Newell corrects error on taxes

PARKERSBURG – Mayor Bob Newell said he misspoke Tuesday when making a comparison between the amount people would pay on a proposed 1 percent sales tax and how much they would save from a business and occupation deduction.

But he maintains it’s still a good deal.

During Tuesday’s Parkersburg City Council meeting, the mayor said someone would have to spend $1,000 a week to pay more on the sales tax than the savings they would see from the elimination of the B&O tax on gas and electric utilities.

He meant to say a month.

Newell was defending the proposal against criticism that it gave tax breaks to businesses and collected more money from residents.

The B&O tax on utilities is charged at a rate of $2.80 per $100 for electric, light and power and $2.35 for natural gas. Those fees are passed along to customers on their bills, but if they’re eliminated – which the city is proposing to do in its application to West Virginia’s home rule program – the utilities could no longer collect that amount.

In an email to the newspaper Wednesday, Newell said he based the figures he outlined Tuesday on the utility B&O tax elimination, which is expected to reduce the city’s revenue from that source by $1,235,431.

“There are approximately 12,350 bills for fees sent out in the city limits each month,” he said.

That averages out to roughly $100 a year per customer, Newell said.

A 1 percent sales tax, which would be implemented with the B&O cuts, would collect $100 from every $10,000 someone spends on taxable items, not including food and gasoline, Newell said. That would represent $1,000 a month of spending on those items for 10 months- not a week.

Actually, it would take $12,000 to equal out to $1,000 a month. Newell said he used a rough comparison based on his own utility rates, where he pays about $10 a month, but acknowledged some people’s bills could be lower.

Regardless, the B&O cut will mean $1.2 million going back to the taxpayers, Newell said.

“That’s still significant,” he said.