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Charleston mayor wants tax changes in city

CHARLESTON, W.Va. -- Charleston Mayor Danny Jones wants to eliminate business and occupation taxes for manufacturing companies in the city, reduce the B&O tax for retail businesses, and raise sales taxes to renovate the Charleston Civic Center.At a Tuesday morning news conference, Jones said he wants to eliminate all B&O taxes on manufacturing in city limits, and reduce B&O taxes on retail businesses from 0.5 percent to 0.35 percent.The mayor said he would ask City Council for a 0.5 percent increase in sales taxes in the city to enhance the Civic Center. Those enhancements would include a new ballroom, meeting space, kitchen renovations and more restrooms, among other things, he said.The renovations would also include the outside of the Civic Center, which City Manager David Molgaard said looks like a "state prison" now.The Civic Center renovations would cost $45 million to $60 million, Jones said.The tax changes would have the potential to generate more than $3.5 million a year, according to the mayor. Automobiles and non-prepared food would be exempt from the tax increase.The city's first tax-increment financing district, created last year to fund improvements at the Civic Center, would also contribute $600,000 a year. Tax-increment financing allows government entities to fund economic development projects, using the projected increase in property taxes that occurs because of the improvements to the district. Charleston's TIF district is an L-shape surrounding the Civic Center. Several properties within the district are undergoing multimillion-dollar improvements, including the Ramada Inn, which was formerly the Charleston House hotel. The Charleston Town Center Mall and the Chase Bank building are each planning renovations too. Developers plan to build a new Marriot Courtyard hotel within the district as well.The city's "user fee," under which the city charges everyone who works in Charleston $2 a week, would remain unchanged, Jones said.Molgaard said the tax increase wouldn't generate any excess funds besides what's needed for the project. "We're not overreaching," he said. "We don't want to ask for so little money that we can't make the improvements."The new tax plans must be approved by City Council and the state Home Rule board before they would take effect. Charleston is one of four cities in the home-rule pilot program, which allows the cities to take on expanded powers usually reserved for the state government.
The home-rule program expires in July, and the West Virginia Municipal League has asked state legislators to expand it for another five years.Jones said Charleston officials wanted to make their tax changes before the current home-rule program expires, in case a new program didn't give cities as much ability to change taxes.
The $350,000 generated from the manufacturing B&O tax "should have been eliminated a long time ago," Jones said."If someone wants to locate in Charleston, West Virginia, a manufacturer, we want to eliminate any reason they might not," he said.The reduction in B&O taxes for retail businesses would be more significant. In all, the loss in B&O taxes under the plan would amount to $2.6 million, Jones said.Ted Boettner, executive director of the West Virginia Center on Budget & Policy, said the move essentially shifts the tax burden from large corporations to mainly lower- and middle-class residents. But, he added, the improvements could be worthwhile."While tax changes will impact low- and moderate-income families and help higher-income businesses, if the increased amount of revenue is spent wisely on things to increase the quality of life in Charleston, it might be worth it," Boettner said.Improvements made to the Civic Center wouldn't be regretted, Jones said, as a refurbished arena would be a huge "economic driver" for Charleston.
"Do it for the young, it's needed for the future of the city," Jones said. "If it's ever going to be done, now is the time.""You can always find reasons to be against this," Jones said, noting no federal or state funds are available for the project. "There's not going to be money that comes from outside this area." Eventually naming rights will be sold on the Civic Center, but no one wants to put their name on the facility in its current state, Jones said.Plus, "that's a minimal amount of money," he said. "Over a 15-year period maybe a couple million dollars ... but most people who have the money to do the naming rights want a place that has a little more panache than the Charleston Civic Center."Reach Kate White at or 304-348-1723.
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