WHEELING - The city is proposing to eliminate some Business and Occupation taxes and replace them with a half-percent sales tax on goods purchased within Wheeling's limits.
Only two residents spoke at a public hearing held last week on the sales tax, and both said they don't mind paying an additional half-penny on the dollar if it means more road paving, sidewalk repair and other infrastructure upgrades.
The 0.5-percent sales tax - which would not apply to cars, gasoline or unprepared food - is expected to generate an additional $1.4 million in revenue, half of which would be allocated for those types of projects in Wheeling. The remaining half would be set aside to repay bonds for about $4 million in future upgrades to WesBanco Arena.
Warwood resident Tom Dailer addresses Wheeling City Council concerning a proposed 0.5-percent municipal sales tax.
Photo by Ian Hicks
The city also plans to pass a separate ordinance to reduce its Business and Occupation tax on retail by about 26 percent while eliminating it entirely on manufacturing and amusements.
Warwood resident Tom Dailer said he supports the sales tax proposal, noting it concerns him that the city relies on surplus revenue and federal Community Development Block Grant money to pay for infrastructure.
Wheeling typically doesn't budget for paving, sidewalk repair and bridge replacement on a yearly basis, instead waiting to see if the city has extra funds available at the close of each fiscal year before allocating money for such projects.
"I'm 100 percent in favor of the amendment. I think it's fantastic. ... Our roads are in deplorable condition, and they need that attention," Dailer said.
Also speaking in favor of the sales tax was downtown resident Charles Ballouz.
He hopes council eventually will use some of the additional revenue to replace the Manchester Bridge that had connected Rock Point Road with East Wheeling before it was demolished years ago.
"That can be a major artery once you get the sports complex completed," Ballouz said, referring to the planned J.B. Chambers Recreation Park in East Wheeling.
No one spoke against the sales tax during the public hearing.
Following the hearing, council heard a first reading of legislation asking the state Municipal Home Rule Board for permission to enact the 0.5-percent sales tax, with a second reading and vote expected during council's Tuesday meeting. If council passes the ordinance, the West Virginia Municipal Home Rule Board will meet May 24 in Clarksburg to consider Wheeling's proposal.
Assuming the board approves the plan, council would then need to hold another public hearing and pass a second ordinance actually enacting the sales tax.
Mayor Andy McKenzie proposed the tax code changes in April.
He believes a B&O tax places an unfair burden on job creators because it is imposed on gross revenue, regardless of a company's profitability.
The city would lose slightly more than $1 million in annual revenue by scaling back the B&O tax, but would gain an estimated $2.48 million from the sales tax, according to City Manager Robert Herron, for a net $1.4 million increase in annual revenue.
However, Wheeling still does not know how much of its sales tax collections the state Tax Department will choose to keep as a fee for processing the tax. The state charges 1 percent for Huntington, which enacted a municipal sales tax at the beginning of 2012, but the Legislature last month passed a bill that would allow the state to keep as much as 5 percent.
Based on Herron's projection, the state would keep $24,480 of Wheeling's sales tax collections if the fee remains at 1 percent, but it could keep up to $124,200 if it charges the full 5 percent.