Newell: Tax cut tops sales tax increase
PARKERSBURG – A city resident would have to spend $1,000 a week on items other than food and gasoline for a proposed 1 percent sales tax and accompanying cut on the business and occupation tax for utilities to be a losing proposition, Mayor Bob Newell said.
“You’d have to purchase that much a week to be giving more back in the sales tax than you’re getting back from the B&O tax,” he said during his message to Parkersburg City Council during its regular meeting Tuesday.
Newell presented council members with a copy of the city’s application to the state’s home rule program, which is due June 1. It includes implementation of the sales tax and elimination of the B&O on natural gas and electric, light and power, as well as manufacturing. Retail B&O would be cut by 30 percent.
The utility taxes, by law, can be passed on to customers, so elimination of them will result in lower bills. Newell said the cut will save customers $1.2 million a year, which is more than the savings if the city eliminated its police fee.
“That goes back to the citizens,” he said.
The proposal has drawn criticism from some because it removes taxes on businesses and increases the sales tax for consumers. But Newell and others have pointed out the B&O is charged whether a business turns a profit or not and the sales tax draws from a wider base, including visitors to the city.
Food and gasoline are not subject to the sales tax.
The mayor also said the city received multiple calls Tuesday from people concerned about reports of Coldwater Creek’s plans to file for bankruptcy and liquidate. The company’s East Coast Distribution Center is at the Parkersburg Business Park.
Newell noted there has been no official announcement. If the company did leave the facility, “it’s not a minor issue,” he said, but noted the Wood County Development Authority, which owns the building, is prepared to move quickly to find a new tenant.
“It would service any major entity in the country, quite frankly,” he said.
In other business:
* Council voted 6-3 to reject a pair of ordinances that would have allowed the city to hire a qualified civilian as its chief fire inspector. Only council members Kim Coram, Jim Reed and John Rockhold supported the measure.
Newell had proposed the option of hiring a civilian due to a lack of interest from firefighters in taking the job. He attributes that to the fact that even though the position pays a higher hourly rate, they can make more on a 54-hour shift at a fire station than in a 40-hour, Monday-through-Friday schedule as inspector.
Members of Parkersburg Firefighters Local 91, the union representing the city’s firefighters, opposed the change, saying a firefighter in the job could pitch in during serious incidents. They suggested making the pay more competitive with other cities to make it more appealing to department members.
Newell said after Tuesday’s meeting he had no plans to propose a pay raise, noting the job makes $500 more in a year than a captain working 48 hours a week. If the inspector picked up a 24-hour shift, as Councilwoman Sharon Lynch suggested, he would be “making a super-inflated overtime rate” working alongside people of the same rank making less, the mayor said.
Councilman J.R. Carpenter, who voted against the measure, said he doesn’t think a pay increase is necessary either, since working a 40-hour-a-week day shift also has value.
“Even in the private sector, there is a pay cut involved for time with your family,” he said.
Carpenter said he felt the job should be filled by a firefighter “so that they can ride on the truck and respond to calls if needed.”
* At a Finance Committee meeting earlier in the evening, city Development Director Rickie Yeager outlined the Community Development Block Grant and HOME Investment Partnership grant budgets, which are receiving less federal money than originally anticipated.
The CDBG entitlement dropped 3.8 percent to $784,820, while the HOME funds decreased nearly 3 percent, to $264,181. That means less of the administrative costs will come from the allotments and new money won’t be put into programs like wheelchair-accessible curb cuts and facade improvements, he said.
* Council’s Public Works Committee heard a presentation from a National League of Cities representative about a program to insure underground sewer, water and natural gas lines for residents. Committee members voted to consider whether to enter a partnership on the program, at no cost to the city, on May 20.