WHEELING, W.Va. — City Council members believe doubling the sales tax is the final piece of the puzzle to resolving severely underfunded police and fire pension plans, so they put the final piece of that puzzle into place Tuesday by voting unanimously to increase the rate from 0.5 percent to 1 percent, starting July 1.
On a busy night, members also voted unanimously to reduce five categories of its business and occupation tax – manufacturing, retail, service, rental and financial – by about 6 percent; voted to finance a $5.6 million improvement project at WesBanco Arena; and voted to adopt Wheeling’s first updated comprehensive plan since 1997.
The original municipal sales tax of 0.5 percent went into effect Oct. 1, 2013, with a goal of funding infrastructure projects and the arena upgrades. City leaders proposed a B&O reduction at that time, but backed away from that plan in order to take a more comprehensive look at the city’s financial future – which led to discussions about the pensions and, ultimately, the additional 0.5 percent sales tax council approved Tuesday.
City Manager Robert Herron believes the B&O relief, though delayed, is much more fair to all businesses than what was originally planned.
“Originally, there were reductions in two areas (manufacturing and retail). … By taking a step back, we were able to include five areas,” Herron said.
The city originally had budgeted for $3.8 million in contributions to the police and fire pension funds this year. But that will increase to $5.3 million with council’s decision in October to close the old plans and enroll all new hires in the West Virginia Municipal Police and Firefighters Retirement System, because the city still needs to fund the closed plans in addition to paying into the state-run plan for new hires.
However, the change sets Wheeling on a path to having both the police and fire plans fully funded within 40 years, and means the city no longer will have to increase its contributions by 7 percent automatically each year as required by state law under the old system. That, officials believe, will save taxpayers millions over the next several decades.
“That’s a big jump, but over the long run, those costs will come down,” Herron said.
Herron expects the additional 0.5 percent in sales tax will pull in $2.1 million annually, while the B&O reductions will cost $600,000, for net gain of $1.5 million per year.
Only one resident, Charles Ballouz, spoke during a public hearing on the sales tax increase. He believes the tax will hurt small businesses, despite the accompanying B&O tax relief, as well as the city’s lower-income residents.
Along with adopting the comprehensive plan – the product of about two years’ worth of meetings, public input sessions and revisions – council voted unanimously to authorize the city Planning Commission to appoint an implementation committee to oversee efforts to put the plan into action. Once appointed, that committee will meet regularly and provide updates to City Council through the Planning Commission.
Ballouz also addressed council during the regular portion of the meeting set aside for residents’ comments. He said graffiti on vacant buildings downtown – particularly the former 1056 Club on Main Street and the old Peking Garden restaurant on 12th Street – has become a problem of late.
“You’re looking to turn around downtown, and some of these building are eyesores and they’re in the way of progress,” Ballouz said.