Eliminating the Personal Property Tax: Part 3 - What's at Stake for Municipalities
(Continued from Part 2 - published 12/11/12)
In FY 2012, West Virginia's 241 municipalities collected an estimated $30 million in personal property tax revenue. While municipal governments are less reliant on property taxes as a source of revenue than are county governments, property taxes still make up around 10 percent of municipal general revenues.
While I can't break down the amount of revenue each individual municipality would lose from the elimination of the personal property tax with the data available from the State Tax Department, I can make an estimate for how much municipal revenue would be lost in a county. For example, as the chart below shows, municipalities in Barbour County (Belington, Junior, and Phillipi) would lose an estimated combined $140,720, or 41% of their combined property tax revenue.
|County||Revenue Lost||Share of Total Property Tax Revenue|
Source: WVCBP analysis of State Tax Dept Data
Approximately $24.7 million of the $30 million in personal property tax revenue was raised through the municipal current levy rates, while $5.3 million was raised through excess levies.
As with county governments, municipalities are restrained in their ability to raise revenue, making $30 million very difficult to replace. A loss of revenue of that magnitude would severely hamper West Virginia's municipal governments' ability to continue to provide services like libraries, police and fire protection, hospital care, road repair and maintenance, housing and community development, and recreation.