Most city council members will consider new tax to update Civic Center
CHARLESTON, W.Va. -- Interviews with several Charleston City Council members indicate Mayor Danny Jones is likely to find support for his proposal to finance renovation of the Civic Center with a new city sales tax.
Jones unveiled the proposal Tuesday. He is also pitching cuts in the city's business and occupation tax and hopes the net yield will be $3.5 million a year to use for renovations to the aging Civic Center.
The 0.5 percent sales tax would be levied on all items sold inside the city except for non-prepared food and automobiles. It would be in addition to the 6 percent state sales tax.
East End Democrat Marc Weintraub said he was very supportive of the plan.
"I think the mayor has looked long and hard for other funding to renovate the Civic Center," Weintraub said. "I think he has come up with the most practical solution to this problem."
At-large Democrat Mary Jean Davis also supports Jones' plan.
"The main thing is we need to upgrade the Civic Center," she said.
Jones said Wednesday his plan is a viable way to fund the much-needed renovations to the Civic Center.
The facility is too antiquated and small to accommodate some conventions, he said. That means less money for local businesses and less city tax revenue.
He said a renovated Civic Center would attract larger conventions with more attendees, who would in turn spend more money in local shops and restaurants.
Councilman Andy Richardson, an at-large Democrat, said a better economic climate would lead to more jobs.
"I view this as a jobs bill and a stimulus for downtown," Richardson said.
He said he wanted to look at the proposal further but so far thinks it's a good idea.
"It's a half a percent sales tax," Richardson said. "And any tax burden comes with challenges.
"But I think the stronger our convention and visitor business is, the stronger our retail sales will be."
Convention business is an economic engine for Charleston, said Jama Jarrett, vice president of operations and communications for the Charleston Convention and Visitors Bureau.
In 2010, 59 groups held conventions and events here, Jarrett said.
A renovated Civic Center would allow the city to grab even more business, but doing nothing would mean more money slipping through the city's fingers, she said.
Jarrett said the city lost about $28 million in convention business over the last several years because the Civic Center was not large and modern enough to fit the groups' needs.
Councilman Cubert Smith, an East End independent, wants more time to analyze the issue before he takes a stance.
"This was just announced yesterday," he said. "I need to look at it closely."
Smith has often opposed Jones' initiatives. In this case, he said he understands that "it takes tax dollars to run a city."
"A city can't run on grants forever," Smith said.
Smith recently went to a West Virginia Municipal League meeting where he heard Huntington Mayor Steve Williams discuss how that city is dealing with its financial difficulties.
Huntington enacted a 1 percent sales tax during former Mayor Kim Wolfe's administration. The tax went into effect on Jan. 1, 2012.
Williams is a Democrat while Wolfe is a Republican.
Smith said he was impressed with what Huntington was doing to address its financial problems.
East End council member Robert Sheets said a sales tax was regressive and would hit the poorest city residents hardest.
"I think this tax is very unfair for seniors, those on disability and people making minimum wage," he said.
He also isn't happy with the other leg of Jones' proposal — cutting retail business and occupation taxes from .5 percent to .35 percent. The plan would also eliminate B&O taxes for Charleston manufacturers.
"That's a Republican proposal," he said. "That's cutting the taxes for the wealthy and taxing the poor. I believe we need to work on reducing B&O taxes, but you shouldn't raise the taxes on the poor."
He suggested the city raise its 6 percent hotel/motel tax to pay for Civic Center renovations. He suggested doubling it or at least bringing it to 10 percent.
Jones said this wouldn't work because the state Legislature sets the hotel/motel tax for the state.
Charleston leaders can impose a city sales tax under the Home Rule Pilot Program if the state's Home Rule board approves.
But that program expires June 30, and state leaders have told Jones any extension of the program will include legislation that prohibits cities from imposing new taxes.
Therefore, Charleston must act quickly.
"If we don't do this (city sales tax), there will be no way to fund the renovations," Jones said.
Jones said higher hotel/motel taxes would discourage convention planners and that would defeat the purpose of renovating the Civic Center.
Sheets disagreed. He said lodging taxes in other cities are higher than in Charleston.
However, the 6 percent sales tax is higher or equal to the tax in two other cities that compete with Charleston for convention business, according to Jarrett.
The rate in Asheville, N.C. is 4 percent and in Greensboro, N.C., 6 percent.
But the rate in Jefferson County, Ky., where Louisville is located, is 14.5 percent.
Sheets said Charleston could raise funds by holding bingo games at city community centers. He pointed out that some fire departments in the state raise large amounts of money through bingo and raffle.
"It's a way of raising alternative revenue instead of taxing the citizens of our city," Sheets said.
Councilman Mike Stajduhar, a West Side Republican, said Sheets' lodging tax suggestion was not realistic.
"If you raise the hotel/motel tax rate, it makes Charleston less competitive when we try to grab some of this convention business," Stajduhar said.
He said Jones' proposal is not regressive because it exempts groceries.
"A half cent tax is something that most people won't even notice," he said.