Participants at the West Virginia Tax Summit on Thursday said the state should cut taxes on businesses and the working poor.
But several participants said they were worried that if that happened, lawmakers would raise property taxes to replace any lost revenue.
Gov. Joe Manchin says he plans to call a special session in November to reform the state's tax system. Thursday's summit in Charleston is one of several planned meetings across the state to gather information for that proposal.
Manchin has hinted that he wants to reduce certain taxes on business, like the franchise tax or the corporate income tax, which are higher than neighboring states.
On Thursday, he told summit participants that those tax cuts would be balanced with budget cuts or new revenue.
"We're not going to write checks our children have to cash," the governor said.
One possibility raised by several summit participants was raising the state's property tax. West Virginia's property tax rates are significantly lower than all its neighbors and the 42nd lowest in the country, according to a presentation by Manchin administration officials Thursday.
Manchin has not made any decision about which taxes, if any, to raise to make up for tax cuts to business, said spokeswoman Lara Ramsburg.
"Are we looking at everything? Yes we are," she said. "Our goal is to raise revenue, reduce costs or find creative ways" to cut taxes without causing a deficit.
State Agriculture Commissioner Gus Douglass said farmers are worried that their property taxes might go up or that their farm exemption could be changed or eliminated.
Republicans said they are happy Manchin is focusing on tax reform. But they would be reluctant to support any tax cuts for business that depend on tax increases on property, said Delegate Cindy Frich, R-Monongalia.
"We want cuts to business taxes, but not at the expense of landowners," Frich said. "West Virginians value their land."
More than 200 participants came to the Charleston Civic Center for the all-day summit. Lobbyists were well represented, as were leaders from business, labor, and the faith community.
They broke into 14 small groups and came up with their own list of suggestions for reforming the tax system. Some suggestions came up repeatedly:
• Cut or eliminate the business franchise tax
• Reduce the tax on corporate income, which is among the highest in the country
• Increase the income tax exemption for the working poor. West Virginia starts taxing its workers at $10,000, one of the lowest rates in the country
Almost every group also called for reducing the size of government. That might be harder than it sounds, said Mark Muchow, Manchin's director of fiscal policy.
West Virginia ranks near the bottom in per capita government spending, he said. And because its residents are older and poorer, they demand more services such as health care, Muchow said.
More than 90 percent of the state budget goes for things most participants said they don't want to cut — public education, public safety, debt service on state pensions, and health care.
Those constraints led several participants to suggest higher taxes on alcohol, soda, tobacco and property. Some participants said they would exempt lower-income homeowners, and others would only increase taxes on land, not the buildings on it.
Still, raising property taxes, even if coupled with other tax cuts on business, would be political suicide, Frich said.
"I have serious doubts that could get through the Legislature," she said, "even in a special session after the November election."
To contact staff writer Scott Finn, use e-mail or call 357-4323.