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PARKERSBURG -- The contractors who built new Parkersburg fire stations in 2019 and 2020 paid a combined $86,960.44 in business and occupation taxes -- to the City of Parkersburg.
Under a proposal from Mayor Tom Joyce, contractors working on publicly funded projects would be exempt from the city's 2% B&O tax on the gross revenue from that activity.
"Currently, a contractor pays us B&O for a contract we're paying for," he said. "My thought process is to make those public dollars go farther."
The proposal was figured into the B&O revenue estimate for the 2023-24 budget approved last week by City Council. But it will take council's passage of an ordinance to enact the measure for the upcoming fiscal year that begins July 1.
Finance Director Eric Jiles said it's difficult to forecast a revenue amount for such projects, since they are not underway consistently each year.
"For the budget, I used an amount of about one-third of our contracting revenue, on average," he said.
That worked out to a reduction of $200,000 in B&O revenue, though the total went up overall from about $6.9 million at the start of this fiscal year to more than $7.8 million, based on inflation and recent experience. The actual amount from publicly funded contracts could fluctuate between $50,000 and $300,000, Jiles said.
"I think our budget is conservative enough to capture some variance," he said.
Joyce said the change, if approved by council, should be largely revenue neutral, at least when it comes to the city's projects. The thinking is that the reduction in tax and revenue would be met with a corresponding reduction in price.
The exemption would also apply to other public entities, such as Wood County Schools, Joyce said.
The ordinance likely won't be introduced until at least April, he said.
Evan Bevins can be reached at ebevins@newsandsentinel.com.