Manchin has formed a team of Department of Tax and Revenue officials, and economists from WVU and Marshall University to offer proposals for his tax modernization plan.
John Musgrave, secretary of the Department of Revenue, said the governor wants suggestions on how to modernize the tax code, which was formulated in 1932.
"Gov. Manchin has directed the Department of Revenue to solicit input and to examine the tax system to make sure West Virginia is competitive with surrounding states in terms of attracting business, keeping business from leaving and providing employment opportunities," Musgrave said.
To set the stage for why these changes may be necessary, he said, the Department of Revenue released a report, "West Virginia's Economy, Budget and Tax Structure," at a seminar attended by legislators last weekend in Charleston. The report suggested that business and corporate taxes might be lowered because they are among the highest in the nation, but property taxes could be raised to better reflect the national average.
This potential tax increase has some legislators concerned.
"I certainly do not want to see anything happen to increase the burden of our citizens, as we are already heavily burdened with taxes," said Delegate Charlene Marshall, D-Monongalia.
Delegate Cindy Frich, R-Monongalia, said the state government should stay out of people's pockets.
"The more money people have in their pocket, the more they can spend; and I think people know how to spend their money better than the government does," Frich said. "Low property taxes allow people to have a decent standard of living."
The report said state property taxes are well below the national average. New Jersey is ranked number one in annual state and local property tax collections at $1,872 per capita. West Virginia is ranked 42nd in the nation at $499 per capita.
According to the summary conclusions issued in the state report, the tax burden on individuals in the state is below average for most income groups. And the less the state government collects in revenue, the less money it has for programs and services it offers the public.
The report indicates Manchin is looking for ways to increase tax revenue to cope with predicted budgetary shortfalls starting in 2009.
"I'm not aware that anything has been decided regarding the way property taxes are assessed, but everything is still on the table," said Wade Thompson, director of the property tax division at the Department of Revenue.
But Thompson said the governor's plan seeks to "reassess and analyze" state and local taxes to "create a more equitable and improved tax structure which encourages economic growth."
Tom Hunter, the governor's press secretary, said reform is necessary and that "everything is on the table."
"We're eager to see the recommendations that will come as a result of the process as we move forward," Hunter said.
Manchin's plan will not be released until late fall in a special session of the Legislature after the election.
Frich said this would be the perfect time to spring a tax increase on the Legislature. Most of the leadership is stepping down and retiring. Speaker of the House Bob Kiss, D-Raleigh, is retiring. Majority leader Rick Staton, D-Wyoming, was defeated in the primary, so his days are numbered. Minority leader Charles Trump IV, R-Morgan, is retiring.
The new leadership would not be in place until after the delegates are sworn in. There could be any number of representatives or senators defeated in the November general election.
Frich said a lame-duck special session avoids accountability and circumvents the voters, which would allow the governor to be able to do whatever he wants because the new Legislature won't be sworn in until January.
Hunter said the governor has committed to addressing tax modernization in a special session of the Legislature before the end of this year, but no timetable has been determined yet.
Frich predicts the governor will force the Legislature to swallow this legislation by eliminating debate and forcing an up or down vote.
"That's a questionable time to be making significant changes to the tax code or any law right after the election and before the new members are sworn in," Frich said.
Marshall said raising taxes when gas prices and other costs keep going up makes it difficult for people to make ends meet.
"I think any calls I receive about price increases on so many items, particularly gas prices, would be more than many of our citizens can bear," she said. "It bothers me when people tell me these things, and there is nothing I can do immediately about it."
Sen. Mike Oliverio, D-Monongalia, who is running unopposed in the November election, said he would review the governor's recommendations before he casts his vote.
"They've nibbled around tax reform for decades," he said. "If the governor puts forward a meaningful reform, I think we have to be open minded looking at that proposal."