Manufacturing B&O Tax to Remain for Now

WHEELING – After several weeks of discussion, Wheeling City Council made it official Tuesday: The city will not reduce its business and occupation tax on manufacturers April 1.

Council approved the measure unanimously during a special meeting Tuesday, one week after it passed a similar measure delaying a planned reduction in the B&O rate on retail businesses. Taken together, the measures will preserve an estimated $1.1 million in revenue next fiscal year and allow Wheeling officials time for a more thorough review of the city’s tax code and the way it spends money.

Council has directed City Manager Robert Herron to come back to them by June with new recommendations for changes in the B&O tax structure, as well as a plan to cut expenses – possibly by reducing the city’s work force.

“We are not voting to not reduce B&O. … At the end of the day, it’s possible that we may be looking at an even greater reduction in B&O” taxes, Wheeling Mayor Andy McKenzie said.

Downtown resident Charles Ballouz was the only person to speak during a public hearing that opened Tuesday’s meeting. He reminded council of the B&O tax break council enacted in 2006, under former Mayor Nick Sparachane, mandating that new businesses downtown pay no B&O tax for their first three years in existence. Existing businesses were given a 50-percent reduction.

Ballouz said longstanding business owners have gotten shortchanged in that arrangement.

“The thing is, they got a slap in the face, the (existing) businesses,” he said. “Now you’re telling them to turn the other cheek, at least for a while.”

Following the meeting, McKenzie said the downtown tax incentive – which he doesn’t believe has worked, he has said in the past – is one of the things the city will be looking at in the coming months.

Council passed the B&O reductions last June, at the same time they enacted a 0.5-percent sales tax covering most goods and services offered in the city.

The new sales tax was enacted to provide a revenue stream large enough to offset the proposed B&O reductions and still provide additional money for infrastructure projects and upgrades to WesBanco Arena. However, initial estimates proved overly optimistic, sparking concern about the impact of the B&O cuts that had been scheduled to go into effect next week.

Herron’s original budget proposal, which council approved last week, only called for a delay in the retail B&O reduction but would have left the break on manufacturing in place. But during a recent budget meeting, McKenzie suggested holding off on all B&O changes temporarily – effectively hitting the “pause” button as Herron completes his review.

McKenzie has said any additional revenue received as a result of delaying B&O reductions would go directly back to taxpayers in the form of street paving and other infrastructure projects.