Council continues budget study
WEIRTON – The clock ticks as Weirton officials continue working toward a budget solution.
City Council met in a two-hour special session Wednesday for another discussion pertaining to the general fund budget. In March, city council passed a $14.6 million budget for the 2015 fiscal year, which begins July 1. Without changes, a shortfall is expected within the next year.
The budget review committee, consisting of members of Weirton City Council and community representatives, gathered four times prior to Wednesday in an effort to reach a preventative solution to the projected $1.8 million shortfall. Council members also met in several workshops before the budget review committee was organized. The possibilities of decreased services, higher fees and taxes, new fees and taxes, or levies for select services have been among the options on the table.
The suggestion of implementing a business and occupation tax has ruffled the feathers of local business owners and Weirton Area Chamber of Commerce members. According to chamber representatives, the measure would kill jobs and virtually eliminate charitable civic donations from the business community. Several chamber members attended Wednesday’s meeting, although time was not allotted by council for public comments.
The first half of the meeting was spent whittling down the $1.8 million gap to $1.6 million by cutting department and equipment requests selectively.
Ward 6 Councilman David Dalrymple was absent from the meeting, but each of the six councilmen present vocalized a different “preferred scenario” of how to go about increasing fees and/or implementing taxes to fill the remaining gap.
Ward 2 Councilman Chuck Wright said he was opposed to making any change to the current B and O structure in place on manufacturing and banks within the city. He supports a sales tax being implemented down the road.
“The state says that to do the sales tax you must eliminate B and O completely. If you’re a Home Rule city, then they say you have to reduce it in combination with sales tax. To me that says that they know the B and O isn’t a good thing. It’s a regressive tax; that’s my opinion,” Wright said.
Using Moundsville as a benchmark, a 0.25 percent sales tax would yield about $1 million annually, according to previous workshop estimations compiled by Pat Ford, budget review committee member and executive director of the Business Development Corp. of the Northern Panhandle.
Ward 6 Councilman George Gaughenbaugh agreed he does not like the concept of the B and O either; however, he said he would support a B and O at 25 percent of the maximum rate “to get us out of this budget mess until we can get a sales tax of some sort in.”
“Not having the B and O hasn’t brought us any new business to town. It’s not a perfect tax, but the revenue you could get from one quarter of that would be enough to help us out,” Gaughenbaugh commented.
Twenty-five percent of the maximum rate for B and O would entail: 0.125 percent for retail; 0.038 percent for wholesale; .075 percent on manufacturing; 0.75 percent on natural gas; 0.5 percent on contracting; 0.125 percent on amusements; 0.25 percent on services, rentals and banking. It would generate an estimated $2,089,140 annually.
Ward 1 Councilman Ronnie Jones said he “definitely does not agree with the B and O.” He would like to see the issue resolved using other options such as raising the municipal service fee and the fire service fee or enacting a cable franchise fee through Comcast.
According to previous workshop calculations, if the residential police and fire service fee was raised from $50 to $75 per household per year, keeping proportion with commercial and church/school police and fire service fees, it would generate about $1,012,919. If the municipal service fee was increased from $2 a week per employee to $3 a week it would generate $420,000 more for infrastructure and paving. If the cable franchise fee with Comcast were implemented, it would bring in about $252,013.
Ward 7 Councilman Terry Weigel said that from what he’s heard in the community, residents are willing to help as long as everyone shares in footing the bill.
“We have to do something here to address the revenue side of this,” he said. “I think what we need is a mix of things. We can look at the police and fire service fee, the cable franchise fee and the municipal service fee also. I mentioned before in workshops I like the idea of having a B and O on contracting over a certain threshold of, say, $50,000. So when we have these billion dollar projects coming into town and when we have those out-of-state contractors expecting to pay it anyway, then we could be getting that. I like the idea of putting that money toward an economic development fund for projects like the Lee Avenue Bridge.”
Weigel noted that he’d like to see the cable franchise fee enacted at 5 percent, as well as the police and fire service fees raised.
Ward 3 Councilman Fred Marsh said the reason Weirton hasn’t seen a lot of new businesses, as Gaughenbaugh pointed out, is not because of the B and O issue.
“It’s because of the tax structure and personal property in this state. We are wedged between two different states that we have to compete with. Councilman Wright is correct; it looks like somebody downstate has realized that this tax is wrong,” he said. “On the same token, we have done so much in this town without the B and O. I’m pretty darn proud of what we did with our money without the B and O. I think we can do it again. I don’t like the one in place now.”
Marsh said he wants to adjust the municipal and fire service fees to account for inflation, which hasn’t been done in 14 years, and also put a sales tax in place.
Weigel agreed that the sales tax should be looked into for the future.
“It’s going to take some time, but the sales tax is a lot more palatable than the B and O,” he added.
Ward 4 Councilman George Ash, Sr., recalled that in 1991 he was “totally against the B and O tax.”
“I agree that it’s regressive. I was one of the four people who voted against it then. But the longer I’m in city government, the more I realize that you can’t have everything you want without everybody suffering. I like what Councilman Gaughenbaugh said. I’m willing to go with the 25 percent of the maximum rate for a B and O and raising the police and fire service fee to $75,” he said. “I initially had thought 50 percent max rate B and O, but I will compromise on that and go with Councilman Gaughenbaugh’s suggestion.”
Ash added that he would not be willing to raise the municipal service fee because of the negative impact it would have on the lowest-income earners in the city.
City Finance Director Tom Maher will be working to flesh out each one of those ideas in detail for consideration at the next special council meeting, which will be held May 7 at 6:30 p.m. in Room 201 of the Municipal Building.
Officials are hoping to have ordinances prepared to vote on before the next regular meeting of city council at 7:30 p.m. May 12.
(Dalrymple can be contacted at email@example.com)