Legislators weigh in on grocery tax reduction
West Virginia is one of just 10 states that imposes a sales tax on groceries and Governor Earl Ray Tomblin wants to eliminate the tax completely -- one step at a time.
The Legislature first imposed the grocery tax in 1934 to offset state constitutionally-mandated limits on property taxes.
Governor Jay Rockefeller pushed through elimination of the tax in 1981, but Governor Gaston Caperton re-imposed it at six percent in 1989. Under Governor Joe Manchin, the grocery tax was reduced from six to three percent.
In the State of the State address on January 12, Tomblin described the tax as "unfair and regressive" and proposed reducing the grocery tax to two percent.
"Several years ago - in a responsible manner - we moved toward removing this regressive, unfair tax," he said. "And while we do not have the capability to remove it all at this time - I believe we can make this fiscally responsible reduction. It is this type of broad tax relief that will help our working families, our seniors, and all those trying to make ends meet. Every little bit counts."
The Governor told business owners at Kanawha City Foodland on January 18 that the tax hurts grocery stores near the state line, where shoppers have the option to buy groceries in neighboring states with no grocery tax.
Tomblin's office estimated a one percent grocery tax reduction would reduce state revenues by $26 million annually.
Senator Clark Barnes (R-District 15) said the reduction in revenue should be balanced by a reduction in spending.
"I've always been a supporter of reducing and eliminating the food tax," he said. "Food is a basic necessity of every individual and it's something that I really don't feel should be taxed."
"The state needs to cut expenses," he added. "Even though our population continues to stay stagnant in West Virginia, government continues to grow. We have a situation where we absolutely have to stop the growth of government and then we won't have to worry about the taxes on things like food.
"Right now, they're touting about a $260 million budget surplus and the sad part of that is that the Legislature usually finds a way to spend it and often does it in a manner that it's going to cost you that much next year and the next year and the next year in perpetual programs."
Barnes noted that the state government added about 1,000 new jobs in 2010, as job losses continued in the private sector.
Delegate William Hartman (D-District 37) said he supported the one percent reduction, but that the state's long-term debt made this year's budget surplus seem less auspicious.
"I'll vote for it," he said. "We've got budget surpluses, which I guess we can be proud of, because most states are really having a tough time, but we have a tremendous amount of pension debt that we keep putting on the back burner and thinking we can take care of at another time. But I support the reduction without question and I think that it will pass."
Hartman said some legislators likely would oppose the tax reduction because of the large pension liability.
The Pew Research Center reported in 2010 that West Virginia's total pension debt is almost $5 billion, only 64-percent of which is funded -- far below the 80-percent that the U.S. Government Accountability Office says is fiscally responsible.
Delegate Denise Campbell (D-District 37), said she was leaning toward supporting the grocery tax reduction.
"I support helping our taxpayers so that they can have a little more money," she said. "Of course, then you have to wonder -- what will you have to do to offset that?"
Campbell said increasing food costs would factor into her decision.
"We all know that when we go to the grocery store, every time you go, everything's gone up in price and your bill when you check out is considerably higher," she said. "I am in favor, really, of the food tax cut."
According to the U.S. Department of Labor, grocery prices have increased 2.1 percent over the last year. In January, grocery prices increased 0.7 percent, the largest increase since 2008. The U.S. Department of Agriculture (USDA) estimated that food prices will increase another two-to-three percent in 2011.
As legislators debate the need for the grocery tax, recent reports show that many residents of the Mountain State suffer from hunger and poor nutrition.
A 2010 USDA report ranked West Virginia as one of two states with the greatest increases in food insecurity. The report defines food security as consistent, dependable access to enough food for active, healthy living. According to the report, an average of 13.4 percent of West Virginia households experienced low to very low food security between 2007-2009.
A 2009 Robert Wood Johnson Foundation/Trust for America's Health study reported that 31.1 percent of adults and 35.5 percent in age group 10-17 in West Virginia are overweight. The study found that rising food prices could worsen the state's obesity epidemic, making it more difficult for families to afford healthy foods.
The Centers for Disease Control and Prevention reported that only one in five West Virginians eat fruit or vegetables five or more times a day.
In 2008, the U.S Census Bureau reported that 17.4 percent of West Virginia residents live below the poverty level. In 2009, the bureau calculated that more than 108,000 West Virginia senior citizens live below the poverty level.