WESTON — On a recent weekday, nearly two dozen kids gathered around a multicolored ABC rug in the Louis Bennett Public Library, filling the space with chit-chat and laughter. Everyone listened intently as a library clerk in a pirate hat enthusiastically read “Where’s the Pirate?” Then they walked across a cardboard plank.
The Lewis County library, the only one in a county of about 16,000, plays an important role: lending books, DVDs and Wifi hotspots, as well as organizing programs for local kids and adults. But it all hinges on the tireless efforts of one full-time employee, three part-time employees and a handful of unpaid volunteers. And funding cuts — 13% since 2016 — have made their work harder.
It’s impossible to fairly compensate staff, said Library Director Katrina Johnson.
“The girls, they work so hard for what they do. I can’t give them what they should earn,”
Johnson said. “We can’t compete with Walmart and stuff like that.”
The Louis Bennett Public Library isn’t unique in this regard.
Libraries are struggling throughout West Virginia. Nearly a quarter of the state’s 55 counties have had their library funding cut over the past five years. And even if they’ve avoided these cuts, threats loom on the horizon.
Most of West Virginia’s counties — 40 of them — have increased the proportion of their library funding that comes from local taxes. This November, West Virginia voters will decide whether state lawmakers can eliminate some of the personal property taxes that contribute to that funding stream.
If voters approve the Property Tax Modernization Amendment, state lawmakers can choose to eliminate personal property taxes paid on business inventory, business machinery and equipment, and personal vehicles. That would cost counties approximately $515 million in lost tax revenue, according to estimates from the West Virginia Association of Counties.
Money from these taxes mainly funds public schools and local government services – including libraries. If these taxes were fully eliminated, Lewis County could lose over $3 million from its annual budget – almost 17 times the library’s 2021 operating income.
State lawmakers have said they’ll work with counties to make up for any missing revenue. But they haven’t said where they’ll find it. For already struggling libraries, this could be one more punch in the gut.
What we stand to lose
Many West Virginia libraries are used to doing more with less.
When Barbara Fields, acting director of the McDowell Public Library, first started working there 11 years ago, there were 11 employees. Six were full-time. Today, there are two full-time employees, and one part-time employee.
“We have to be custodian. We have to be everything,” Fields said. “Whatever has to be done, these three people have to do it.”
They used to buy 200 to 300 books at once. Now they buy 25 to 30. Although they still run book clubs, a coloring club, a music club and summer reading programs, attendance has plummeted.
Counties that have increased the portion of their library funding coming from local taxes. Graphic by Ellie Heffernan.
Counties where the libraries have had their budgets decreased. Graphic by Ellie Heffernan.
McDowell County already had to cut library funding by more than a third since 2016. And if state lawmakers eliminate certain personal property taxes, the county is estimated to lose over $4.3 million.
“I know libraries are important if they’re used right,” Fields said. “We have a West Virginia room upstairs that has materials that other places don’t even have — other libraries don’t have.”
The room preserves pieces of McDowell County history, including books by local authors and equipment donated by now-shuttered local hospitals.
State lawmakers have assured local governments they don’t need to worry about funding key services, such as libraries.
In an emailed statement, three of the property tax amendment’s co-sponsors said officials have already started talking about how to cut taxes without harming county services.
“One such meeting took place just this week as part of our interim committee meetings,” wrote Delegates Trenton Barnhart, Chuck Horst and Don Forsht. “The entire Legislature has a vested interest in making sure our localities and their services are kept whole because if they’re not, those burdens remain our budgetary problems to solve.”
But many of the Legislature’s options could disproportionately harm poor and middle-class West Virginians, even though the amendment has been framed as a measure that will help everyday people.
When state lawmakers proposed a similar plan to cut personal property taxes in 2020, their solutions to make up lost revenue included increasing the sales tax and the tobacco products tax. That plan failed when a key resolution died in the state Senate.
Poor and middle-class people pay a higher percentage of their income in sales taxes, and cuts to property taxes on machinery, equipment and inventory largely benefit wealthier corporations, their customers and shareholders. So, this move would have canceled out benefits for everyday people, according to the West Virginia Center on Budget & Policy. Only the richest West Virginians would’ve received net tax cuts.
The amendment on this year’s November ballot has also been framed as a measure that will help everyday people. But like the 2020 proposal, most of the tax cuts – over 70% – would benefit businesses.
Proponents of the measure say West Virginia’s current tax on inventory, machinery and equipment is hurting economic growth.
“This issue is something we’ve been asked by all levels of the business community and our constituents to address for many years, and our hands have always been tied,” wrote Delegates Barnhart, Horst and Forsht. “We know West Virginia is one of just a few states still applying this tax to inventory, machinery and equipment, and it’s a real obstacle to capital investment here.”
Most states still tax some of these categories of personal property. And states without these kinds of personal property taxes usually have higher real estate taxes, so taxpayers pay about the same anyway, said Sean O’Leary, senior policy analyst at the West Virginia Center on Budget & Policy.
There’s also no formal research to support the claim that tangible personal property taxes hamper economic growth. Ohio recently repealed this tax, and the state didn’t see sizable growth in manufacturing employment or investment, O’Leary said.
One study suggested this repeal actually incentivized businesses to automate.
Manufacturing employment in Ohio is, on average, 19,300 jobs lower than it would’ve been if this tax hadn’t been eliminated, according to estimates made by researchers from Indiana University Bloomington and the University of Colorado Denver.
“Look who we’re giving that tax break to — largely out-of-state businesses that are not even located in West Virginia,” O’Leary said. “When we use the property tax, we’re keeping some of this resource in West Virginia. The history of West Virginia is our resources flowing out of the state. And we’re paying for schools, police, fire, libraries, and all the good things that people like.”
Where’s the money?
If voters approve the amendment to let state lawmakers eliminate certain personal property taxes, and lawmakers do it, the big question for libraries and other county institutions is where those lawmakers will find hundreds of millions of dollars to replace that tax revenue.
Although the West Virginia Association of Counties does not yet have an official position on the amendment, its expectations of lawmakers are clear.
“We want to go forward in a good-faith effort. Now, that being said, we want to see that backfill in perpetuity,” Jonathan Adler, the group’s executive director, said during a June 12 meeting of the interim Joint Standing Committee on Finance. “And if the numbers, the math doesn’t work, as we get down this process, then I don’t know that we can be supportive of it.”
Even the 2020 plan to raise the sales tax wouldn’t have fully compensated for revenue lost. After six years phasing out certain personal property taxes, there would’ve been over $88 million in missing funds.
State lawmakers didn’t suggest any backfill funding ideas when the amendment was discussed during the June 12 meeting. The closest they came was asking the West Virginia Association of Counties for ideas, after the organization presented data on the money counties would be projected to lose.
Adler said he didn’t know of an effective, easy solution to replace the personal property tax money, although raising sales taxes was an option.
“The problem with counties is we’re very limited in what revenues we can raise. The property tax is a huge bulk of that,” Adler said. “And so by losing that or having that taken away or at risk, that’s just another kind of narrowing of our avenues that we have.”
When asked which specific funding streams lawmakers were considering, West Virginia House of Delegates spokesperson Ann Ali said there’s no official plan yet.
“It’s too early to have any plans for county budgets and how the state may fund them,” she said.
This uncertainty is especially troubling for places like McDowell County, where Fields says libraries are already struggling to meet requirements for state funding. State library funding matches local library funding, up to a certain threshold. If libraries can’t meet that local funding requirement, their state funding gets cut too.
McDowell County’s libraries have been hit particularly hard by this requirement. Its population has plummeted from over 50,000 in 1970 to approximately 18,000 in 2020, according to census data.
That decline, largely caused by the departure of coal, has left fewer businesses and residents to pay the taxes that sustain the county’s libraries.
“McDowell County is one of the poorest, if not the poorest counties in the state. And it’s like we are being punished for not being able to meet our portion of funding. So our [state] funding gets cut,” Fields said. “We have four branches. And I know we have been told to try to tap into these other cities to see if they could help us with our funding. But you can’t squeeze blood out of a turnip.”