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Statehouse Beat: After failure of inventory tax repeal, time to look at bigger tax picture

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I’m pretty certain I’ve never seen leadership in either house lose two major pieces of legislation in back-to-back weeks, as happened to Senate President Mitch Carmichael and company in the collapse of bills to end the state subsidy for greyhound racing, and to phase out the personal property tax on manufacturing equipment, machinery and inventory.

The latter seemed doomed for a number of reasons, including: having Senate Democrats stay united as a bloc to vote against it; opposition from county commissioners; general reluctance to raise taxes in an election year, even though this particular plan was portrayed as a tax shift; and just the sheer difficulty of amending the state constitution.

The whole affair had a slapdash feel to it. Knowing that it would be a tough sell to convince voters to amend the constitution to repeal business taxes, leadership threw in a repeal of personal property taxes on motor vehicles as a sweetener, without coming up with an adequate explanation of how that would avoid blowing a hole in county budgets.

To make up $200 million of the lost $300 million, they sought to shift tax burden to those least able to pay, through an increase in the regressive sales tax, and steep increases on tobacco and vaping products.

(That they tried to pitch the latter as a wellness issue, after years of fighting cigarette tax hikes and failing to fund tobacco cessation programs, didn’t seem authentic.)

Shortly before SJR 9 crashed and burned on a 18-16 vote (five short of the 23 votes needed for adoption), Senate Republicans held a news conference urging support for the resolution, in what seemed to be a true act of desperation.

I asked what I thought was a reasonable question, that if we’re going to go in and remove personal property taxes from the state constitution after 88 years, why not also take out real property taxes, which — as noted here a few columns ago — are locked in at artificially low rates, much to the current delight of out-of-state absentee corporate landlords.

To which Senate Finance Chairman Craig Blair, R-Berkeley, said: “We’re not in the business of looking to tax the people of West Virginia more. We’re Republicans, for God’s sake, we’re in the business of running government more efficiently.”

Well, maybe in the business of taxing certain West Virginians more.

Given the certainty that the manufacturers lobby will be back again seeking the inventory tax repeal, an interim study might be in order.

Rather than piece-mealing removal of some property taxes from the constitution while not removing others, would it not make sense to look at moving all property taxes back into state Code, and having an academic analysis of which taxes are much lower than neighboring states, as well as which taxes may be uncompetitively high?

Ultimately, the fairest tax shift could be to lower or eliminate some personal property taxes, while raising real property taxes a little, putting the burden on those most able to pay, instead of those least able, through regressive sales tax increases.

•••

There was an interesting House floor debate last week on a bill that would have required state vehicle inspections every two years rather than annually. It turned out to be a real microcosm of how Republicans and Democrats view the world differently. The bill was rejected on a 51-48 vote.

Republicans’ arguments included: 1. Government as a nanny state, that people are smart enough to maintain their vehicles without being forced by the government to do so; 2. Benevolent capitalism, garages will throw in free inspections as part of oil changes or other routine maintenance.

Mostly, though, the focus was on the lack of trustworthiness of people in general. From the Republican perspective, everyone is running a hustle: Drivers steal inspection stickers or borrow tires to get an otherwise unsafe vehicle through inspection; auto shops either pretend to do a thorough inspection since there’s no profit motive in inspections, or they scam car owners by finding phony problems to repair at high additional cost.

For Democrats, there was just one issue, public safety. It was noted more than 160,000 vehicles a year flunk the state safety inspection, mostly for bad brakes and/or tires. The message was that people are basically good, even though some may not have enough money to afford a new set of tires, and that the state should do what it can to assure their well being.

•••

I might have to skip out on the session briefly next week, as the state Ethics Commission on Thursday will take up this request for an advisory opinion from Gov. Jim Justice:

“The governor asks (1) whether he may use state aircraft to fly from Lewisburg to destinations outside of Charleston on official state business, and (2) whether he may participate in campaign activities following his state work and before his return flight provided that the primary purpose of the travel is for official state business and there is no additional use of the aircraft for campaign-related travel.”

(After all these years, it never ceases to amaze me over the frequency with which governors coincidentally have official state business in the same localities on the same days as they have campaign events scheduled.)

It was pointed out to me the request is particularly interesting in that Justice asks whether it is ethical for him to fly state aircraft from Lewisburg to destinations where he has official state business (and by coincidence, campaign events).

Speculation is that, if the Ethics Commission gives its blessing to the arrangement (as it undoubtedly will do), that gives Justice an official vote of confidence when residency issues come up, if not in Delegate Isaac Sponaugle’s state Supreme Court challenge to compel Justice to live in Charleston, then in the campaign, when opponents inevitably raise the residency issue.

•••

Finally, my invitation must have gotten lost in the mail, but I’m advised that there was a big bash at Edgewood Country Club last Saturday to celebrate former Gov. Gaston Caperton’s 80th birthday.

Hosted by sons Gat and John, luminaries in attendance included U.S. Sen. Joe Manchin, state Treasurer John Perdue, Lloyd Jackson, Judy Margolin, Tom Heywood, Mike Basile, Andy Richardson, Kay Goodwin and Federal District Judge Joe Bob Goodwin, Sam Sutton, Joe Carey, Otis Laury, Nick Sparachane, Richard Adams, Betty Chilton, Susan and Trip Shumate, and Department of Environmental Protection Secretary Austin Caperton.

The celebration included a greeting via video from former President Bill Clinton, who was governor of Arkansas during Caperton’s first term.

Reach Phil Kabler at philk@wvgazettemail.com, 304-348-1220 or follow @PhilKabler on Twitter.

Funerals for Thursday, July 2, 2020

Adkins, Anne - 6 p.m., Roush Funeral Home, Ravenswood.

Morton, Freda - 11 a.m., Hafer Funeral Home, Elkview.

Nunn, Terry - 7 p.m., Good Shepherd Mortuary, South Charleston.

Olive, Rex - 2 p.m., Hafer Funeral Home, Elkview.

Reynolds, George - 2 p.m., Dodd & Reed Funeral Home, Webster Springs.

Rhodes, Ella - 4 p.m., Waybright Funeral Home, Ripley.

Rose, Carol - 10 a.m., Cunningham Memorial Park, St. Albans.

Waldron, Helen - 1 p.m., Forks of Coal Cemetery, Alum Creek.

Wibberg, David - 11 a.m., St. Anthony Catholic Church, Charleston.