With a 10% cut being divided by at least 24 pay periods, that household could expect to save a whopping $8.57 each pay period — barely enough to buy one breakfast at McDonalds.

On the other side, any vehicle owner in West Virginia knows that feeling of writing a large check to their county government in order to get a new vehicle registration sticker. That one-time payment that’s due each year is a financial hit to most families. The amount of this tax will vary based on factors including the vehicle’s age and cost, but for argument’s sake let’s say the average vehicle tax due is $250. If a family has two vehicles, which is typical in our state, that’s $500 per year that you have to fork over to your county each year. That amount doesn’t even take into consideration if you also own any ATVs, side-by-sides, boats, etc. that would also be subject to this tax. And if you just bought a nice new truck, you’re going to be paying much more than $250 per year on that vehicle.

All of this points to the fact that for the vast majority of West Virginians, removing the vehicle tax will be a far better deal than a 10% cut to the personal income tax. For the Legislature to work on making this a reality, however, something is required of the voters, and that is passing Amendment 2.

Amendment 2 is on the ballot this November and, if approved by the voters, would give the Legislature the authority to work on a tax reform plan that includes eliminating the tax on motor vehicles. None of this will be possible if Amendment 2 is voted down. West Virginia is the only state I have been able to find that enshrines tangible personal property taxes in its constitution. It’s long past time that is changed so that we can bring real tax relief to hard-working citizens.