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Mason Levy Question Brings HB 2014 Into Focus · Commentary - TJ Meadows

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  Speaker 1: State Treasurer Larry Pack last week released a six-page analysis
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  Speaker 1: of how West Virginia's data center law, HB 2014, affects
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  Speaker 1: property taxes in Mason County. And it's generating some much-needed discussion.
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  Speaker 1: The report was written by Mark Muko, a former deputy
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  Speaker 1: revenue secretary who now works in Pack's office. When it
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  Speaker 1: comes to West Virginia finances, Muko is a guru's guru.
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  Speaker 1: His involvement gives the analysis considerable credibility. After spending the
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  Speaker 1: weekend reviewing the details, four points stand out. First, HB
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  Speaker 1: 2014 redirects future regular levy property tax revenue from covered developments,
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  Speaker 1: including money that otherwise would flow directly to local schools.
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  Speaker 1: The law captures tax revenue generated by increases in assessed
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  Speaker 1: property values above a statutory base, then distributes that money
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  Speaker 1: among county governments and designated state funds. Some of that
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  Speaker 1: revenue goes toward purposes like reducing the state's personal income tax. Second,
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  Speaker 1: schools may receive less money than they would under ordinary
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  Speaker 1: property tax rules. As property tax collections increase, state aid
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  Speaker 1: can decrease. But that doesn't mean every redirected dollar would
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  Speaker 1: be replaced. Just ask some of West Virginia's oil and
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  Speaker 1: gas counties. Their property tax bases have grown so large
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  Speaker 1: that local revenues sometimes exceed what the state funding formula
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  Speaker 1: otherwise provides. That additional local revenue can benefit their schools.
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  Speaker 1: Under HB 2014, schools don't receive the same regular levy
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  Speaker 1: increment from covered data center projects. So, the potential impact
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  Speaker 1: is quite real. Third, and perhaps most importantly for Mason
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  Speaker 1: County voters, HB 2014 preserves school excess levies. Muko estimates
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  Speaker 1: two developments could eventually generate roughly $ 90 million annually in
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  Speaker 1: additional excess levy revenue for Mason County schools. Those are
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  Speaker 1: projections based on developments taking shape over multiple years. That
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  Speaker 1: money is not yet guaranteed, but the potential is enormous.
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  Speaker 1: There's a catch, however. Mason County voters must renew their
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  Speaker 1: school excess levy on November 3rd. If the levy fails,
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  Speaker 1: the schools won't collect money. that potential revenue. You have
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  Speaker 1: to have a levy in place. And the developers won't
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  Speaker 1: owe the portion of that tax. The money doesn't go
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  Speaker 1: to another government account. It simply never gets assessed. Of course,
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  Speaker 1: failure to renew the levy affects all county taxpayers, not
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  Speaker 1: just data centers. Fourth, Governor Patrick Morrissey owes West Virginians
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  Speaker 1: a clear explanation of his law. Does the average taxpayer
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  Speaker 1: understand these distinctions? I doubt it. Do all county officials?
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  Speaker 1: Probably not. HB 2014 is the governor's baby. He championed it.
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  Speaker 1: His administration should be explaining who receives the money, who doesn't,
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  Speaker 1: and why. Especially in Mason County, where voters are facing
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  Speaker 1: a consequential levy decision. PAC deserves credit for putting these
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  Speaker 1: estimates before the public, but the governor should be leading
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  Speaker 1: that effort. My requests for comment from his office went unanswered.
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  Speaker 1: And beyond those four points lies a more fundamental question.
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  Speaker 1: Is HB 2014's diversion of property tax revenue constitutional? MUCO
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  Speaker 1: compares the law to tax increment financing, commonly called TIF.
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  Speaker 1: Both redirect tax revenue associated with increased property values, but
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  Speaker 1: there's an important distinction. Traditional TIF arrangements use that revenue
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  Speaker 1: to finance infrastructure debt. HB 2014 distributes the revenue among
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  Speaker 1: county governments and several state funds. Mason County hosts the
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  Speaker 1: development's and experiences their local impacts, while a substantial share
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  Speaker 1: of the revenue serves purposes elsewhere. Does that distinction matter constitutionally? Ultimately,
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  Speaker 1: a court may have to decide. I wouldn't bet against
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  Speaker 1: a lawsuit, but Governor Morrissey shouldn't wait for one to
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  Speaker 1: explain his law. And the legislature should not hesitate to
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  Speaker 1: revisit how the money is allocated if the evidence warrants
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  Speaker 1: a change. With two major developments underway and a school
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  Speaker 1: levy election approaching, Mason County voters deserve answers now. And frankly,
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  Speaker 1: so does the rest of West Virginia.