WHEELING - A new municipal sales tax in Wheeling has stumbled out of the gate, providing little more than half the revenue officials expected to receive.
Wheeling's first quarterly payment of $278,000 from the tax - which took effect Oct. 1 for most retailers - means theres plenty of catching up to do if the city is to hit its six-month projection of $1.1 million.
City officials have blamed a learning curve associated with the tax for sluggish initial collections. For example, many people think of sales tax as something tacked on when you make a purchase at a store - but services including construction and home repairs also are subject to the new surcharge.
"There's still not an awareness out there that everybody who works in the city has to pay 6.5 percent," City Manager Robert Herron said after the city received its first revenue check in January.
In Charleston - where a 0.5-percent sales tax went into effect the same day as Wheeling's - officials have reported just the opposite problem. According to published reports, some retailers located outside Charleston city limits had been charging the the tax erroneously.
Meanwhile, in Huntington, a larger city that implemented a full 1-percent sales tax on Jan. 1, 2012, collections have outpaced expectations significantly. Through its first 18 months, Huntington pulled in $8.9 million from its sales tax, $3.1 million higher than projected.
Disappointing collection figures have yet to impact the city's bottom line, but could in the coming months with tax relief for city businesses set to kick in soon. A reduction in the city's business and occupation tax rate passed the same day City Council enacted the sales tax will take effect April 1, reducing that revenue stream by a projected $1 million annually.
Initially, city officials projected annual revenue of $2.4 million from the sales tax, though they cautioned that figure was merely their best guess. Even with the B&O reduction, they said, that would leave $1.4 million that could be divided equally between improvements to WesBanco Arena and addressing infrastructure needs such as street paving and slip repair.
But if sales tax collections dont improve, the net gain in annual revenue would be only about $112,000 - a figure that would limit what the city could accomplish toward those goals.
Priorities for improvements to the 36-year-old home of the Wheeling Nailers include new seats, shoring up the leaky lobby area and upgrades to the scoreboard, restrooms and concession stands. A more ambitious request for qualified architects to design the upgrades hints at a much longer wish list, including spectator suites, a players lounge and outdoor marquee.