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W.Va. Budget Focus at Town Hall Meeting Between Lawmakers, Residents

Towns Hall 8

WHEELING — A bill before West Virginia lawmakers would eliminate the state’s income tax in favor of a “consumption” tax, and those operating businesses in the Northern Panhandle question what effect this might have on the economies in counties that border states with a lower sales tax.

The issue was discussed Saturday as legislators representing the Northern Panhandle in Charleston hosted a town hall forum Saturday morning at West Virginia Northern Community College. The purpose of the forum was to give the public a chance to voice their opinions and concerns about West Virginia’s budget for next year as the state faces a budget deficit that will be hundreds of millions of dollars.

Present were Senate Majority Leader Ryan Ferns, R-Ohio, Sen. Ryan Weld, R-Brooke, and Delegates Erikka Storch, R-Ohio, and Shawn Fluharty, D-Ohio. The lawmakers say they aren’t certain as to the exact amount of the projected deficit, although the latest information they received estimated it at about $460 million for next year.

“We could tell you, but we would probably be wrong,” Storch said. “It seems to be a moving target.”

About 40 members of the public attended Saturday’s forum, with 16 addressing the delegation with questions or comments about state finances. The first question pertained to the proposed elimination of the state income tax in favor of a consumption tax — essentially a higher sales tax.

Ferns said research on the issue was conducted by economists at both West Virginia University and Marshall University.

He said the studies show that states without an income tax, but a higher sales tax, have economically outpaced their neighbors that maintain an income tax.

“The research on those states definitely favors those with no income tax,” Ferns said.

He said the earned income and fixed income tax credit options could be adjusted to offset any hardship on those with lower incomes.

Weld agreed the research supported the elimination of the income tax, and he added any legislation passed would need to include the EITC and FITC adjustments.

Fluharty, though, urged caution in the thought of eliminating the state’s income tax.

“In theory, when you hear about eliminating the income tax, you think everything sounds great — everybody’s income will go up,” he said. “But just because it sounds good doesn’t mean it is good. If you make over $84,000 a year, you’re really going to like it. If you make under $84,000, you will probably end up paying more — unless we do something with the earned income tax credits … .”

Storch expressed concerns about how an increased sales tax in West Virginia might affect local businesses.

“I’m really still trying to understand it all and research it,” she said. “I represent a county along the border line. I know when we buy goods in Pennsylvania or from another state we’re supposed to report those items you purchase elsewhere on your income tax return. I’m pretty sure nobody does that — I never shop in Pennsylvania. … I am concerned about our downtown Wheeling businesses in particular, as it competes with The Highlands. Wheeling already has its own sales tax imposed by home rule. … As president of the (Wheeling Area) Chamber of Commerce, I hear it frequently from businesses located downtown that they must compete unfairly with businesses not within the city limits.”

Storch said an 8-percent consumption tax figure is being discussed in the Legislature, which would make the effective sales tax rate in Wheeling 9 percent, including the municipal sales tax. The proposed consumption tax would put Ohio County’s sales tax well above the 7.25 percent sales tax charged in Belmont County.

Other topics addressed by the public included proposed cuts to arts and culture spending in West Virginia.

“We have so much history here — especially in Wheeling,” said Ohio County historian Margaret Brennan. “I’d like to think we’re the historical capital of West Virginia. I think we have to be very mindful about the small cuts, because these small cuts can amount to a lot of money for a lot of areas in history. I’m hearing about cuts to the humanities and to the arts. That would break my heart. … If we want to attract people to West Virginia, we can’t be cutting out the enrichment of our lives.”

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