Voters will see four proposals to amend the West Virginia Constitution at the very end of their ballot. For each, voters will be asked to indicate “yes” or “no.”
The proposed Amendment 2 would change the West Virginia Constitution to allow the Legislature to enact tax exemptions for business equipment, machinery, and inventory as well as for personal motor vehicles. A tax exemption sounds promising on its face, but opponents of Amendment 2 point to the loss of tax revenues that would squeeze local residents with replacement taxes or painful cuts in local government services.
In Jefferson County, the personal property tax provides about $2 million to the County budget (see pie chart below) and about $6 million to the Jefferson County Schools budget (spread across the school levy, the excess levy, and the bond levy) — roughly 5 percent of the Schools’ budget.
The principal argument against Amendment 2 is the lack of any specific plan or commitments from the Legislature on how to backfill the funds to localities. Supporters point to the many “options” the Legislature could pursue, but the overwhelming concern among local government officials is that there is no guarantee that the Legislature will provide the funds to make up for the missing revenue — or that any make-up funding would be reliable or not subsidize other areas of the state at the expense of Jefferson County taxpayers.
What A $2 Million Cut To The County Budget Might Look Like
If you sort all of the expense categories of the County Commission budget from high to low, Public Safety items are at the top – $4 million for EMS, $3.8 million for law enforcement, $2 million for the 911 call center, and $577,000 for payments to the volunteer fire companies. Another 3.8 million funds the constitutional offices (attorney, clerk, sheriff). $2.2 million goes to insurance and $7.5 million goes to various county offices (engineering, maintenance, assessor, etc). The remainder is roughly $2 million, spread across many programs that enhance our local community (graphic below).
Without a specific – and reliable – plan, Jefferson County’s accommodation to any revenue reductions imposed by the Legislature would come disproportionately from these so-called “discretionary” programs – those without a dedicated funding source or that are not mandated by the state.
Half Of The County Budget Comes From Local Property Taxes
The Jefferson County Commission’s current budget shows revenues of $29 million, with property taxes providing approximately $15 million of that total. Out of the $15 million in tax revenues, approximately $2 million comes from personal property taxes on business equipment and personal vehicles – roughly 13 percent of the total amount provided by local taxes.
The $2 million estimate was provided by Angie Banks, the Jefferson County Assessor. This calculation excludes mobile homes, buildings on leased lands, leasehold improvements, and other particular types of property. Banks pointed out that farm-use equipment (tractors, combines, etc.) is already exempt from personal property tax. She does not yet have any estimates on the tax revenue that would be generated from the solar farms that are planned for construction, but the equipment of those projects could be a significant increase to the tax base of the county – if it is not exempted by the Legislature.