WHEELING - Mayor Andy McKenzie on Thursday proposed increasing Wheeling's sales tax by a half-percent while scaling back its business and occupation tax - a move he said should improve the city's business climate and generate $1.4 million annually for infrastructure improvements, upgrades to WesBanco Arena and other downtown investment.
The additional 0.5 percent would bring the total sales tax in Wheeling to 6.5 percent. The tax would not apply to the sale of cars, gasoline or unprepared food.
McKenzie's proposal also would eliminate the B&O tax on manufacturing and reduce it by almost 26 percent on retail businesses, from the current 39 cents per $100 of revenue to 29 cents.
Photo by Scott McCloskey
Greater Wheeling Sports and Entertainment Authority Executive Director Dennis Magruder, right, discusses potential upgrades to WesBanco Arena following a press conference Thursday at the City-County building. Listening are Mayor Andy McKenzie, left, and City Manager Robert Herron.
With higher sales tax rates of 7 percent in Belmont, Jefferson, Monroe and Columbiana counties in Ohio and in Allegheny County in Pennsylvania, McKenzie believes Wheeling's new sales tax rate will not put it at a disadvantage compared to its neighbors. But the B&O tax reduction, he said, will lessen the problem the city faces in attracting and retaining businesses which have to travel only a few miles in either direction to the Buckeye or Keystone states, neither of which impose such a tax.
"The business community is our lifeblood. They are the ones that employ us. They are the ones that create opportunities in our community so we can afford the things that we have," McKenzie said. "We must get out of the way to allow prosperity and economic growth to happen."
Officials project collections from the sales tax will more than make up for the reduction in B&O revenue, to the tune of about $1.4 million in additional revenue per year. The city's proposal calls for half of that to be spent on infrastructure projects such as street paving, stormwater management and sidewalk and bridge repair. The other half would help repay bonds issued for up to $4 million in upgrades to WesBanco Arena and possible expansion of convention facilities at or near the arena, as well as "providing funds for other essential future economic development projects."
"Immediately those dollars will go back to the taxpayers, and I think that's very important. ... We have immediate and current needs for infrastructure investment," McKenzie said.
McKenzie believes these projects could generate between $10 million and $20 million in private investment, though he did not specify how he arrived at those figures.
Greater Wheeling Sports and Entertainment Authority Executive Director Dennis Magruder said upgrading the 36-year-old arena is essential to continue attracting quality acts. A renovated lobby, repairs to the leaky front of the building, more comfortable seating, digital sound and modern light and video capabilities are just some of the improvements he would like to see in the coming years.
"I think the worst thing about our ... building is when you walk in the front door," he said. "We don't like that. ... I think the proposal today is a good one."
Enacting a sales tax such as the one proposed Thursday is one of the powers granted to Wheeling under the state's "home rule" pilot program, which gives certain municipalities broader governing authority. McKenzie revealed his plan on the same day the state House of Delegates voted 95-3 to extend the home rule program through July 1, 2019.
A unanimous state Senate had previously passed a version of the home rule bill, but now must decide whether to accept the House's version, which includes amendments forbidding cities from enacting firearms legislation, except measures that ban firearms from municipal office buildings, or imposing user fees that would affect anyone living outside city limits.
The House bill also would open home rule to all municipalities in the state, while the Senate version would have put a cap on participation. The current program, set to expire July 1, only includes four cities - Wheeling, Charleston, Huntington and Bridgeport.
The Legislature's regular session ends Saturday. Although McKenzie is confident home rule ultimately will be extended, he believes the city has time to enact its tax plan even if the current program is allowed to expire on July 1. Any measures passed under home rule prior to that date would continue even if the program ends.
City Council plans to hold a special meeting May 14 for a public hearing and first reading of an ordinance sending the city's proposal to the West Virginia Municipal Home Rule Board for approval. A vote on that ordinance would take place May 21.