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Revenue secretary: More people needed for road bond work


For the Times West Virginian

CHARLESTON, W.Va. — State Revenue Secretary Dave Hardy said more people are needed in the tax department in auditing, compliance and enforcement before even accounting for extra work under the Roads to Prosperity amendment.

Hardy outlined legislation on the special session call during a Monday meeting of the Joint Government Accountability, Transparency and Efficiency Committee. Hardy said in August that Gov. Jim Justice asked a group to meet to review state regulations with the goal of maximizing potential of the Roads to Prosperity program should it pass.

West Virginians approved the highways bond Oct. 7 that would create $1.6 billion in funds to upgrade the state’s roads and bridges.

Hardy said three of the bills on the special session call originated from the workgroup. One relates to what Hardy called the ACE (Auditing Compliance Enforcement) component within the state tax department.

“That’s one area you don’t want to be weak because it does generate tax revenue for West Virginia,” Hardy said.

Out of 129 positions within this component, there are 31 vacancies, he said. The compliance department is authorized for 54 positions and 15 are vacant. The auditing unit has 63 positions with 14 vacant. Enforcement has 12 positions authorized and two vacant.

Hardy said filling those vacancies should be addressed.

“The hole needs to be filled just to get the tax department out in the filed to do work they’re supposed to be doing. Add on top of that, the new workload coming from the highways program, which we all know is significant.”

The bill would allow the tax department to be given expedited permission for ACE to streamline and expedite the hiring procedures, Hardy said. Legislation would permit the DOH and tax department to submit to the personnel board immediate consideration of DOH specific pay scales.

Another bill would address the barrier between the state tax department and the DOH. Hardy said there is a legal barrier that prohibits the DOH from enforcing its ability to maximize tax collections from contracts.

Hardy said under current law, the tax department can only verify to the DOH that a tax return has been filed, not whether the tax return is accurate.

Hardy said under current law, the tax department can share information with three government entities but not with highways. He said highways would like to have this information before issuing a final payment to the contractors.

Proposed legislation would allow the tax department to enter into a memorandum of understanding with the DOH regarding the sharing of confidential information.

Department of Transportation Secretary Tom Smith told the committee his department is 500 people under quota.

“There is a history of chronic understaffing,” Smith said. “It’s a real significant issue for us as we move forward with delivering programs but I know swelling the number of public employees is an issue and we need to be careful with that. But we are not going beyond what we feel we need.”

He said the department is going to a baseline quota and these are positions that have already been budgeted. Positions available include engineers, HR staff, accountants, auditors and environmental specialists.

“The number requested is just getting back to baseline,” he said. “We have not been there for years and years.”

Alan Prunty, deputy secretary and general counsel for the Department of Revenue, said the governor appointed a workgroup to look at the West Virginia Jobs Act, which was enacted in 2011 with goals of decreasing the state’s unemployment rate and increasing per capita income. Prunty said the workgroup found loopholes in the act that he hopes to see addressed.

Prunty said one of the problems he sees is low penalties. He said currently, a contractor violating the act would be fined $100 per day per violation. Proposed legislation would increase that penalty to $250 per employee after a notice of violation is issued and then $500 per employee per day after 14 days.

He said under proposed legislation, if violations exceed 30 days, the labor commissioner would have discretion to issue a cease and desist order. If there is a continued violation, there is a provision for prosecution up to a felony charge.

Prunty said he feels penalties need to be strengthened to give teeth to violating the act.

“These are stiff penalties but $100 per day just doesn’t have teeth for enforcement,” Prunty said.

State Auditor J.B. McCuskey said he believes the state has a unique opportunity in the way it could present information on Roads to Prosperity projects.

He said what is possible now is to set up a portal that would enable people to see projects on a county-by-county level and see in real-time how bond money is being spent. This would be a clickable state map listing the roads promised to be fixed, when the money was spent, the contractor and how far along the project is.

McCuskey said in working with the Division of Highways and the executive branch, all his office has to do is link funds to a specific number so every fund that gets money from the road bond would have a specific marking enabling it to be used on the website.

“We have a unique opportunity to really lead the nation and be thought leaders in the way we present to constituents the ways government is working and spending taxpayer money,” McCuskey said.

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