Azinger rethinking support for bill eliminating B&O taxes
Parkersburg, Vienna mayors opposed
PARKERSBURG — A local senator is considering dropping his support for a bill that would have cut the budgets of Parkersburg and Vienna by about 25 percent.
State Sen. Mike Azinger, R-Wood, is a co-sponsor of Senate Bill 132, which would require cities that implement a sales tax under West Virginia’s municipal home rule program to eliminate their business and occupation taxes within five years. For cities, including Parkersburg and Vienna, that already have home rule sales taxes in place, the deadline would be five years after the new legislation takes effect.
“I will probably remove my name as a co-sponsor as several mayors in my district have serious, legitimate concerns about how it will affect their budget,” Azinger said Friday.
B&O revenue is projected to generate $7.5 million for Parkersburg this fiscal year, nearly a quarter of the city’s general fund budget.
In Vienna, B&O generates more than $2.6 million of the city’s $11 million budget, Mayor Randy Rapp said at a recent Vienna City Council meeting.
“If the Senate or the Legislature passes Senate Bill 132 and we lose or have to reduce our B&O tax, it will be devastating to every city that participates in that program,” Rapp said. “But it is terrible … where are you gonna make it up from? We have to do these projects.”
Area cities aren’t alone.
Parkersburg Mayor Tom Joyce said 49 cities in West Virginia have a 1 percent sales tax under the home rule program in addition to a B&O tax. On average, B&O accounts for 28 percent of their budgets.
“There seems to be this misconception in the Legislature that the 1 percent sales tax was to be a wholesale replacement of the B&O,” Joyce said. “It would have been a loss for Parkersburg and virtually every other city.”
The home rule law did require cities to reduce their B&O when they enacted the sales tax. Vienna cut its B&O on retail and restaurant businesses by 20 percent, while eliminating the tax on manufacturing, costing an estimated $452,000 in revenue.
Parkersburg eliminated the B&O on manufacturing and electric and natural gas utilities and cut the rate for restaurants and retail by 30 percent. That reduced the city’s annual revenue by $2.5 million, Joyce said.
The sales tax generated much more.
In Vienna, it’s budgeted at $3,425,000 for the fiscal year ending June 30, Finance Director Amy Roberts said.
In Parkersburg, a recent budget revision set the projected revenue for the fiscal year ending June 30 at nearly $6.5 million, which Finance Director Eric Jiles said is still a conservative figure.
Parkersburg City Councilman J.R. Carpenter referenced the bill at the Jan. 25 council meeting. He said afterward that when the city passed the sales tax, there were discussions about making further reductions in city taxes and fees.
Joyce noted that in 2020, council passed an exemption on the first $500 in B&O owed by restaurants and retail establishments, service businesses and those renting or leasing real property to help businesses dealing with the economic fallout of the pandemic. That has been renewed multiple times, and Joyce said he’d like to see it continued and possibly made permanent.
“I’m going to propose that (Parkesburg) City Council make some additional reductions in B&O as part of the next budget,” he said.
“I think B&O needs to be reduced to the point it spurs economic activity, but at the same time, we have to think long term,” Joyce said, noting cities have to be able to keep up with inflation.
With its increased revenue, the city has addressed its police and fire pensions, streets and stormwater improvements and more, the mayor said.
“Anyone that says, ‘the city has extra money,’ I will say, at least in my five years on the job, Parkersburg’s been good stewards of that money,” he said.
Joyce said he hopes legislators would understand the impact elimination of the B&O tax would have on cities. If they wanted to move forward, “they need to give us some opportunity to replace that revenue with something,” he said.
The bill was introduced Jan. 12 and referred to the Senate Government Organization Committee, but no other action has been taken.
“There has been little talk of it in the Capitol so far, so it may not be an issue this session anyway,” Azinger said.
Evan Bevins can be reached at firstname.lastname@example.org.