One week ago, Gov. Jim Justice loosened restrictions on live entertainment in West Virginia to allow musicians to sing in front of an audience for the first time in over a year.
Hours later at The Empty Glass, in Charleston, a few minutes after midnight, singer-songwriter Pepper Fandango launched into a cover of “I Think We’re Alone Now,” by Tommy James and the Shondells.
“People have been dying to play,” said Jason Robinson, who books shows for the bar and has booked acts for other clubs in the past.
Robinson said they were a little worried 10 minutes before Fandango strummed her first chord.
“There were only like three or four people at the bar,” he said. But then musicians began rolling in at the top of the hour. Some stood around and listened. Others signed up for time on the stage.
Robinson said the announcement from the governor caught most everyone he knew by surprise. Only a few weeks earlier, the state began allowing live instrumental music — minus horns and wind instruments — in clubs.
A few minutes after the governor’s announcement was made, Robinson said, musicians began texting and emailing him, hoping to get work.
“I started getting bombarded by bands, which is good,” he said.
It felt like old times and a return to normal — but that’s not the case.
Paul Greco, who owns Sam’s Uptown Café, on Capitol Street, as well as The Red Carpet and Tricky Fish, on Charleston’s East End, said that while it’s great to have full bands back, things are not back to normal.
“We’re not at 100%,” he said. “Until there’s no mask mandate and you’re allowed to congregate, we are not at 100%.”
Restaurants and bars in West Virginia are allowed to operate at 100% occupancy, but Greco said the math is difficult.
People mingle at bars. They move around. They want to get up close to the stage, next to the band.
“Tables have to be six feet apart and people have to stay seated,” he said. He laughed, adding, “People want to dance.”
According to the state Alcohol Beverage Control Administration, which oversees bars and enforces COVID-19 safety guidelines, people can dance. They can also shoot pool, throw darts and axes, play cornhole and sing karaoke, according to the agency’s website.
While limited physical space as a result of continued social-distancing regulations might limit the availability of a dance floor in a particular bar or club, Greco said live music with vocals and horns is definitely welcome progress.
Robinson agreed, adding that bar patrons have been patient and generally compliant with the safety guidelines.
When instrumental music was allowed in early March, The Empty Glass booked a few performers, including Garrett Manor of Beggar’s Clan and Michael Lipton’s band, the Bark-O-Loungers.
Robinson said easing back into music with instrumental acts gave The Empty Glass time to think about how best to present acts while still adhering to the guidelines and keep people safe.
With tables, he said, The Empty Glass would be able to hold 45 people at a time.
“People still have to wear masks,” he said. “And we’re looking at ticketing shows.”
Robinson said buying a ticket would guarantee the ticketholder space in the building. Once all tickets for a particular show were sold, no one would be allowed in until someone left.
“So, if you show up at the door, you might not get in,” he said. “Or you might have to wait a while.”
Greco said his establishments are really looking ahead to warmer weather and the summer. Like a handful of other businesses that feature entertainment, including The Bucket in Dunbar and Mi Cocina de Amor on Bigley Avenue, The Red Carpet has some outdoor space.
The East End bar has a fenced-in open-air patio that’s been a popular summer hangout for years. There’s also space between Tricky Fish and The Red Carpet that Greco said he plans to use for entertainment and events.
“Things are going to get exciting on the East End,” Greco promised. “It’s going to be rocking.”
The West Virginia House of Delegates passed two industry-friendly tax valuation reform bills Tuesday by wide margins. The bills, regarding natural resources, raised concern among some lawmakers who said state tax projections estimate that they would cost counties, and school boards in them, millions of dollars.
House Bill 2493 passed the chamber on a 64-34 vote. It would exclude coal beds less than 35 inches thick from classification as mineable coal for property tax valuation purposes. It also excludes permitted coal seams from classification as active until coal is depleted under a permit for assessments made from July 1, 2022 and beyond.
The bill also instructs the state Tax Department to value coal properties based on the year preceding an assessment date of July 1, starting in 2022, removing the department’s current three-year average time frame for valuation.
House Bill 2581, which passed the chamber on a 66-34 vote, would change the methodology for valuing producing oil and natural gas wells. It would allow additional expenses that the Tax Department, in a fiscal note, said would lower the appraised value of oil and gas wells and tax collection.
The Tax Department estimated in a fiscal note for HB 2493 that it would initially reduce property tax revenue by roughly $12 million for local governments in 2022, with a change in property tax revenue in future years dependent on market conditions.
The fiscal note for HB 2581 estimated that the bill would result in an initial revenue loss of $9.1 million that would mostly affect county school boards and commissions. The department noted that some of the loss to school boards would be offset by a requirement of additional state general revenue appropriations through the state School Aid Formula.
Citing a Department of Education estimate, the Tax Department reported that the estimated cost for the state under the Public School Support Plan from the proposed bill would be $1.1 million for fiscal year 2023. That would be because of an expected decreased local share related to a decline in natural resource property values. County boards of education would lose $5.2 million from lowered tax collection that increased state aid funding would not cover, according to the estimate.
Delegates cited Tax Department estimates that the legislation would hit rural counties with small tax bases especially hard.
“Wetzel [County] has 15,436 people. They’re going to have a $1.6 million hit,” Delegate Barbara Evans Fleischauer, D-Monongalia, said, citing U.S. Census Bureau population figures. “Marshall has double that, and they’re going to double that in [losses].”
“There’s no way I could vote for this bill,” Delegate Dave Pethtel, D-Wetzel, said.
The respective lead sponsors for HB 2493 and HB 2581, Delegate Vernon Criss, R-Wood, and Delegate Dianna Graves, R-Kanawha, defended the bills, arguing that they are necessary to allow for true tax valuations. Graves said counties would still be hauling in tens of millions of dollars from oil and gas operations.
The bills will now go before the Senate.
The West Virginia House of Delegates voted Tuesday to establish an intermediate court of appeals in the Mountain State, something it had failed to do during the past five years.
By a margin of 56-44, the House adopted Senate Bill 275, which would establish a court that would hear appeals in certain cases from county circuit and family courts, as well as certain administrative appeals from the state.
In 2020, the intermediate courts bill died in a vote of 56-44.
The bill is expected to be reported to the Senate Wednesday morning. The House measure differs substantially from the bill the Senate passed on Feb. 22, so senators will have to decide if they agree with the changes made to the bill.
Among those changes is shrinking the court from two districts to one, meaning there will be three judges under the House’s proposal. The Senate had proposed six judges.
Supporters of the bill say it will create predictability and clarity in the law that will attract large, out-of-state businesses to invest in West Virginia. It also would alleviate issues with the workflow of the West Virginia judicial system, they say.
They also say it would guarantee a right to appeal in every case, even if the state Supreme Court changes its current practice of issuing rulings and opinions in every appeal that comes before it.
House Speaker Roger Hanshaw, R-Clay, left the podium to speak about intermediate courts from the House floor.
Hanshaw supported this version of the bill, saying the bulk of the state’s judiciary isn’t the Supreme Court and that the bill helps disperse the caseloads of county-level judges.
“But realize that the bulk of the work, the day-to-day function of our judiciary is done by the lower tribunals,” Hanshaw said. “It’s done by the family court judges. It’s done by the magistrates. It’s done by the trial court judges in the circuit courts of West Virginia. I’d like to see those courts be able to actually focus more on actual disputes brought by West Virginians.”
Those who spoke against the bill said the court is meant to benefit corporations and would hurt West Virginians and the state’s small businesses. They said the Supreme Court’s caseload isn’t cumbersome, and an intermediate court would do little to address other problems, including issues with roads and broadband access, hunger and the opioid epidemic.
Delegate Nathan Brown, D-Mingo, is an attorney. He said an out-of-state pharmacy corporation recently told him that his clients who were plaintiffs in an age-discrimination case should settle their case before the intermediate court is established.
None of his constituents had asked him to establish an intermediate court, Brown said.
“You never hear the talk of the need for an intermediate court,” Brown said. “What you hear routinely is the talk about roads or broadband or a drug-free workforce. If you want to move the state forward, you should focus on those three things, not on a court that’s not needed.”
Lawmakers have heard differing estimations on the cost of the court.
On March 4, House Judiciary Committee general counsel Joey Spano said the court is estimated to cost $5.7 million a year to operate. On Tuesday, House Judiciary Chairman Moore Capito, R-Kanawha, said the House had heard the “$5 million number,” but said the court would cost $3.6 million during its first year and $2 million each year thereafter.
Delegate Chad Lovejoy, D-Cabell, said the bill should be opposed because the court is one West Virginia does not need and cannot afford, no matter the dollar amount on it.
Lovejoy opposed the 2020 bill for similar reasons. This year, he said, the state’s budget is an outward reflection of lawmakers’ inner priorities.
“What we choose to spend our money on tells the people what we think is important,” Lovejoy said. “This money we’re spending here for a court we do not need is not going to help our seniors. It’s not going to help our veterans. It’s not going to help our foster children that we’ve done so much to help over the last couple years. It’s not fixing a road. It’s not going to help food insecurity or hunger.”
Under the version of SB 275 passed by the House, West Virginia’s intermediate court of appeals would have one panel of three judges. Each judge would serve 10-year terms and be paid $142,500 annually. Gov. Jim Justice would appoint the first judges to serve starting in July 2022, when the first cases would be heard. Elections for subsequent judges would be staggered, in 2024, 2026 and 2028.
Filing an appeal with the court would cost $200, and the filing fee and other fees collected by the court would go to the Ryan Brown Addiction Prevention and Recovery Fund.
The bill would allow the Supreme Court to “pluck” cases pending in the intermediate court, especially if those cases are time sensitive.
The intermediate court would consider appeals that now go to the Supreme Court, the Workers’ Compensation Review Board or the West Virginia Insurance Commission’s Office of Judges. The Office of Judges would be terminated, and the Workers’ Compensation Review Board would be expanded.
Delegates Pat McGeehan, R-Hancock, and Joey Garcia, D-Marion, spoke against the bill.
McGeehan voted against the bill, saying he is concerned about the elimination of the Office of Judges, saying the state’s existing workers’ compensation recovery process is “very important to the livelihoods of the average guys and gals in this state.”
Seven types of cases could be appealed, but not automatically, to the intermediate court:
Cases that would be automatically appealed to the Supreme Court, and bypass the intermediate court altogether, include criminal, juvenile, child abuse and neglect, and mental hygiene, as well as certified questions of law from circuit and federal courts.
After the intermediate court issues a ruling in a given case, that case could then be appealed to the Supreme Court.
Delegate Tony Paynter, R-Wyoming, a self-employed trucker said the bill would would hurt small businesses and independent workers by allowing insurance companies and big corporations to bury people in lawsuits and appeals.
“Are we here to help West Virginia’s people, or are we here to serve big businesses that may not locate here or the few that are here?” Paynter asked. “We gotta take care of the people who are here, and this does nothing close to that.”
Delegate Trenton Barnhart, R-Pleasants, said supporting the bill is a “no-brainer” because it is only going to help West Virginia.
“I tell you right now, when businesses are looking at locating places, they look at a lot of things,” Barnhart said. “They really want a state with predictability, and they want certainty. That’s not just in the marketplace; that’s in the judiciary, too. They want to know their investment will be protected and that they will get a fair hearing and a full, meaningful right to appeal.”
During a public hearing about SB 275 on March 4, representatives from the West Virginia Manufacturer’s Association, the West Virginia Chamber of Commerce and Americans For Prosperity-West Virginia spoke in favor of the bill.
Representatives from the West Virginia Coalition Against Domestic Violence, West Virginians for Clean Elections and the West Virginia Chapter of the ACLU also spoke against the bill.
On Tuesday, Jonathan Mani, executive director of the West Virginia Association for Justice called the bill an unnecessary expiation of state government.
“Today, the West Virginia Legislature abandoned core conservative values of shrinking government and fiscal responsibility,” Mani said. “Rather than spending our limited resources combating the opiate epidemic and helping abandoned and abused children, the Legislature allocated millions of dollars to create another layer of government and provide six-figure salaries for judges. Our state lawmakers put the wants of billion-dollar corporate special interests and their lobbyists ahead of the needs of West Virginia and the people who live here.”
The 2021 regular legislative session ends April 10.
A day after the House of Delegates passed its version of a bill to phase out personal income taxes in the state, the Senate Finance Committee on Tuesday introduced an amendment to House Bill 3300 to make it a tax cut on steroids. The amendment cuts $1.09 billion in income taxes initially, and then phases out the entire $2.1 billion annual revenue source in as little as four years.
The Senate plan offsets the income tax cuts with $932 million a year in other tax hikes, including raising the state sales tax from 6% to 8.5%; reimposing the sales tax on food, and legalizing and taxing recreational marijuana — contingent on federal decriminalization of cannabis.
“When I was reading this bill, I was surprised, frankly. The majority of it is about cannabis,” Senate Minority Leader Stephen Baldwin, D-Greenbrier, said of the Senate strike-and-insert amendment.
The proposal also eliminates several exemptions to sales taxes, including many for professional services. It increases cigarette taxes by $1 a pack and imposes a state hotel-motel tax of 4.3%.
Sen. Bill Ihlenfeld, D-Ohio, noted that the higher sales tax, current local hotel-motel taxes of up to 6%, and an additional 1% sales tax in home-rule cities could increase the cost of a hotel stay by as much as 19.8%. He wondered if the state hospitality industry had been consulted on the plan.
The Senate proposal outpaces Gov. Jim Justice’s income tax cut plan, which calls for an initial $1.07 billion cut to be partially offset with more than $900 million a year in other tax hikes.
Unlike the governor’s plan, the Senate proposal does not increase beer, wine or liquor taxes, does not have a tiered severance tax system and does not tax luxury items.
A breakdown of the proposal:
Under the House version of the bill, the income tax would be phased out in annual multiples of $150 million a year, with a $75 million reduction in the first year, since the legislation would take effect midway through the tax year. It does not increase other taxes to offset revenue losses.
On Tuesday, a fiscal note on the House version of HB 3300 from the Department of Revenue raised questions about whether the legislation is constitutional, since it defers to the state Tax Commissioner a number of powers, including authority to set new personal income tax rates each year.
“This raises Constitutional concerns and may be an unconstitutional delegation of legislative powers,” the fiscal note, written by Deputy Revenue Secretary Mark Muchow, states.
According to the fiscal note, the House version of the tax plan would cut state revenue by $75 million in the 2021-22 budget year, $245 million in 2022-23, $303 million in 2023-24, $502 million in 2024-25, $872 million in 2025-26, and “by increasing amounts in subsequent fiscal years.”
Also Tuesday, competing resolutions for constitutional amendments to give the Legislature authority to set some or all personal property tax rates advanced in the House and Senate (HJR3, SJR7) and will be on passage stage Wednesday.
If either resolution is adopted by the Legislature, which requires a two-thirds vote of both houses, a resolution would be placed on the November 2022 general election ballot to revise the Tax Limitation Amendment of 1932.
Adopted at the height of the Great Depression in an attempt to help residents avoid foreclosure on their homes and farms, the amendment set low levy rates for real and personal property, and locked them into the constitution, beyond the purview of legislation.
If ratified by voters, the Senate resolution would allow the Legislature to set tax rates for all classes of personal property. The House resolution initially applied only to business inventory and equipment. It was amended in the House on Tuesday to also apply to personal property taxes on vehicles.
Personal property taxes on business inventory and equipment has long been a target of the state business community.
At a House Judiciary virtual public hearing Monday, three business officials spoke in favor of the resolution, while eight speakers opposed it.
That included county officials concerned that their counties would suffer from legislatively imposed tax cuts. Property taxes primarily fund county school systems, along with county and municipal governments.
A fiscal note for the Senate resolution concluded that there’s no way to know how much revenue will be lost if the amendment is ratified until future legislatures set new tax rates.
Eliminating the business inventory and equipment tax entirely would reduce tax collection by more than $400 million.
Also Tuesday, the Senate advanced to passage stage a bill to exempt sales of small arms and ammunition from sales taxes (HB 2499). The was after rejecting an amendment by Baldwin to extend the sales tax exemption to apply to purchases of gun safes and other gun safety devices.
Baldwin said his proposal would increase what is expected to be a $1.5 million tax break by $50,000 a year.
“$50,000 for gun safety devices that will save lives,” Baldwin said. “$50,000 to keep a child from finding a weapon.”
The amendment was rejected on an 18-16 vote.