Manchin Wants Food Tax Relief

The Register-Herald, August 3, 2005

Aglow in a banner economic year, Gov. Joe Manchin says he wants to provide some form of tax relief soon, but how much and what approach to take are major questions facing him and the Democratic leadership.

All things considered, Manchin said Tuesday he is "very seriously" eyeing two possible avenues to travel on in September's special legislative session. One is to suspend the 6 percent tax on food one day each month for a full year. "The other rationale is to just progressively start reducing it 1 percent this year, and continue to reduce it as we grow the economy," the governor told The Register-Herald.

Either tack means the state will be looking at a $25 million shortfall over the next year, he said.

"We've had a banner year," Manchin said. "The state has had its best year in its history. We exceeded all revenue estimates. Some people say that's a surplus, but I do not consider it a surplus because we still have debt."

For instance, he was quick to remind, West Virginia's pension debt for teachers looms at $5 billion.

"And we're committed to paying down this debt," he said.

"One thing every citizen pays equally is the food tax, except for those using food stamps only."

Manchin acknowledged that Kentucky, Ohio, Pennsylvania and Maryland impose no tax on grocery bills, while Virginia recently rolled its back from 4 to 2 1/2 percent.

"I'm committed and I intend as governor of the state of West Virginia to remove the food tax during my term as governor in a responsible manner by growing the economy," he said.

"We're being more responsible in government, reducing waste in state government to be able to provide these services in a more productive manner and taking the savings and paying down the debt and continuing tax relief."

Manchin wasn't prepared to say if he definitely would ask lawmakers coming to Charleston for a special session next month on salary hikes in the public sector to provide some form of food tax relief.

"We're looking at it very seriously," he said, adding talks are in progress with Democratic leaders.

Manchin emphasized the food tax accounts for $152 million of the annual budget and expressed fears some might try to exploit for political favor with the voters any call he might make for limited relief with an amendment to wipe out the tax entirely in one full swoop.

"Some might want to whip up the people in a frenzy saying they want to help them and then it becomes a partisan issue which is very unfair," the governor said.

"That might be the only thing that would cause some concern."

But, again, he was quick to add, "This Legislature has always been so responsible. They want to do the right thing."

Manchin is continuing talks with both House Speaker Bob Kiss, D-Raleigh, and Senate President Earl Ray Tomblin, D-Logan, in an effort to find a reasonable means of cutting the food tax, or providing a once-monthly respite from it.

"Some people are saying take it all off," he said. "We're too small state. That's too large a step at one time."

Another fear expressed by Manchin is that taking too large a stride could prove ruinous if the state's economy suffered a downturn a year or two from now, and then comes the obvious reluctance to revive a tax or increase one that has been whittled in a populist move.

He pointed out that lottery revenue is expected to drop once Pennsylvania's comes on line, and if Maryland follows suit, the plunge will go even deeper.

Overall, the state has hit "a high plateau" this year, but all that could change, given all the factors at play, he cautioned.

"We're very careful in what we're doing," the governor said. "We're getting our house in very good order.

"We're going to commit ourselves to eliminating it (food tax) in a progressive manner, growing the economy and reducing state government, and paying down debts."