UPDATE: Parkersburg Considering Eliminating B and O Tax on Public Utilities

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UPDATE 4/3/2014 4:50 PM

Eliminating the business and occupation tax might also be a benefit to people who call Parkersburg home.

The city is already modifying a proposal it made to city council just Wednesday which would now eliminate the B and O tax on public utilities.

For consumers, that would mean eliminating the surcharge they see on their monthly electric and natural gas bills.

The savings to consumers would total $1.2.

"At the bottom of those utility bills, it will typically say 'municipal surcharge'. It's close to 3% of your total gross bill," says Parkersburg Mayor Bob Newell. "It's significant for a resident, but it's also very significant for a business as well to have to pay that additional money in utilities."

The city's original proposal called for a 50 percent reduction in the utility B and O tax.

The B and O reductions would be replaced by a one percent sales tax.

City council is expected to consider the entire home rule funding proposal later this spring.

Updated: 4/2/2014 9:20 P.M.

Members of Parkersburg City Council's Finance committee Wednesday approved consideration by the full council of a proposal for consideration under West Virginia's Home Rule pilot program.

The tax plan makes no mention of eliminating city fees; notably, the much-discussed and argued $2.50 user fee. But Mayor Bob Newell says that's not completely off the table.

"The sales tax might give us the opportunity in the future to look at those fees," the mayor told committee members Wednesday afternoon. "Our main focus right now is the B&O, and the main focus of this legislation is the business and occupation taxes."

The city's proposal is to completely eliminate the B&O tax on manufacturing, while reducing it by 20% for restaurants and retail businesses, and by half for utilities such as electric companies. It says the intent is for the savings from that reduction to be passed directly on to consumers.

But the municipal income tax isn't, officials say, merely an effort to raise revenue.

"People have got the idea we're just sitting here licking our chops, and thinking we have all kinds of money in our coffers," noted Councilman and committee member John Rockhold. "That is not going to be the case. We're still going to have challenges to face for years to come."

Challenges like pensions for retiring city employees, including police and firefighters.

Another element of the proposal: consolidating the responsibilities of two agencies, the planning commission and the board of zoning appeals.

"Say (someone) needs to close an alley, because they need to redevelop and they need more space," explained Rickie Yeager, Parkersburg Development Director. "Right now, they're required to go to two different organizations and get two different approvals. So, to streamline that, it can be handled through this new organization."

A concern Parkersburg has is basing too much of the tax changes on projections. the mayor cited the consolidation of the city's two hospitals, and the resulting revenue loss which led to the enactment of the user fee.

While city council is considering legislation, the city will be publicly advertising its proposal. After a 30-day comment period, it plans to hold a public meeting on the city's plan.


UPDATE 4/2/2014 4:00 PM

Home rule.

It's an issue Parkersburg's mayor has promoted for years.

And Wednesday night city council gets its first look at the issue.

This is something Parkersburg Mayor Bob Newell has advocated for years, and particularly since the debate over the $2.50 user fee approved by city council a few years ago.

The mayor says the issue isn't just about taxes, although West Virginia cities currently are not allowed by state law to assess property or sales taxes.

Mayor Newell says it also has to do with decisions about removing old or dilapidated properties, or even when to hold the city's urban deer hunt.

If city council's finance committee approves something, it isn't the last word on joining the home rule program.

That likely would take approval of the entire city council, at a future meeting.

UPDATE 2/14/2014 5:15 PM

In the next few weeks, the City of Parkersburg should be applying for "home rule" status.

That's the program approved last year by the West Virginia Legislature, allowing designated cities to make certain decisions for themselves.

And the mayor says, contrary to opinions, that isn't limited to raising or seeking certain taxes.

"We're looking at new legislation to get rid of dilapidated properties," he says. "We may even look at something about deer hunting. Right now, we have an urban deer hunt, but state law currently tells us when to have that season."

Mayor Newell says under home rule, the city will seek to impose a sales tax, while reducing business and occupation taxes.

He says the program does not allow the city to reduce or remove the $2.50 user fee.

After a successful trial run in four cities, the state decides to expand home rule and Parkersburg wants to take part.

Mayor Bob Newell says the West Virginia Municipal Home Rule Program is a good thing and when the deadline for applications rolls around in January 2014, the city will definitely submit one.

“Home rule just allows cities to deviate a little bit from the restraints of state laws because in the state of West Virginia we don't have home rule,” Newell says. “Everything cities do basically is based on what the legislature tells us we have to.”

With home rule, the mayor says the city hopes to reduce business and occupation tax through a one percent sales tax.

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