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Senate Judiciary OKs constitutional amendment proposal for Legislature to control personal property taxes

The Senate Judiciary gave its approval Thursday to a proposed constitutional amendment that would give the Legislature the power to control personal property tax rates. Opponents worry such a move could blow holes in county budgets and force the counties to raise property tax rates.

SJR 7 would go before the voters in November 2024 if approved by both houses of the Legislature. It proposes to allow the Legislature to set the rates for personal property taxes on vehicles and business inventory, equipment and machinery.

Speakers who addressed the committee uniformly opposed the resolution. Kelly Allen, executive director of the West Virginia Center on Budget and Policy said only a minute portion of property taxes go to the state: about $8 million. The rest, about $1.9 billion goes to counties, municipalities and school boards.

Given that it’s been a longstanding goal of many legislators to eliminate the business personal property taxes, she said, SJR 7 would effectively take taxation authority away from local officials and pose a potential $500 million loss, chiefly to the schools.

Jonathan Adler, executive director of the West Virginia Association of Counties, reminded the seantors that a similar resolution last year, SJR 9, died on the Senate floor. Party of that was because local officials didn’t buy in to the plan to make up the lost revenue.

This year, he said, the counties want a seat at the table. West Virginia ranks first in the nation for home ownership, at 75%, and this amendment could force property tax hikes and cause people to lose their homes.

Sen. Patricia Rucker, R-Jefferson and a co-sponsor of the measure, tried to argue that people were wrongly engaging in a lot of what-ifs. This would just put the question of legislative control in the hands of the voters, she said, There’s no plan to cut anything, and the plan would require subsequent legislation.

Rocky Romano, Harrison County assessor, countered that this will lead to raising real estate taxes. He echoed Adler, that they want a seat at the table. They would prefer to know the plan to make up lost tax dollars before an amendment is passed.

Cabell County Assessor Irv Johnson said people will vote to approve the amendment because they’ll have the tax on their cars in view and would welcome that going away. But that leaves all the other taxes in question. “We need a plan.”

Sen. Mike Romano, D-Harrison and a distant cousin of the assessor, opposed the resolution because there is no plan to make up the loss. “That is where the rub comes in. … Theres’ a difference between having a seat at the table and being the main course at the table.”

Along with this measure, he said, they need to formulate a bipartisan revenue replacement plan and put that in the Constitution, too, so it;s not subject to political whim. Counties and cities are independent governments. “If we control their budgets they might as well be called an arm of the Legislature.”

Committee chair and resolution lead sponsor Charles Trump, R-Morgan, said it seems odd that the Constitution prevents legislature from lowering a tax, and that’s what this is about. If it passes, more legislation would be needed to do anything. And they would have to find other mechanisms for the local governments to make up the losses.

SJR 7 passed in a divided voice vote and goes to the full Senate.

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