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Panhandle officials don't want 'piggyback' tax

January 22, 1999|By DAVE McMILLION, Charles Town

CHARLES TOWN, W.Va. - A statewide plan to eliminate personal property taxes on cars and property owned by businesses has some local officials worried about how they will make up for the loss in revenue.

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The move to eliminate the taxes came from the Governor's Commission on Fair Taxation, which believes the personal property tax has held back economic growth in the state.

The tax is especially tough on "capital-intensive businesses," which have to pay property taxes on manufacturing and construction equipment, said Michael E. Caryl, a Martinsburg attorney and vice chairman of the commission.

Caryl said that is the industry "that lays the golden egg for all of us."

But Jefferson County Sheriff William Senseney said eliminating the personal property tax on major industries in the state is a large loss of revenue, and he worries about small businesses and state taxpayers shouldering the burden.

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The plan allows counties and cities to "piggyback" on the state sales tax by adding a local tax to make up the shortfall, but Senseney said he doesn't like that, either.

Senseney said he is worried that increasing the state's 6 percent sales tax locally would lead consumers to cross state lines to buy goods.

Caryl has said the reforms would result in lower taxes for families making up to $50,000 a year.

Senseney said the plan would increase taxes for families making over $50,000.

"At first blush, I'm certainly not going to support it," said Senseney, whose office collects taxes in the county.

Jefferson County Prosecuting Attorney Michael D. Thompson called the plan a "boondoggle."

"Who is this reform benefiting? It's benefiting big industry," he said. "They're going to take it out of the hides of the rest of us."

Caryl said people earning more than $50,000 a year might see a slight increase in their income tax, but they must keep in mind that they will be free of the car tax.

Also, people earning over $50,000 usually itemize on their federal tax returns to take advantage of tax breaks, Caryl said.

Another advantage to the plan is that local property taxes going to school systems would be available to counties and cities, said Caryl.

About a quarter of county school systems' budgets are funded by local property taxes, but that funding would be picked up by the state, Caryl said.

"I'm very pleased with the way it has turned out," he said.

Berkeley County officials say they have not looked closely at the proposal, but they agree with Senseney that it could be tricky for counties close to other states.

"I think it will have a big impact on the tax structure," said Berkeley County Sheriff Ronald Jones.

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