CHARLESTON – After more than 30 years of recommendations under Republican and Democratic administrations and weeks of heated rhetoric between Gov. Jim Justice and Republican lawmakers, West Virginia voters gave the Legislature the thumbs down for making changes to tangible personal property taxes.

Amendment 2, giving the Legislature the authority to exempt six categories of tangible personal property taxes that county governments and school systems rely on, was rejected by voters Tuesday 64% to 36% with 40 out of 55 counties reporting according to unofficial election results posted by the West Virginia Secretary of State’s Office.

Watching the results Tuesday night from the Governor’s Mansion on the grounds of the State Capitol Complex in Charleston, Justice said he was pleased voters listened to his pleas over the last two months urging them to reject the constitutional amendment.

“I think the bottom line of the whole thing is the people have spoken, haven’t they? I mean, that’s all there’s to it,” Justice said during a press conference on the back patio of the Governor’s Mansion. “We’re not here to throw mud, you know. We’ve got work to do, but the people have spoken and we need to listen to the people.”

Supporters of Amendment 2 – including Republican legislative leaders and representatives of the West Virginia Chamber of Commerce, the West Virginia Manufacturer’s Association, and the West Virginia Job Creator’s Alliance – gathered Tuesday night at the West Virginia Automobile and Truck Dealer’s Association down the street from the Governor’s Mansion to watch election results come in. The mood among Amendment 2 supporters was disappointment.

Amendment 2 was one of four constitutional amendments that failed Tuesday. State Senate President Craig Blair, R-Berkeley, placed the blame squarely on Justice for the failure of Amendment 2 and the other amendments.

“Am I disappointed that all four of them failed? Yes, but that’s going to be for the Governor to own that,” Blair said. “He’s the one that basically killed all four of these amendments. They’re all good amendments. I’m disappointed the people voted no on (Amendment 2), but I think they’re going to have buyer’s remorse once they find out that they just stopped the tax relief.”

Amendment 2 wouldn’t have automatically removed these taxes, which include taxes on machinery and equipment, inventory, and motor vehicles. It would have required lawmakers to pass legislation to exempt these tangible personal property taxes from being collected. It would have also required lawmakers to develop a plan to keep counties whole.

The combined assessment for all 55 counties for those six categories in tax year 2021 was more than $515 million according to the West Virginia Association of Counties, though the total amount of taxes collected by counties has not been made public for that same tax year. According to past studies by the nonpartisan Tax Foundation, tangible personal property taxes account for nearly one-third of the total property taxes that counties collect.

Tax study groups commissioned in the late 1990s under former Republican Gov. Cecil Underwood and in the late 2000s by former Democratic Gov. Joe Manchin have recommended the end of tangible personal property taxes on machinery/equipment and inventory. Justice, who switched from a registered Democrat to Republican in 2017, also previously supported elimination of these taxes and introduced similar legislation to Amendment 2 in 2018 and 2019.

But since then, Justice has changed from a supporter to a major opponent, choosing instead to focus on phasing out the personal income tax beginning with a 10% cut. Justice has used his bully pulpit over the last two months by hitting the road for nearly 30 stops – with Department of Revenue Secretary Dave Hardy and Justice’s English Bulldog Babydog in tow – urging voters to oppose Amendment 2.

Justice and Amendment 2 opponents – such as the West Virginia Association of Counties, the West Virginia Association of School Administrators, and state three unions representing teachers and school service personnel – raised concerns about Republican plans to backfill county and school system coffers from the general revenue budget and removal of more local control.

“As a people, we’ve said we like our Constitution. We like our rights,” Justice said. “We don’t want to have Charleston control. We want to have local control.”

Blair said Tuesday’s Amendment 2 vote will mean going back to the drawing board for how to make fundamental changes to the state’s tax system that will both benefit all residents, grow the economy, and bring new residents to the state for work.

“We will never quit working for the people of West Virginia,” Blair said. “That drives each and every one of us, Republican or Democrat. We’re trying to make our state a better state.”

sadams@newsandsentinel.com