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The bite of the food tax

August 23, 2005

Like a man who picks a snapping turtle up by its tail, West Virginia Gov. Joe Manchin is finding out that his proposal to trim the state tax on food may turn around and bite him.

Manchin wants a 1 percent cut, while others want to end it entirely now. The governor must push those who would take that drastic step to say where they would find cash to replace the $150 million in revenue that would be lost.

The governor endorsed a gradual reduction in the tax after its elimination was proposed by Don Blankenship, the president, chairman and CEO of Richmond, Va.-based Massey Energy Co.

It was Massey's opposition, in part, that helped defeat Manchin's proposal to pay off debts owed by the state's pension systems by issuing bonds.

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Blankenship opposed the move in an ad campaign, calling it a "big gamble."

Now the energy company executive would like to see the food tax eliminated and promises another ad campaign in support of that.

Manchin's plan would reduce the food tax from 6 percent to 5 percent and cost the state $25 million in annual revenues. Eliminating it completely would cost $150 million.

House M inority Leader Charles Trump, R-Morgan, told The Associated Press that the tax could be eliminated using the anticipated surplus for this fiscal year. An economy that is on the mend and a strong market for energy will do the rest, he said.

Basing a tax-reduction plan on one good year is unwise. Though the market for coal may be increasing, so is the cost of oil, which will affect every business in the state, not to mention government and every school that is heated with oil.

Ending the food tax at this point would leave the state short of revenue to deal with any oil-related shortfall. Instead of asking West Virginians for shared sacrifice as the economy rebounds, some lawmakers are promising decades of benefits based on a single year's projected surplus.

It's unwise and the roll call on this one will determine who is looking at short-term political gain at the possible cost of the state's long-term prosperity. Citizens should watch the debate closely when the special session of the Legislature begins on Sept. 7.

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