Mayor Backs Tax Cut Delay

WHEELING – Following up on a theme outlined in his State of the City address, Mayor Andy McKenzie on Thursday asked City Manager Robert Herron to develop a plan to reduce the size of government while eventually providing promised tax relief to local businesses.

McKenzie – admitting the city may have acted hastily in enacting a tandem of tax code changes last year, including a 0.5-percent municipal sales tax coupled with $1.1 million in business and occupation tax reductions – called for a delay in the B&O reductions that were set to kick in April 1. But McKenzie said he wants to be clear: The city is not scrapping B&O tax reform, but with the sales tax underperforming initial forecasts, he believes City Council needs to take a step back and re-evaluate the best way both to cut costs and reduce the tax burden on businesses.

Noting more comprehensive B&O tax reform likely would require exercise of the city’s home rule powers – a process that could take at least three months – McKenzie said he’d like to see movement on the issue within 120 days. He also pledged 100 percent of additional revenue received by delaying the B&O reductions would go directly back to residents in the form of street paving and other infrastructure improvements.

“We’re not reneging” on a promise made to taxpayers, McKenzie said. “Maybe we can do even more.”

Council passed the municipal sales tax prior to expiration of the original Municipal Home Rule Pilot Program, so additional restrictions the Legislature imposed on participating cities when it extended the program last year – including one nullfiying local sales taxes if a city raises or reinstates previously reduced B&O taxes – don’t apply to Wheeling, McKenzie and Herron said.

McKenzie also called for a review of employment in the city, which has about 390 workers – one for every 72 of its estimated 28,213 residents.

He stopped short of calling for outright layoffs, but said some positions in the city may not need to be filled when they next become vacant.

“I can provide you recommendations and it will be dramatic,” Herron said. “You’ve got to be prepared for that.”

McKenzie said the city’s finances remain strong, but with no end in sight for increasing pension and health insurance costs, he fears the city’s current course may be unsustainable.

“Every year we put this off, the issue is growing,” McKenzie said. “In three or five years, you might be in a position where you have to lay somebody off. … This is an opportunity to do what we’ve been talking about for a long time.”

McKenzie also pointed to the command structure of the police department – where officers of higher rank such as corporals, sergeants and lieutenants outnumber patrolmen 39 to 36 – as an area where efficiency could be improved. Wheeling often spends thousands to train officers, in many cases only to lose them within a few years to a higher-paying job in another city or with the State Police, but having fewer officers of higher rank could free up additional money to help retain younger officers.

Council is set to vote on Wheeling’s $31.49 million budget for 2014-15, along with the measure delaying B&O tax relief, Tuesday.