Eliminating the Personal Property Tax: Part 2 – What’s at Stake for Counties
(continued from Part 1 published 11/28/12)
In FY 2012, the personal property tax produced over an estimated $122 million for the 55 county governments in West Virginia, accounting for more than 30 percent of all county property tax revenue. And since property taxes account for 63 percent of county government revenue, that means the personal property tax accounts for nearly 1/5 of all county government revenue.
However, some counties are much more reliant on personal property tax revenue than others. The table below shows the amount of revenue each county in West Virginia would lose with the elimination of taxes on personal property, and its share of total property tax revenue. As the table shows, in a number of counties, personal property taxes make up more than or close to half of all property tax revenue. Each county would lose, on average, more than $2 million in property tax revenue.
|County||Revenue Lost||Share of Total Property Tax Revenue|
Source: WVCBP analysis of State Tax Dept Data
Approximately $103 million of the $122 million in personal property tax revenue was collected through the county current levy rates, while roughly $19 million was collected through county excess levies.
Losing such a large chunk of revenue would place county governments throughout the state under an enormous amount of fiscal strain. With local governments limited in what revenue they can raise, counties would struggle to replace the lost revenue. Levy rates on homeowners would certainly have to rise, but even at maximum rates, it is unlikely all the lost revenue could be replaced. This would threaten the public structures, services, and programs that enhance the quality of life for county residents, as well as the infrastructure provided at the county level that helps businesses thrive and compete.