Blog Posts > Amendment Two: A Power Grab that Puts Local Public Services at Risk
August 5, 2022

Amendment Two: A Power Grab that Puts Local Public Services at Risk

Amendment Two, or the Property Tax Modernization Amendment, will be on the ballot this November for West Virginia voters to consider. If passed, it would amend the constitution to give the state legislature the authority to exempt business machinery and equipment, business inventory, and personal vehicles from property taxation. As such, passage of the amendment would give the legislature control over $515 million of property tax revenue, or 27 percent of total property tax revenue in the state, resulting in the fulfillment of a long-term goal of state legislators to take control of a significant portion of property tax revenue in order to pursue a property tax cut that largely benefits out-of-state businesses.

The proposed exemptions under Amendment Two would result in local governments losing an essential revenue stream. The $515 million in property tax revenue from personal vehicles and business machinery and equipment, business inventory, and other business personal property accounts for up to 37 percent of total property tax revenue in some counties. The loss of this critical revenue will adversely impact the ability of municipalities, county governments, and school districts to provide needed services that benefit all West Virginians, and will likely lead to cuts to services or increased taxes on other parties, like homeowners.

While proponents of Amendment Two’s passage tend to focus on the potential exemption of the personal vehicle tax, over 70 percent of the potential tax cuts would go to businesses. And while proponents of eliminating West Virginia’s property tax on business machinery, equipment, inventory, and other business personal property argue that the tax impedes economic growth, there is very little evidence to support this claim. In fact, during the past decade, states with property taxes on business machinery, equipment, and inventory saw more manufacturing job growth on average than the states without such taxes, strongly undermining the claim that the tax is a significant barrier to job growth.

Our new issue brief further explains how property taxes function and benefit the state, the details of Amendment Two and the negative implications of its passage, and why the West Virginia Senate’s recently revealed plan to reimburse local governments for the potential lost revenue is not expected to be fiscally feasible.

Key Findings:

  • Property taxes are primarily a local tax in West Virginia, with over two-thirds of property tax revenue funding local school districts.
  • 40 percent of property tax revenue comes from voter-approved bond and excess levies.
  • West Virginia has some of the lowest property tax rates in the country.
  • Amendment Two would give the state legislature control over 27 percent of total property tax revenue, a total of $515 million. The legislature’s anticipated goal is to eliminate this portion of property tax revenue entirely by exempting new items from property taxation.
  • Businesses – not individuals – would receive two-thirds of the proposed tax cuts under Amendment Two.
  • If Amendment Two is passed and the legislature moves forward with exempting new items from property taxation, county governments would lose an estimated $138 million in revenue, municipal governments would lose an estimated $35 million, and school districts would lose an estimated $209 million, after adjusting for anticipated impacts to the school aid formula.
  • Very little evidence exists to support claims that West Virginia’s property taxes are a significant barrier to economic growth. Instead, studies have shown that factors such as educational attainment, infrastructure, and quality of public services – all factors that are funded by property taxes – are more important to economic growth and attracting businesses than taxes.

You can read the full brief here. Please note: an appendix with county by county impacts is included at the end of this publication.

Abortion Remains Legal in West Virginia

During last week’s special session, the West Virginia Legislature convened to consider a new abortion ban proposal. The House and Senate did not reach consensus on the bill. As such, abortion remains legal in West Virginia for now. A recent article includes further details. Excerpt below:

State lawmakers adjourned late Friday after the Senate and House failed to agree on a bill to ban nearly all abortions in West Virginia.

Negotiations between senators and delegates soon will begin in conference committee to resolve remaining disputes over the bill. The House refused changes the Senate adopted late Friday, the most significant, the removal of criminal penalties for doctors who perform abortions.

At least three members of both the House and Senate will meet in conference committee to negotiate a final bill, which will be sent to each body for passage or rejection. The conference committee process is often how disputes in the massive annual budget bill are resolved each legislative session.

There is no timetable for the House and Senate to return from recess. As of the deadline for this story Saturday evening, neither chamber had emerged from a conference committee and reconvened.

Abortion remains legal in West Virginia following Kanawha Circuit Judge Tera Salango’s July 18 ruling issuing an injunction to stop the state from enforcing its pre-Roe v. Wade felony statute and the Legislature’s stalled negotiations on a ban.

Read the full article here.

Read our blog post detailing why access to safe and legal abortion is an economic justice issue here.

WVCBP senior policy analyst, Sean O’Leary, spoke during last Wednesday’s public hearing on the abortion bill. You can read his remarks here.

New Child Tax Credit Proposal Revealed, Includes Strengths and Weaknesses

Beginning in July 2021, most households with children had received monthly enhanced Child Tax Credit (CTC) payments of $250- 300 per child. However, the enhanced CTC included in the American Rescue Plan Act (ARPA) was temporary and expired at the end of 2021.

The impact on children and families since the expiration of the enhanced CTC has been severe. Between Dec. 2021 and Jan. 2022, there was a staggering 41 percent increase in child poverty nationwide due to the loss of the monthly payments. And as inflation continues to exacerbate family financial hardship, the need to make a robust CTC permanent is as urgent as ever.

Recently, a new proposal to expand the CTC was announced by Senator Mitt Romney. While we are excited to see bipartisan interest in enhancing the credit and while the proposal does improve some elements of the current law, it also has serious shortcomings – primarily, it does not make the full credit available to the lowest-income families (a notable divergence from the now-expired enhanced CTC that was included in the ARPA). Further, it proposes problematic offsets that would prove detrimental to low-income families.

A blog post from our colleagues at the Center on Budget and Policy Priorities provides further insight into the proposal’s pros and cons. You can read it here.

Impacts of Rising Insulin Costs Survey

The costs of insulin continue to rise while income wages remain stagnant, exacerbating pressure on individuals and families to skip or ration insulin doses in order to make ends meet.

You can help us in our fight to urge Congress to take action! If you or your family is being impacted by insulin costs or rationing, please consider completing our survey and aiding us in our advocacy– we appreciate your time and insight.

Share Your Medicaid Experience with Us!

The WVCBP’s Elevating the Medicaid Enrollment Experience (EMEE) Voices Project seeks to collect stories from West Virginians who have struggled to access Medicaid across the state. Being conducted in partnership with West Virginians for Affordable Health Care, EMEE Voices will gather insight to inform which Medicaid barriers are most pertinent to West Virginians, specifically people of color.

Do you have a Medicaid experience to share? We’d appreciate your insight. Just fill out the contact form on this webpage and we’ll reach out to you soon. We look forward to learning from you! 

You can watch WVCBP’s health policy analyst Rhonda Rogombé and West Virginians for Affordable Health Care’s Mariah Plante further break down the project and its goals in this FB Live.

Donate Today!
Icon with two hands to donate today.
Donate

Help Us Make West Virginia a Better Place to Live

Subscribe Today!
Icon to subscribe.
Subscribe

Follow Our Newsletter to Stay Up to Date on Our Progress

Thanks for reading our post 🙂

We have a great newsletter, join below:


By submitting this form, you are consenting to receive marketing emails from: West Virginia Center on Budget and Policy, 8 Capitol Street, Charleston, WV, 25301. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact