Wheeling Mayor Glenn Elliott: Justice’s Income Tax Plan Not The Answer
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WHEELING -- Wheeling Mayor Glenn Elliott voiced strong opposition this week to West Virginia Gov. Jim Justice's recent call for a phase-out of the state's income tax.
Justice most recently in his State of the State address urged legislators to take steps to repeal the income tax in an effort to help spur economic development.
"I'm always open to ideas to make our state more competitive, and I think that's what's driving this proposal," Elliott said this week. "But to me, I think the proposal is focused a little bit in the wrong direction."
Elliott said he believes there is a perception at times in West Virginia that the state has lost a lot of retirees to the state of Florida. People look at the Sunshine State, which has no personal income tax, and assume that this is a big reason why people move there.
The idea to repeal West Virginia's income tax has come up in the past, with these kinds of arguments backing the measure.
"If you talk to most retirees who have moved to Florida, maybe for a handful of them the income tax situation is beneficial," Elliott said. "But my guess it's the great weather, it's the thousand miles of coastline, it's the golf courses everywhere, it's the retirement communities in abundance that are attracting retirees to Florida. If you go outside right now, you can see why a lot of retirees don't want to be in West Virginia, at least in the winter right now."
When it comes to things like climate, it will be hard for West Virginia to compete with a state like Florida in terms of retirement destinations, Elliott noted.
"I think it's a little bit of a misguided proposal to look at just the state income tax just to attract and keep talent, especially when I think there are so many ways we need to be making investments in ourselves right now — investments in transportation, which I'll give our governor a lot of credit," the mayor said. "We've made some major investments in our state highway systems here as part of the Roads to Prosperity plan in the last couple of years. We need more investments in infrastructure, and that's a great start."
West Virginia also needs more focus and more investments in broadband, education and diversifying the state and local economies.
"These are the things that are going to keep our talent and attract new talent here much more so than I think getting rid of the state income tax," he said. "If you look at the history of West Virginia during my lifetime — and I suspect the governor's lifetime — it's been one where we've lost population almost every year. And it's not just the retirees who have been leaving, it's the young folks who have been leaving."
High school graduates and college graduates who see opportunity in front of them to launch promising careers and start a comfortable life for a young family are motivated to take bold moves, the mayor indicated. But when they don't see those kinds of opportunities in front of them in West Virginia, they leave.
"These people who are leaving often have never paid state income taxes yet in their life," Elliott said. "So I really don't think state income taxes are driving them to go wherever they are going, they're going to where the opportunities are."
Elliott urged members of the state legislature to be "very, very thoughtful" about these issues going forward in light of the recent proposal to repeal the income tax, which brings in about $2.1 billion in revenue each year. Justice has proposed measures to make up for this loss, including a proposal to raise the state sales tax.
This, too, could spell disaster for local economies, especially those in border counties, Elliott said.
"It may sound good to get rid of the income tax, but if you do so by increasing the sales tax in particular, I think you could put a city like Wheeling and a county like Ohio County in serious distress," he said. "We are nestled between Ohio and Pennsylvania, and I think sometimes folks in Charleston forget that. If you're in Charleston, you're really in a bubble. It's a long way to get out of West Virginia, but I can look out my window right now and see Ohio, and I can get in my car and within 15 minutes, be in Pennsylvania.
"For our retail businesses, a lot of which are hurting because of this pandemic, if you raise the sales tax up from where it is at 6-7 percent now to upwards of 10 percent, that could be something that could put a lot of businesses out of business. "