February 25, 2008
Caruth wins on corporate tax
Mannix Porterfield
CHARLESTON — Senate Republican Leader Don Caruth scored a rare triumph Monday night, convincing the full Senate to accelerate the reduction in West Virginia’s corporate net income tax.
In rapid order, the Senate also moved up for votes Wednesday bills that would create a proposed Beckley-Raleigh County Building Code Authority and block West Virginia from taking part in the federal Real ID program.
One key item appears impossible to resuscitate — a proposed 10-cent deposit on beverage containers as a means of reducing such litter along highways.
While businesses had at least some temporary reason to celebrate, so did some West Virginia seniors.
Under a parliamentary rule, Sen. John Unger’s amendment giving homeowners 65 and older a freeze on real estate taxes if their annual income is $25,000 or less remains in a Senate bill.
That rule says an amendment must be revisited within 24 hours, and the one Unger succeeded in passing last Friday wasn’t touched within that time frame.
But in a compromise Unger, D-Berkeley, worked out with the Manchin administration, the bill, off the Senate calendar for now, will be altered so that seniors cannot go back in time and collect a rebate on the higher taxes paid.
The proposed program allows them to defer taxes as a lien against their property or have a moratorium on increases imposed.
“I was very pleasantly surprised,” Caruth, R-Mercer, reflected after a voice vote approved his amendment to SB680, a comprehensive tax measure, speeding up the cuts in the corporate net income tax.
Caruth succeeded in chopping the rate to 8 percent next year, 7.5 percent in 2010, down to 7 percent in 2011, and to 6.5 percent in 2012.
As the bill was written, those rates would have fallen to 8.5 percent next year, with no reduction in either 2010 or 2011, then to 7.75 in 2013, and 6.5 in 2014.
Sen. Brooks McCabe, D-Kanawha, rigidly opposed the idea, saying the bundle approach he assembled translates into an overall $140 million rollback in taxes in this session.
Among the cuts are $15 million in the business franchise tax, $6 million in corporate net income, business depreciation by $8 million, the food tax down another $24 million, and participation in President Bush’s economic stimulus package, worth about $40 million.
“We are doing something this year,” McCabe said, firing back at GOP complaints this session isn’t helping businesses.
Caruth wanted to eliminate the franchise tax outright last week, but failed, then took the floor Monday night to denounce the McCabe plan as too little and too unpredictable for businesses to make investment plans.
What’s more, he complained, the plan leaves West Virginia at a disadvantage with neighboring states where some taxes are either non-existent or below this state’s rates.
“I think the reason we prevailed on this motion is that the Senate was convinced that we weren’t really advancing significantly in any of our tax cuts,” he said.
Sen. Clark Barnes, R-Randolph, teamed with an unlikely partner, the American Civil Liberties Union, in pushing legislation to keep West Virginia out of the Real ID program on grounds that the federal government is intruding too far into the lives of citizens by prying into financial and health records.
The proposed Beckley-Raleigh County Building Code has trudged through the Legislature for the past few winters, only to die an end-of-session death in the House.
This year, its prospects hardly seem any brighter.
A poll of the delegates in the 27th District of Raleigh and Summers counties reflected no support but many concerns, especially over the proposed appeals board.
Senate Judiciary Chairman Jeffrey Kessler, D-Marshall, portrayed the “bottle bill” as “too contentious” to put before the Senate with less than two weeks left in this session.
“It doesn’t seem to have the support truthfully on a broad basis throughout the Senate,” he said. “It requires some expenditures of state funds to start up the recycling program. I just don’t think at this late hour it’s got the momentum to move.”
For six years now, the West Virginia-Citizen Action Group has led the fight to get passage of a bill that imposes a refundable, 10-cent deposit on containers as a highway cleanup approach.
“”It’s real simple,” Kessler said. “I think we put a note in the bottle, put her afloat, and hopefully next year we’ll pick her back up.”
— E-mail: mannix@register-herald.com
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