The Republican candidate for governor said he wants to amend the state constitution to eliminate a key tax on businesses and give local governments more authority to come up with their own taxes.
Critics, including incumbent Democrat Gov. Earl Ray Tomblin, wonder how Bill Maloney will deal with the tens of millions of dollars in lost revenue and avoid dramatically cutting services or shifting burdens to other taxpayers.
Maloney has repeatedly said he wants to eliminate the business personal property tax, which local governments collect based on businesses' equipment and inventory.
"We need a constitutional convention to get that done, and that's going to be a tall order," Maloney said last week during a televised debate. "There's some things we need to do just to start the process to make it easier for folks to invest in new equipment."
The state has carved out ways to reduce the tax for certain industries but hasn't been able to eliminate it because of a constitutional provision and because of the significant revenue it generates for local governments. Eliminating the tax has been a perpetual priority for state businesses and is also a top priority of House Republicans in next year's legislative session.
Former Gov. Joe Manchin, a Democrat, tried in 2010 to gradually reduce the tax.
He proposed a constitutional amendment to exempt new businesses or those that bought new equipment. His plan passed the House but stalled in the Senate, which Tomblin led at the time.
(While efforts to eliminate the tax do require a constitutional amendment, a constitutional convention is not necessarily required to amend the constitution).
Critics of Maloney's plan say it will meet a fate similar to Manchin's plan.
The biggest concern is for education.
Counties, cities and school boards tax businesses. Counties alone bring in about $70 million a year from business inventory and equipment taxes, according to state deputy revenue secretary Mark Muchow. About 75 percent goes to schools.
Tomblin said the state couldn't lose that much money and expect school systems to continue to operate as they do.
"When you eliminate one tax, you've got to have another one to backfill to make sure our education system continues to operate in West Virginia," Tomblin said during the debate.
In fact, the state has a school aid formula that makes sure counties are funded at a certain level. If local revenue drops, the state has to make up most of the revenue.
"It's all a shift, unless you want to cut back massively on local services beyond education," said Ted Boettner, executive director of the liberal West Virginia Center on Budget and Policy.
The state is already cutting its budget, so it's unclear where that money would come from. At the same time, Maloney has pledged not to cut state education funding.
The state's hands are somewhat tied when it comes to funding public education.
In the landmark 1982 decision that ruled state schools must be equitably funded, Circuit Court Judge Arthur Recht said the old system of relying on local taxes for education funding wasn't working in West Virginia.
"Indeed," the judge said then, "counties where children have the greatest educational needs attend school in counties which in most instances have the least taxable wealth per pupil and the fewest education resources."
Maloney argued during the debate that counties should be given more freedom to come up with their own taxes. He said, "Different cities and communities need to have more control over the way they tax."