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The West Virginia State Senate recently released an outline of a plan to eliminate business personal property taxes and use state revenues to reimburse counties, schools, and municipalities for the hundreds of millions of dollars in property tax revenue that would be lost if Amendment Two or the “Property Tax Modernization Amendment” were to pass. While the Senate claims the plan would replace all $500 million+ in lost property tax revenue without raising other taxes – while also allowing for the eventual full elimination of the income tax – the plan is based on unrealistic revenue and spending assumptions that have been highly influenced by the pandemic and the tens of billions of federal aid West Virginia has received in the past two years.
Under normal budget scenarios, the Senate’s promised local government reimbursement would quickly become unsustainable. Without major new sources of revenue or painful state budget cuts, it is unlikely the Senate would be able to fulfill its promise to local governments, putting local services like public education, emergency and fire response, parks, libraries, and senior centers at grave risk.
