SUMMERSVILLE, W.Va. – In recent years, Nicholas County commissioners were forced to make a series of unpleasant financial decisions as tax revenue lessened, especially the coal severance fund.
“These weren’t easy decisions,” said Commission President Ken Altizer, of financial actions commissioners needed to take over the last three years to keep the county fiscally afloat. The county’s fiscal year 2016-2017 general fund revenue budget is approximately $6.1 million, down from $7.2 million last fiscal year.
The bulk of the reduction is the decline of the coal severance tax. There’s only one remaining coal company operating in Nicholas County. Altizer explained that not too many budgets ago, the county received between $1.5 million to $1.75 million in severance tax, but the last couple years that amount dwindled to $110,000.
Under the Neoclassical Revival Courthouse here, where most of Nicholas County’s government offices are located, commissioners debated what to cut and by how much, decisions many other leaders of coalfield counties are facing.
To offset declining tax receipts, the county has taken a number of dire cost-cutting steps within the last couple years. In March 2015, two dozen employees lost their jobs and the rest had to take a 20 percent pay cut after commissioners instituted deep budget cuts. Five departments lost 24 full-time employees. The Nicholas County Sheriff’s Office was hardest-hit, with one-third of the county’s deputies losing their jobs at the time.
The commissioners also erased funding to nonconstitutionally funded offices, such as its aging commission.
However, one of the largest savings came from reducing its jail cost. In the past the county was paying upward of $110,000 a month to house inmates in Central Regional Jail. That cost, said Altizer, now runs about $60,000 a month, a saving of about $500,000 annually.
He explained this cost reduction was accomplished by increasing the county’s Day Reporting Center and not housing inmates in the regional jail who did not have a solid case against them.
With the expenses reduced, Altizer said the county is “in OK shape” financially. “There is a small light at the end of the tunnel,” he said.
Within the next two years, the county hopes the Mountain Valley Pipeline will be operational. The controversial pipeline, which is slated to run through several southern West Virginia counties, including Nicholas, Greenbrier, Summers and Monroe, will add about $2 million annually to Nicholas County’s coffers, said Altizer.
While the county school system is slated to receive about 75 percent of the additional revenue, about $1.5 million, that leaves about $500,000 for the county’s budget.
In Wyoming County, the budget is just as tight. Again, mainly because of a loss of severance tax. Tammy Sandy, the county’s budget director, estimated in the 2015-2016 fiscal year budget, the county received about $832,000 in severance tax, but the current fiscal year is projecting only $700,000. For the current fiscal year, the county’s budget is $5.4 million, down from $7.5 million last fiscal year.
“It has an impact” on the county, she said.
A copy of the county’s budget shows deep cuts to offices and programs. In 2015-2016, the county’s Prosecuting Attorney’s Office had a budget of nearly $545,000; this current fiscal year it was slashed to $475,000. The County Clerk’s Office was reduced by nearly $20,000. The Circuit Clerk’s Office’s budget was reduced from $326,000 to $289,000.
The county’s Rehabilitation of Property program was reduced from $15,000 to $5,000, which is coming from the coal severance budget.
Wyoming County Commissioner Jason Mullins said the county will survive because it has put aside funds from past years. Commissioners have discussed the downturn in the coal industry and the effects on the county’s budgets since 2008, he said. Wyoming County’s fiscal philosophy, he said, is “you can prepare for hard times, but you cannot prepare for disasters.”
Disaster might be the right word for other counties in southern West Virginia. Wyoming County’s neighbor McDowell County is trying to figure out where to uncover funds needed to rehire its six deputies laid off at the end of 2016.
“I think the sheriff has laid six off, but hopefully we can have some money to where we can bring them back,” Commissioner Gordon Lambert told media outlets.
However, before the deputies can patrol the county’s roads, McDowell County must reimburse other county workers who accepted a 10 percent pay cut last year as the budget started shrinking. According to the county’s accountant, commissioners slashed each office’s budget by 10 percent and every county employee’s pay by 10 percent, except the sheriff’s department. At a recent commissioners’ meeting, Lambert explained the other salary cuts must be restored before any additional funds can be directed to the sheriff’s department.
“If we said, ‘OK, we’re going to help the sheriff with the money we got in,’ and he hadn’t taken the cut while everybody else had taken the cut, those employees would be suing us,” Lambert told Metro News. “It would be discrimination against them.”
Counties across the state’s coalfields hope that a legislative rule that led state tax officials to lower the rate of assessed property value on equipment at idle coal mines to 30 percent for tax purposes in fiscal years 2016-2017 will spur revenue.
Jeff Amburgey, director of the State Property Tax Division, said in late December that legislative rule on valuing industrial equipment reads, if a facility (coal company) is shut down indefinitely, the property is assessed at “salvage value” of 10 percent. If the facility is shut down temporarily, the rule allows state tax department officials to decide the percentage of assessed value taxation on property in temporarily idle businesses.
“You’ll do a different technique and anticipate when it might start back up,” said Amburgey. “That’s what we did, and that’s how we came up with the 30 percent. We tried to be optimistic and say, ‘It’ll pick back up in four years,'” he explained.
Officials in Summers and Monroe counties explained last week, they aren’t dependent on coal mining for the bulk of their revenue. Both receive the coal severance, but in the current fiscal year, Summers is projecting the severance at $37,000 and Monroe $30,100, their county budgets state.
Officials in both Nicholas and Wyoming counties said their tight budgets show the need for diverse revenue sources. “We’re looking at diversifying our tax base,” Amburgey said, including tourism and timber. He said the local economic development authority is examining a number of industries to bring businesses, people and revenue into the county.
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