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W.Va. tax reform to be major legislative push

CHARLESTON, W.Va. — Reforming and revising West Virginia’s tax structure will be a major push for the state Legislature this year, and Monday’s interim session marked the beginning of that monumental process.

The one-day April interim session consisted of four committee meetings, including a new committee designed to look at possible tax reform in West Virginia.

The Joint Select Committee on Tax Reform was announced Monday by Senate President Bill Cole, R-Mercer, and House of Delegates Speaker Tim Armstead, R-Kanawha.

“I honestly believe the work this committee is getting ready to embark upon is singly the most important piece of legislation, the most important task ever taken up by this Legislature,” Cole said.

Armstead called creation of the committee “a continuation of a long process that started some years ago.”

Officials say three tax reform studies have been conducted in West Virginia, all of which came to the same conclusion: The current system does not work.

“We need to have a tax structure that is fair and equitable,” Armstead said. “It needs to be broad-based, it needs to address the modern economic realities, and, as we are able to do so, forecast the economic realities of tomorrow.”

Armstead called the state’s current tax system “broken, burdensome and in many ways bewildering.”

“Our tax system is unfair, it is too complicated, and it is an obstacle to economic growth and job creation,” Cole said, adding the current system is based upon an 1800’s “farm economy.”

The system has been further complicated because during good economic times the Legislature has had a tendency to offer tax exemptions “to pick winners and losers in our economy,” he said.

The committee will be co-chaired by Senate Finance Committee chair Sen. Mike Hall, R-Putnam, and House Finance Committee chair Delegate Eric Nelson, R-Kanawha.

Hall said the committee will meet May 4. Officials will begin creating a written statement on what the committee believes will be a “fair tax system” for the state. Hall said officials will look at other states’ tax systems and how they use their tax structures to attract new businesses and retain existing companies.

Legislators Monday received updates on ongoing audits, including on the Division of Corrections and an abandoned $3.5 million renovation project.

The audit looked at the renovation of the former Davis Center in Tucker County. Juvenile Services Director Stephanie Bond said officials began looking at renovating the building into a female juvenile correctional facility in 2009.

The project only succeeded in finishing the outside of the building and gutting the inside of the building before officials realized the cost of the renovations coupled with staffing issues made it unlikely the building could be used as a correctional facility.

The Division of Corrections has signed the property over to the Division of Natural Resources. A representative of DNR said the building will be used for storage as projects are completed in Canaan Valley and Blackwater Falls state parks. Legislators said they had trouble believing the DOC could invest so much time and money into a project and then just walk away.

“You just lost the $3.5 million?” said Armstead.

“Yes sir,” said Bond.

Cole voiced dismay over the project, and said state officials need to explore more possibilities with the property.

“It does strike me as incredulous that we can invest $3.5 million and not have anything that is useable,” he said. “It may serve the state in more ways than just storing stuff.”

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