By Derek Tyson, The Welch News Editor
WELCH, W.Va. – At a special meeting Wednesday, the McDowell County Commission sounded the alarm to County officials that budget woes loomed on the horizon.
Recently, the Comission restored 10% of each county office budget that had been deducted before the onset of the COVID-19 pandemic.
This year, that 10% was restored with help of $206,195 from American Rescue Plan (ARP) funds. The problem addressed before all in attendance was one, ARP funds are finite and are not replenished; and two, projections indicate that McDowell County is expected to lose $155,252 in tax revenue this year and again, and again.
“If we hadn’t had the American Rescue Plan funds to back this up, our budget for this year would have been $155,242 short from what we had last year,” said County Commission President Cecil Patterson. “All other sources of revenue remain comparable to last year. If all budgets remain the same for the upcoming budget, it will require a transfer from ARP of $361,437 just to stay where we are at today.”
“Our coal severance is what we pay our utility bills with, and different things. We’re not allowed to pay salaries with this money. But even coal severance taxes seem to have decreased slightly to around 350,000 from 400,000 before,” continued Patterson.
To add even more troublesome weight to a shrinking budget was a recent letter from State Auditor J.B. McCuskey, reading:
“To the honorable Commissioners of McDowell County,
In reviewing Regional Jail statements, we have discovered that your County is more than 60 days past due on your payments. Since this is a legal liability of the County, we feel this issue must be addressed before we can accurately review your levy estimate. We would like for you to explain your plans to bring this account to current status and please let us know how you plan to resolve this issue.”
By backfilling the 10% budget cut, Patterson explained that they would only have enough money to cover the current year and only half of the next one.
“Because the ARP money is a one-time deal. We haven’t got the second round of funding yet but it’s a one-time deal. When it’s gone, we’re going to go back to the budget we had. Less the 10% budget we just gave back, plus the $155,000 (we’re projected to lose). We usually lose 100,000 a year because there is no economic development in McDowell County.”
Patterson turned the discussion over to elected county office holders, asking if they could spare anything from their budgets to help overcome to the inevitable deficit in the near future.
“Elected officials, I know you all have asked for things. Is there anything you can do without? Our jail bill is 2 million dollars and we have to address it. If we pay it, we’re broke. The State and Senate has said there would be help and everyone in the State owes this, but they have more income and can address it little by little. If we address it, we’re going right back to where we were,” said Patterson.
“The Assessor assesses property and tell people what their home is worth, businesses too. The Sheriff collects the taxes. What are your collections at? 90%? Can you collect more? And Don Hicks pays the bill. All we do is tell you what’s left. That’s all we do,” continued Patterson.
“Is there any way we can start making payments to them,” asked Commissioner Michael Brooks.
“We can but how fast will this ARP funding and our savings run out? In a year and a half, it won’t be a 10% budget cut in this County. It’ll be a 40% budget cut in this County. I want everyone to understand where we’re at. Do we band together and beg the Legislature to help us? Is there anyone that can help us,” said Patterson.
“What’s Clay County doing,” asked Prosecuting Attorney Brittany Puckett. “They are similarly positioned like we are in Clay and Webster County. I know we’re not the only county that has these issues.”
Patterson assured the other counties either had a higher revenue to budget expenses or not as many expenses to cover.
Sheriff James Muncy Jr. said his tax office was in close contact with Wyoming County.
“Cindy (Thompson) is hand-in-hand with Wyoming County. They’re not any different than us. They don’t have a higher revenue, they are in the same class with the same tax base. There Sheriff’s Office budget is 3 times what ours is now,” said Muncy. “If I’m going to address the monkey in the room, I would pay the jail bill. It has not been paid since 2019. It started out at $58,000 and now it’s well over $2 million. Who’s fault is that?”
“I think we need to get on our legislators to make it so the state is responsible for these jail bills,” said County Assessor A. Ray Bailey. “If the counties can’t afford to pay the bill, then the Sheriff won’t be able to arrest anyone because the County can’t afford the bill.”
“I think that was looked at during this legislative session but of course it failed. Everyone else can get a bailout, but the counties cannot get any help. It was in a bill but it didn’t make it out of the House or Senate,” said Puckett.
Citing shuttered businesses on the rise in McDowell County, economic development was the only thing Commissioner Patterson felt could offset the lack of revenue.
“How are you going to have economic development if you keep cutting law enforcement. Nobody is going to come to this county,” said Sheriff Muncy in reference to large amount of drug related criminal activity.
McDowell County Circuit Court Clerk Francine Spencer asked if a payment schedule could be arranged for the regional jail bill.
“Why are we not paying something? Every little bit helps,” said Spencer.
Patterson shifted back to the former 10% budget reduction, saying they had just came out of a financial hole made possible by ARP funding.
“We’re not out of the hole because we suddenly had an influx of a million dollars worth of taxes. We’re out of the hole because of COVID. If it wasn’t for COVID, we would still be holding bills,” said Patterson.
Sharing his experiences as a brand new Commissioner entering the fray, Patterson said he nearly had a stroke when he first glanced at County ledgers against incoming bills and payroll expenses. He was told it was a common practice to hold bills.
“We know whose bill we can hold and they know we’ll pay them in due time. That’s how I came onboard to this Commission. When I got here, we were holding $200,000 to $300,000 in bills and then when taxes were paid, we started paying it back,” said Patterson. “There’s no one in here that’s done anything wrong. We’re managing something that is less, and less, and less, every year. Our tax base is losing $100,000 to $150,000 a year. It just goes down, it does not come back.”
“Has the (regional jail) bill been paid? No. But if he thinks it’s bad with eight, nine, or ten deputies, he would have six. Ray Bailey would have five people in his office. Don Hicks would be down to 3 or 4. Ms. Spencer’s office is running at rock bottom already,” continued Patterson. “Have we made some mistakes trying to manage it, probably. It’s like juggling a ball and right now everyone in here is elected just like us but the responsibility will ultimately fall to this table. If no one back there is willing to give, then we’ll make decisions up here.”
County Clerk Donald Hicks said his office had gone from ten employees down to five. Sheriff Muncy said the Office had 18 deputies when he first began in 2009. Only 9 are employed today.
When asked if the Sheriff’s Tax Office could collect more outstanding taxes, they reported they collect in the high 95% percent of total amounts due already. Anything after that is usually sold during the Sheriff’s Tax Sale.
“We couldn’t even get the Governor to pay his taxes last year,” said Cindy Thompson. “The Governor wouldn’t pay them and I sold them all at a land sale. Over 130 pieces were just his alone.”
When asked if the Assessor’s Office could generate more revenue, Bailey replied that you can’t raise taxes on homes that are falling down.
“We can’t raise the taxes because people can’t afford to pay them,” said Bailey.
“We just don’t have the revenue to support it,” said Commissioner Cody Estep. “It’s simple. It’s no one’s fault. The revenue just isn’t here people, just look at it.”
“Then I would look into other counties in similar classes to see what they are doing, because we’re doing it wrong,” said Muncy.
“To satisfy the Auditor’s Office, I know there’s no way we can pay even half that amount, but what are we looking at for a resolution,” asked Puckett.
“That’s what we’re going to decide today. I just want everyone to be aware of where we’re at,” said Patterson.
“Do they want 10,000 or 100,000,” asked Puckett.
“Ms. Wimmer will start on that in the morning,” said Patterson.
LouVinia Collins shared her experiences in Steven’s Correctional Facility’s accounting department and an outstanding medical contract bill in excess of 2 million dollars.
“We sat down with them on a telephone conference to work up a payment plan and now we’re caught up with them,” said Collins.
“You caught up with them after we paid the payment off and you got an extra 80,000 dollars a month,” said Patterson. “See, you got an increase in your budget. We’re not getting an increase in our budget.”
“That took like a year and we finished paying it off during COVID, when we lost prisoners and everything because we adhered to that payment schedule,” replied Collins.
“But that’s because you got an extra source of revenue,” said Patterson.
Sheriff Muncy suggested using the ARP money to pay off the regional jail bill, to which Patterson asked him where the County would stand next year.
“Why are we worrying about next year when we’re worried about today also. Let’s take care of today then worry about next year,” said Muncy.
Commissioner Brooks felt it was best to enter a payment agreement with the Regional Jail for the time being, then call on any help that might be available in Charleston to help offset the expenses.
“We’ll agree to a payment and commit to it, then hopefully get some resolution on the state level,” said Brooks.
Regional jail expenses are generated upon every arrest made by law enforcement in McDowell County. While awaiting sentencing, the accused can either be released on a bond or else they are transported to the Regional Jail system to await their trial. The County Commission is responsible for the expenses unless the accused is convicted with a felony charge, in which case the State would reimburse the amount.
To help offset regional jail expenses, the Alternative Sentencing and Adult Drug Court, and Southern Highlands’ Law Enforcement Assisted Diversion program help to rehabilitate participants without jail time. Prosecuting Attorney Brittany Puckett said these alternatives were being utilized more in recent times.
Patterson asked if the McDowell County Holding Unit could be utilized more to help offset the Regional Jail costs as well, but the Sheriff insisted it would fill up in just two days and require prisoners to be transported out.
“Well the Holding Unit costs the County $300,000 a year, we could use that to pay the bill,” said Patterson. “It’s designed to hold them for 2 or 3 days so they can get their bonds worked out. That’s not working.”
“But if Boomer arrests someone at 2 o’clock in the morning, without the Holding Facility, he has to drive them to Logan,” said Puckett.
“We know we have a Holding Facility that costs us money to operate, but we’ve done it because it’s the right thing to do,” said Patterson. “Then why didn’t we pay the bill? We could’ve made some adjustments, but would we have hurt the county by making them? (Closing the holding unit) is one of the things that we could have done, but would you have not been in here screaming? You would and you should, I’m on your side on this. We’ve just tried to do what was right for this county and for this county to have the best it could have with what we had to work with. And that’s how we’ve dug a hole for ourselves.”
“We still have to provide for the citizens of this county no matter what the revenue is. I just want everyone to know that if we backfill these budgets, in a year, this thing is going to take a hit like no one has ever seen. Economic development is all that can pull us out. There aren’t many new coal mines going in. It’s not going to happen overnight, the roads will help us out but we’ve got to stitch it together until then,” continued Patterson.
Any other potential boons to County tax revenue died in the latest Legislative session, such as an increase in Homestead Tax Exemption rates. The population of McDowell County is estimated as nearly 70% qualifying for the exemption, according to county officials.
“But those people deserve that. They have worked and paid their dues or are disabled,” said Patterson. “They deserve the homestead exemption. But we need housing, we need something to compensate for what we are losing.”
Ray Bailey explained that property tax amounts aren’t generated by individual value but a collective average value across the community.
“If a house beside you sells for $200,000, and we’ve got it assessed for $50,000, we can’t raise the price on that house,” said Bailey. “If you win the lottery and build a $20 million dollar home, we have to assess it for what the average is in the community. If you try to assess it for what it sold for, they call us chasing sales. So we have a problem with that.”
“But we need to be talking to our Congressman, the House of Delegates and Senators. Years ago when the counties up north didn’t have any money, what did they do, they put the coal severance tax on coal. And they used that money to develop the state of West Virginia. We’ve got the counties up north with all that gas now, we need to talk to our legislators and have a natural gas tax that’s divided up among all 55 counties. They could use that to help with these jail funds,” continued Bailey.
“They had an opportunity a few years ago to do that, but unfortunately, our people that represent McDowell County didn’t seem like they fought for it against the gas companies. This state was built on the backs of a lot of coal miners from McDowell County. If it weren’t for what came out of our hollows, they wouldn’t have what they have today,” said Brooks.
“Then if they won’t do that, why don’t they do away with coal severance tax and let the (coal-producing) counties have it all.”
Don Hicks urged a stronger push to have rental properties springing up across McDowell County properly assessed, a goal currently being addressed by the McDowell County Convention and Visitors Bureau.
Commissioner Brooks said rental owners have attempted to avoid paying fees for their business by not advertising through platforms such as AirB&B. He also noted an improvement in the situation since CVB Director Jennifer Justice had been working on the issue.
Sheriff Muncy offered Deputy assistance to the Assessor’s Office and the CVB to help identify rental locations currently not paying dues.
Don Hicks also suggested bidding out County-owned property, including property deemed in the flood plain with the understanding that Army Corps of Engineers policies must be strictly upheld and will be enforced.
“Bid the property out, you’ll make a little bit and the property will generate tax revenue again,” said Hicks.
“We’ve talked about this before but it’s never been moved upon. I think we need to make it a priority and get these lands, bid them and put them back in the hands of the people,” said Commissioner Brooks.
Commissioner Patterson returned to the subject of economic development in the closing minutes of Wednesday’s special meeting.
“But let’s not put all of our eggs in one basket,” said Missy Nester, The Welch News Publisher. “Because I’m afraid we’re already doing that.”
“With the price of gas rising, if it goes to 5 or 6 dollars, we’ll have less people coming here to ride,” said Patterson.
“I noticed a trend at the beginning of COVID where out-of-state owners sold off their property due to shutdowns. I fear the same thing could happen due to gas prices,” said Nester.
“We need a factory, or something that brings 100 jobs. Someone will come to work at it. We just need to get that tax base built,” said Patterson.