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West Virginia cities face budget crunch

March 04, 2001

West Virginia cities face budget crunch



By DAVE McMILLION / Staff Writer, Charles Town


CHARLES TOWN, W.Va. - While West Virginia's two biggest cities face serious budget woes, the city managers of two towns in the Eastern Panhandle said the problems could trickle down to them.

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City managers for Ranson, W.Va., and Martinsburg, W.Va., said the problems facing Charleston and Huntington are a common problem for cities in the state.

Charleston, W.Va., faces a budget shortfall of about $3.1 million and Huntington, W.Va., is expected to have a $700,000 deficit when the current fiscal year ends.

Charleston officials are considering laying off police officers and closing fire stations to make up for low revenues. Huntington was counting on a user fee to raise $1 million this year, but a judge declared it unconstitutional early last week.

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Cities are facing increasing expenses to continue providing the level of services they offer, but they are limited in the types of taxes they can implement.

Cities can only enact taxes that the state uses, said Ranson City Manager Dave Mills.

Many cities rely primarily on a business and occupation tax, property taxes and some franchise fees.

Home rule is an authority that would give cities a broad range of taxing abilities, but Gov. Bob Wise said recently he does not believe the state is ready for home rule.

Home rule is different from the Local Powers Act, a law already on the books that allows counties greater revenue-generating tools.

Although Wise said he does not favor home rule, he said he would consider negotiating over how money received from taxing video poker machines would be distributed.

Not only are cities limited in the types of taxes they can enact, it is difficult for them to grow to generate more revenue because the state's annexation laws are difficult to work with, said Mills.

Mills said smaller cities probably have not been hit by budget problems because their operations are smaller. Because small cities have fewer employees, it is easier for them to make adjustments, Mills said.

In Ranson, the city cuts corners any way it can, such as by buying used cars, except for police cruisers, Mills said.

But if something is not done to help towns generate more revenue, problems could lie ahead for local towns, said Mills.

"We haven't felt it yet. But that doesn't mean we won't feel it in two or three years," Mills said.

"It could hit any size city at any time," Martinsburg City Manager Mark Baldwin said Tuesday.

Cities face increased costs for liability insurance, city employees' health insurance, payroll increases and increases in workers' compensation.

At the same time, "revenues aren't keeping pace," Baldwin said.

The city's current financial status is "pretty healthy," said Baldwin.

The city recently increased its garbage fees and its B&O tax in an attempt to stave off any financial woes, he said.

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