WEIRTON - The funds generated from the B&O tax set to go into effect Aug. 1 will be needed to fill a $1.6 million shortfall for this fiscal year.
The shortfall in the budget for the 2014-15 fiscal year - which began Tuesday - is expected despite an approved municipal budget that is not feasible, according to City Finance Director Tom Maher.
"There is a lot of misinformation out there," he said. "I provide information to City Council, the city manager, the mayor and city officials. I can't control incorrect statements made by others."
Maher said more information will be made available to the public about the tax near the end of October, when the first collection is slated to take place.
City Manager Valerie Means had no comment on the matter.
Brenda Mull, president of the Weirton Area Chamber of Commerce, said that doesn't change their stance.
"For the business community, the answer is still the municipal sales tax," she said. "We don't understand why the shortfall wasn't addressed much sooner when a decline was first noticed. We have said several times that the city didn't get into this problem overnight."
Weirton Council on Tuesday voted 3-2, with one abstention, to enact the tax despite public outcry and legal proceedings asking them not to do so. The B&O tax will go into effect Aug. 1, and rates will be set in accordance with a budget scenario proposed by 6th Ward Councilman David Dalrymple.
Most categories will be set to 25 percent of their maximum allowable rate. Existing B&O categories will remain the same, with production and utility categories set to 100 percent of the maximum allowable rate. Retail will be set to 75 percent of the maximum allowable rate, which is 0.375 percent, with a $500,000 annual exemption ($125,000 per quarter). Service will be set to 65 percent of the maximum allowable rate, which is 0.65 percent, with a $100,000 annual exemption ($25,000 per quarter). Contractors will be set to 100 percent of the maximum allowable rate, which is 2 percent, with a $100,000 per project exemption.
The proposed scenario would also reduce the police and fire service fee by approximately 20 percent. Residential fees would decrease from $50 to $40. Commercial fees would decrease from 15 cents per square foot to 12 cents per square foot and churches and schools would see their rate decrease from 8 cents per square foot to 6 cents per square foot.
The plan includes a stipulation that any excess funds superseding the projected $1.6 million budget gap will be used for security.
Dalrymple's proposal would generate an estimated $1.7 million in additional revenue, figures indicate.