The city of Morgantown received its first quarterly sales tax allotment at the end of October.
The initial $1,206,614.29 payment is the result of a process that began in 2014, when Morgantown was granted the authority to implement a sales tax as part of its original Home Rule application.
The five-year delay is due in large part to a city council decision in October of 2015 to instead implement a $3 weekly user fee for everyone working within city limits. That fee went into effect in January of 2016.
Morgantown was the largest city in the state without a sales tax when city council approved the 1% tax in May of 2019. It went into effect on July 1.
The state estimated Morgantown would generate $5 million annually based on revenue collected by comparable cities.
“Due to COVID-19 we reduced the estimated collection amount to $3.375 million. Our finance department believes we should hit our budgeted amount, but it’s too early to give a more exact estimate at least until we see what next quarter will generate,” Communications Manager Andrew Stacy said.
Interim Finance Director Lori Livengood recently told BOPARC that discussions with other cities indicate it could take up to two years of collections before the city gets an accurate picture of expected revenue.
She also said this first payment comes with a bit of follow-up work for the city.
“We need to get a letter from the mayor so we can actually see what was included in that amount to make sure what we’re getting is actually within city limits,” she said.
Former Finance Director Jim Goff previously explained that he and GIS Analyst Marvin Davis spent months with the state in an attempt to parse which businesses were in the city and which were out using the state’s mandated metric — nine-digit zip codes — of which there are 5,900 in the city.
The distribution of sales tax funds approved as part of the city’s 2021 fiscal year spending plan divides the revenue evenly four ways between BOPARC, the city’s retirement fund, capital escrow budget and general fund.