Earlier this month, the West Virginia Manufacturers Association (WVMA) released a report in support of Amendment 2, which would give the state legislature the authority to exempt business machinery, equipment, and inventory from property taxes. While the WVMA claims the report bolsters the case for Amendment 2, it contains several flaws and misleading assumptions that call into question its conclusions. Our new blog post provides five major takeaways from the report:
1. The report does not account for the negative economic and jobs impacts of reducing local revenue. While it talks about potential economic growth by modeling the impacts of a hypothetical business locating in the state due to the elimination of business personal property taxes, it completely ignores the negative impacts of losing $515 million in state and local revenue that funds public services.
2. The report misrepresents West Virginia’s personal property tax. It claims the tax is a “six percent tax on manufacturers’ inventory, machinery, and equipment.” In reality, West Virginia’s property tax rates vary by locality, with all capped at well below six percent in the state constitution.
3. The report falsely claims that West Virginia’s industrial property tax makes us an outlier. It perpetuates a myth that West Virginia is unique in taxing business machinery and equipment, when the majority of states have machinery and equipment personal property taxes.
4. The report fails to show evidence that industrial property taxes are hurting West Virginia’s economic growth. In addition to misrepresenting the actual tax rate and comparisons to other states, the report’s economic impact analysis simply assumes the tax is hurting growth, instead of analyzing its economic impact. Actual data has shown that there is no clear evidence that property taxes on machinery and equipment are harmful to growth and that eliminating the tax can actually lead to manufacturing job losses.
5. The report hints that new taxes that fall more heavily on West Virginians will be needed to offset losses. While not explicitly stated, it implies that the revenue losses under Amendment 2 should be made up via higher real residential and commercial property taxes and/or higher sales taxes – both of which fall much more heavily on West Virginia residents and local business owners than the potential tax cuts under Amendment 2.
Learn more in Sean and Kelly’s full blog post.
Take action to educate your friends and neighbors about how dangerous Amendments 2 and 4 would be for our schools, local public services, and communities. Update your profile picture across your social media platforms to one from our digital toolkit!
Amendment 2, 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 2 would result in local governments losing control over 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.
As we approach this November’s election, county commissions across West Virginia are increasingly coming out in opposition to Amendment 2. The latest commission to do so was the Marion County Commission. A recent article provides further details. Excerpt below:
The Marion County Commission has joined with numerous other counties and municipalities across West Virginia to oppose Amendment 2.
Wednesday at its meeting, the commission voted 2-1 to sign a resolution cementing the county’s opposition to the controversial constitutional amendment that will be on the ballot in November.
Amendment 2, also known as the Property Tax Modernization Act, would remove personal property tax rates regarding business inventory and machinery as well as the motor vehicle tax from the state constitution and hand control to the legislature.
The legislature has already made clear that it plans to completely cut those taxes given the opportunity.
Were the taxes removed, county budgets could be cut by up to 27 percent. The taxes also pay for levied programs like public libraries, the transit authority, and the county school system, all of which could lose sizeable chunks from their budgets.
The legislature has assured any organization affected would be “made whole” through other means, but a concrete plan hasn’t been presented to the public.
The County Commission’s resolution comes a week after Fairmont City Council approved a similar resolution and both the West Virginia Association of Counties and the County Commissioners Association of West Virginia passed resolutions as well earlier this month.
The most sound critique of the amendment and the legislature’s promise to make budgets whole through the general fund is that most mockups done by the state use data from the finances of the last two years, which are muddied by the influx of federal funds sent in a COVID relief.
According to the West Virginia Center of Budget & Policy — a Charleston-based think tank that has studied the potential impacts of Amendment 2 — between 2010 and 2019, there was not a single year where the state’s budget could support filling the gaps left by these potential tax cuts.
Read the full article.
In addition to depriving counties of much-needed revenue, passage of Amendment 2 would lead to significantly reduced school system budgets across the state. For example, Ohio County Schools stand to lose $7 million annually – nearly 10 percent of their annual budget. Learn more here.
On October 18th, starting at 6pm, community members will gather at the Racine Volunteer Fire Department to learn more about what’s at stake for Boone County if Amendment 2 passes this fall.
Find the Facebook event here.
Learn more about the potential impacts of Amendments 2 and 4 here.
The fourth annual Food for All Summit is a place to learn about the decisions that state and federal policy makers are considering that affect both food access and farm viability. Come learn, build skills, and develop policy-changing ideas!
The event will take place on November 16 from 10am-4pm at the Brushy Fork Event Center (929 Brushy Fork Road, Buckhannon, WV 26201).
Please refer to the event landing page for updates on the event itinerary, speakers, and more. There is no cost to attend. Breakfast and lunch will be provided, but registration is required.
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.
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.
