Budget Hearing in Huntington, WV Leads to Friendly Revenue Jousting; Home Rule Amendment Stalls in Legislature

by Tony Rutherford HuntingtonNews.Net Reporter

HUNTINGTON, WV (HNN) – Anticipating a flat year for revenue, the City of Huntington budget includes eight layoffs, but the projections contain small increases in construction B & O revenue and a small projected increase in user fee proceeds.

Finance Director Deron Runyon explained at the first hearing, Thursday, Feb. 24, that he anticipates construction and utility B & O collections will increase in fiscal 2011-2012. Runyon anticipated an economic recovering slight increase in City Service Fee collections, estimating about $4.65 million dollars.

However, council member Jim Insco challenged the projection stating that the city would have to gain approximately 723 jobs.

Runyon’s estimates include about 600 jobs from Direct TV, which will move into the Fifth Street Road facility within the city limits. “We expect another 200 jobs added in the city,” Runyon said.

Insco still called the $4.65 million “a stretch” for user fee collection.

The city has , however, gained more revenue through adding new accounts and collections.

Runyon explained that “primary for profit customers” of the city’s non-profit hospitals have been added as revenue sources for city fees. In addition, about $700,000 has been collected by Bailes, Craig & Yon hired by the city.

“We believe landlords and contractors” are still ripe for addition to the city’s B & O rolls.

Based on the figures delivered, the city has since 2008 collected more than $3.5 million from past due accounts.

Steve Williams, council finance director, told Runyon, “you need to toot your horn” for that achievement.  In fact, greater endeavors on collecting what is due the city from current accounts was one of the original objections to the occupation tax in the tax reform plan.

Finally, the City received apparent ‘good news’ from the legislature.  An amendment to the pilot home rule bill which would have required a referendum for Huntington and other cities to enact taxes has stalled in the House of Delegates. The same bill would have allowed the addition of more cities to the program.

The City still must receive approval from the State Home Rule Board to implement the tax reforms that include the occupation tax, 1% sales tax and reductions in B & O taxes.

Potential revenue from the reforms has not been included in the presented fiscal 11-12 budget, as even with state committee approval , the occupation tax could face a constitutional legal challenge.  For those reasons, both the administration and council agreed not to incorporate revenue from the reforms into the budget proposal which must be approved by the state auditor by the end of March.

However, should the tax reform package be implemented (possibly by July 1, 2011), the collection of the occupation tax by ordinance abolishes the user fee.