Posted: April 10, 2013 at 8:13 pm
By Kirk Auvil, Matthew Fouty and Kelly Dugan
The many potholes pitting Morgantown’s streets and its crumbling sidewalks often shock newcomers to the city. Even city officials acknowledge that the roads, sidewalks and bridges are in desperate need of repair. But they say they don’t have the funds to improve the city’s infrastructure.
To remedy this situation, Morgantown officials have proposed levying a “user fee” on the paychecks of all workers within city limits. The fee would range from $1 to $3 out of each paycheck per week. The advantage of such a user fee is that the city council can approve such a tax by itself rather than having to win state approval to raise Morgantown’s property taxes, in what experts say would probably be a frustrating and futile fight.
But many commuters to the city are up in arms over the proposed fee.
“I do not think [a user fee] is fair,” says Heather Richards, a Morgantown resident. “I think we pay enough in taxes as it is and that should be plenty to cover anything for the city.”
The state’s average property tax rate is about .8 percent. Morgantown’s residential property tax rate is about 1.3 percent, 30 percent over the state maximum. By comparison, the property tax rate in Pennsylvania is about 1.7 percent, and in Ohio it’s about 1.8 percent.
“The [West Virginia] state constitution puts a rather severe limit on the ability of local governments to raise money by property taxes,” says Robert Bastress, a professor of constitutional law at the West Virginia University College of Law. “It does permit cities and counties to vote to go over those limits, but no more than 50 percent over the stipulated rate in the state constitution.”
Currently, property tax rates throughout West Virginia are capped by the state constitution at no more than 2 percent of property value.
Bastress says that levying a user fee would not be considered a tax and therefore not subject to the tax rate caps set forth in the state constitution, making it an attractive solution for municipal government.
However, some legal experts and workers in the city say that such a user fee is not fair and would hit low-income workers who commute to Morgantown the hardest.
“…[A user fee] operates somewhat regressively, because it’s not based on income or something to that effect,” Bastress says. “A lawyer would pay the same rate as an employee of the garbage collection service.”
Slater Williams, a Morgantown resident and delivery driver for Jimmy Johns, a local sandwich shop, says he is vehemently opposed to such a use fee.
“It just seems absolutely ridiculous [being] taxed for what I do,” he says.
Even so, other West Virginia cities have already implemented user fees. The first municipality to levy such a fee, Charleston, was challenged in a court case in 2005. The West Virginia Supreme Court ruled that Charleston did indeed have the authority to levy such a fee, pending a public vote of approval for the fee. Today the Charleston fee is $2 per week, and voters have voted to keep it in place. Huntington also adopted its own city service fee, and it has been raised twice from the initial $1 from each paycheck per week to its current $3 per week.
Interim City Manager Jeff Mikorski says other fee increases are also on the table, such as raising the city’s fire fee that all property owners in Morgantown pay to maintain the city fire department. However, Bastress says that the city council must take care to avoid tying any increases in the fire service fee to property value; otherwise it could be viewed as a property tax and cause the city to exceed state tax limits.
The user fee is the brainchild of Mayor Jim Manilla. “We have to think outside the box to come up with ways for revenues,” he says.
Mikorski likes the user fee idea because it would not be open to a public vote. He believes it could provide another steady flow of revenue for the city to fix some funding shortfalls. At present, he says, the city relies heavily on fees from construction projects in the city. But the two percent construction fee paid at the start of each new project means that if projects are derailed for any reason, it could leave the city with a revenue shortfall for that year.
Without the user fee, the city will not be able to do all of its planned repairs to streets and sidewalks this year.
“[What] we’re gonna have to do is reduce the projects we were planning to do in the spring of this year and put them into next year’s fiscal budget,” Mikorski says.