Charleston City Council holds first public hearing on proposed sales tax increase

A proposed plan to raise the sales tax in Charleston under the Home Rule Pilot project to pay for improvements to the Civic Center is continuing on.

An ordinance was approved at Monday night’s city council meeting to petition the Home Rule Board to allow the city to amend its home rule plan so the city can make the sales tax change. The city is currently not allowed by law to make the change.

In the proposal, the city is seeking approval for a .5% sales tax increase. The increase would add up to around $3.5-million per year totaling anywhere from $45-$60-million to cover the costs of renovating and expanding the Civic Center possibly through the issuance of a bond.

In addition, the proposal would also eliminate the city’s B&O Manufacturing tax and reduce the B&O retail tax from .5% to .35% with a total reduction of roughly $2.6 million.

A public hearing was also held at Monday night’s council meeting to hear feedback from the community. Only one person addressed the council, business owner and Charleston City Treasurer Victor Grigoraci.

Grigoraci is in favor of making improvements to the Civic Center as well as raising the sales tax, but he doesn’t like the idea of getting rid of or reducing the B&O taxes.

He said the $2.6 million could be used in many other areas within the city.

“We have bridges, we have roads, we have streets, we have playgrounds, we’ve got unfunded liabilities of about $352 million dollars and we can perhaps help the Kanawha County Public Library,” said Grigoraci. “There’s any number of things that we could use that monies for.”

The city plans to sell bonds to help pay for the improvements and Grigoraci said they should not be giving up any money for that reason alone.

Charleston City Manager David Molgaard said the sales tax increase will make up for a portion of the lost funding from the reduction in B&O taxes and the $3.5 million balance will be available to pay for the debt service on a bond.

Molgaard said a study showed that improvements are needed at the Civic Center.

“We need to add a ballroom space as well as additional meeting space to optimize our ability to bring people into our city of Charleston,” said Molgaard.

The ordinance will have to pass a second reading at the next city council meeting before it is sent to the Home Rule Board for approval. Once approved, the city can then move ahead in putting together a proposal for actually making the sales tax and B&O tax changes, which would need to be approved by council members as well.  

All this has to be done before the expiration of the current home rule project on June 30.