Revenue Sharing and the Future of The Monongahela National Forest

David E. White

National forests occupy more than a million acres of West Virginia land, or about seven percent of the state's total land area and 19 percent of the total land area in the 13 West Virginia counties where national forests are located. The largest of these, the Monongahela National Forest, consists of approximately 900,000 acres stretching over ten counties. More than half of Pocahontas County (51 percent) is in the Monongahela National Forest (hereafter referred to as the Forest).

Although federal lands are exempt from local property taxes, the federal government compensates local governments (counties) for this loss of potential revenue by making two types of payments. The first, known as 25 Percent Funds, consists of 25 percent of the proceeds from the sale of commodities and services in the Forest that occur within that county (16 U.S.C. 500). About 72 percent of these proceeds result from the sale of timber, 20 percent from oil and gas receipts (the only minerals currently sold from the Forest) and the remainder from grazing fees, recreation user fees, and other miscellaneous receipts.

The second payment, known as a payment in lieu of taxes (PILT), amounted to about 75 cents per acre in 1994 and is scheduled to increase to $1.65 per acre by 1999. Collectively, these payments compensate counties for the loss of property tax revenue and for any other losses or disadvantages suffered as a result of federal ownership of the land.

The extent to which local governments should be compensated for the presence of federal land has been the subject of frequent debate and numerous studies, mostly in relation to federal land in the West (Clawson and Held 1957; Fairfax and Yale 1987; Huebner et al. 1985; Powell and Greber 1991). In recent years, increased pressure for additional recreation and other non-timber use of federal lands have suppressed timber sales on many national forests, including those in West Virginia (Hackworth and Greber 1988). For example, timber sales in the Monongahela National Forest are substantially short of the potential yield. The Forest Service recommended the approval of a Forest management plan in the early 1980s that called for a long-term sustained yield of 165 million board feet per year. This plan was ultimately rejected because of widespread opposition to its emphasis on timber sales. The management plan finally adopted, the one currently in place, calls for a long-term sustained yield of 85 million board feet per year (U.S. Forest Service 1986). This reduction in timber sales, in turn, significantly reduced the amount of revenue that could have gone to West Virginia's counties from the 25 Percent Fund.

In the meantime, West Virginia has undergone a statewide reappraisal of property values, adopting new methods of natural resource appraisal and tax administration that promise to result in greater property tax revenues from private land. This has caused the basis against which the federal government's PILT program must be measured for compensatory purposes to increase. The combination of lower 25 Percent Fund payments and a higher level of property taxes foregone because of federal land ownership raises questions concerning whether existing Forest payments are currently equivalent to property taxes on private land and whether they will be equivalent to those taxes in the future. While it may be in the public interest to give greater priority to the Forest's recreational uses than to its timber sales, the suppression of timber sales causes both the U.S. Treasury and West Virginia's counties to lose potential revenue because recreational uses tend to produce little direct revenue (USDA Forest Service 1986).

In response to these growing concerns about the adequacy and composition of in-lieu payments, Congress enacted P.L. 103-397 in the fall of 1994. It raises the PILT payment each year from 1995 to 1999, when the annual payment will be $1.65 per acre, an increase of 120 percent over the five years. In addition, the Act specifies that PILT payments are to be adjusted each year to reflect changes in the national Consumer Price Index (31 USC Sec. 6903).

This article attempts to accomplish the following four goals. First, it determines the amount and the historical trend of Forest payments to West Virginia's counties and their relative importance in county finance. It then compares Forest payments for 1993 with 1993 property taxes that would have been collected if the land were in private ownership to determine if federal payments were more, less or equivalent to the amount of property taxes lost as a result of federal ownership of the land. Third, it determines the effect of P.L. 103-397 and its higher PILT payments on county revenue by comparing PILT payments for 1993 with those of 1999. Finally, it analyzes the impact of changing land use on Forest payments by comparing future, prospective payments to West Virginia's counties under the Forest's current management plan with two alternative management plans.

Forest Payments in West Virginia

Forest payments to all West Virginia counties in 1993, from both the 25 Percent Fund and the PILT program, totaled $1,836,220. 25 Percent Funds constituted about two-thirds of total payments ($1.2 million) with timber sales accounting for about 72 percent of that amount ($864,000). The PILT program provided West Virginia's counties with $626,160 in 1993. Pocahontas County received the greatest amount of payments ($642,430), followed by Randolph County ($421,330) and Greenbrier County ($210,550).

The trend of Forest payments is distinctly upward. Payments increased at an annual rate of six percent per year from 1981 through 1993, or about one-half a percentage point greater than the rate of inflation (USDA Forest Service 1993, 1994). The upward trend was caused primarily by increases in commodity prices, especially timber prices. Timber volume harvested in recent years has been relatively stable at about 35 million board feet, or less than half of the volume projected in the Forest Plan.

Forest payments in 1993 were equal to 10.8 percent of the general revenue funds of the ten affected counties and 9.4 percent of their total receipts (see Table 2). Forest payments in these ten counties varied from less than 1 percent of general revenue funds in Barbour.County to 41.3 percent in Pocahontas County.

Property Taxes Foregone Compared With Forest Payments

The amount of property tax per acre that would have been collected from the land in the Monongahela National Forest if it were in private hands is presented in Table 3. Amounts were calculated for timberland and oil and gas lands (the only minerals currently sold from the Forest). A total Class III natural resources property tax (combining the amounts for timberland and for oil and gas lands) was computed and compared to existing Forest payments.'

Potential mineral taxes were estimated by converting Forest oil and gas income to an appraised value using standard West Virginia appraisal procedures .

In 1993, the average federal Forest payment exceeded the average natural resource property tax on a per acre basis in Pendleton, Pocahontas, Randolph, Tucker, and Webster counties. They received more federal assistance than they would have generated from private ownership of the land either because they have relatively low potential for hardwood timber production or they have belowaverage property tax rates. Barbour, Grant, Greenbrier, Nicholas and Preston counties received less federal assistance than they would have generated if the land was in private ownership in 1993. This relatively high degree of variability from county to county is due primarily to the relatively large variation in county levy rates.

Federal Forest payments for the Monongahela National Forest as a whole were 7 percent greater than potential natural resource property tax on a per acre basis ($2.02 per acre compared to $1.88 per acre). Nicholas and Preston counties suffered the greatest deficit, receiving federal payments of $1.31 and $1.27 per acre, respectively, less than what they could have received if the land were in private ownership. Tucker County, on the other hand, enjoyed the greatest benefit, receiving 63 cents more per acre than what it would have received if the land were in private ownership.

Although it could be argued that the federal government should reduce its total Forest payments to West Virginia's counties by seven percent (to equal the amount those counties would have received if the land was in private ownership), it cannot be assumed that all the land that is now part of the Forest would remain Class III timberland if it were turned over to the private sector. It is likely that at least some of the land would be converted to uses that produce more revenue than natural resources. Parcels located along roads and lying on the periphery of cities and towns, for example, have the potential for commercial, industrial and residential uses that generate more tax revenue than timberland. The last column in Table 3 shows the amount of property tax revenue each county generated from its land held in private ownership in 1993. It suggests that Barbour, Grant, Greenbrier, Nicholas, Preston, Tucker and Webster counties would receive substantially more revenue than they currently receive from the federal government if Forest lands were converted to private ownership and those lands were converted to uses typical in that county. Pendleton, Pocahontas and Randolph counties would receive less.

It is reasonable to conclude that, on a per-acre basis, overall federal Forest payments in 1993 were about equal to potential natural resource property taxes but less than potential total county property tax revenue. A study of federal forest payments in Western Oregon came to the same conclusion forthat state (Powell and Greber 1991). It is also apparent that each county's levy rate plays a major role in determining if the federal Forest payment is more than, less than, or equivalent to the amount of property taxes foregone resulting from having the land in federal ownership.

The new PILT legislation will result in substantial increases in annual Forest payments to West Virginia counties. Total PILT payments will increase from $626,150 in 1993 to about $1,377,500 in 1999 (see Table 4). At that time, Pocahontas County will receive over half a million dollars annually in PILT payments, and its total Forest payment could be in excess of $1 million. Unless West Virginia raises the property tax on timberland in the near future, the prospect is that future Forest payments will exceed revenues from timberland taxes by a large margin.

Long-Term Comparison of Payments with Property Taxes

Since both federal Forest payments and county property tax receipts are subject to change over time, a valid analysis of the tax equivalence of payments must cover an extended period of time. This was accomplished by determining the present value of anticipated returns to West Virginia's counties through the year 2030 under the current Forest management plan and comparing these amounts with the present value of potential property tax receipts for the same time period if the land were held in private ownership. The discount rate used to determine present value was 4 percent .3 The higher PILT payments resulting from P.L. 103-397 are incorporated in the present value calculations.

The Forest's current management plan was developed pursuant to the National Forest ManagementAct of 1976. Through an intricate planning process that included extensive public involvement, Monongahela National Forest personnel come up with a series of alternative plans during the early 1980s, denoted here as Plans A through E. Plan E was labeled as the "preferred" alternative by the Forest Service because it appeared to best meet the efficiency and equity criteria established beforehand. Following a period of critical public comment, some controversy, and further study, a sixth plan (Plan F) was finally presented and adopted. Plan F, which is in effect now, placed a greater emphasis on recreation use and less on timber production than Plan E.

The methodology employed to determine the present value of Forest payments and potential property tax receipts is available on request from the author. Refer to Scientific Article No. 2489, West Virginia Agricultural and Forestry Experiment Station, West Virginia University.

Each of the alternative plans contained assumptions and projections that enabled the planners to estimate the returns to the U.S. Treasury and to county governments from 1980 to 2030. These projections can be used to make long-term comparisons between the federal Forest payments to counties and foregone property taxes by calculating the present value of the future stream of both payments and property tax revenues.

In nine of the ten counties, the present (1994) value of the future stream of federal Forest payments exceeds the present value of the future stream of natural resource property taxes, in some cases by more than 100 percent (see Table 5). The present value of federal Forest payments for all ten counties combined exceeds the present value of natural resource property tax receipts by about $23.6 million, or 75 percent (Table 5).

The greatest difference on a percentage basis between federal Forest payments and foregone taxes is in Tucker County, where payments are 138 percent higher than potential tax receipts. In general, the comparison reflects higher future PILT payments and the greater projected rate of increase in Forest timber sale revenue (including both increasing volumes of timber and stumpage price increases) and in mineral revenue, as opposed to increases in tax receipts which, in this analysis, are totally dependent on stumpage price increases.

These findings suggest that federal Forest payments as a component of county budgets will become more important in the future than they have been in the past. Indeed, within a few years Forest payments are likely to be the major source of public revenue in Pocahontas County, and critically important in Pendleton, Randolph and Tucker counties as well.

This comparison of federal Forest payments with foregone county tax revenue should be made in full awareness of the timberland appraisal method used in West Virginia. The state recently adopted a timberland appraisal system based on "use value", i.e., the appraisal is based solely on the value of the land to produce timber. This results in lower assessments than an unmodified ad valorem appraisal based on the "highest and best" use, and therefore gives preferential treatment to timberland owners. The rationale for use value appraisal, which has been adopted in most states, is that timber production will provide jobs in rural areas, lead to the establishment of woodusing industry, create secondary economic benefits, and in the meantime provide broad social benefits in the form of recreation and other non-timber amenities associated with forest land. The same sort of preferential treatment is afforded farmland in West Virginia and in most other states.

But an important assumption underlying use-value appraisal for timberland is that the timberland will be managed for maximum productivity. The appraised value is determined by the land's productive capability, not the current condition of the forest existing on the land. The tax, therefore, is a fixed cost rather than a variable cost, and each owner is encouraged to maximize output to reduce unit fixed costs. Use-value appraisal represents a kind of contract between the public and the owner. The public provides preferential tax treatment to the owner to ensure maximum timber production from the land over the long term.

The relevancy of all this to the question of equivalence is that policy incentives on the Forest are not directed toward maximizing timber production as is the case with private land. The difference in long-term sustained yield between Plans E and F mentioned previously attest to the point. Presumably, this loss of timber output means the loss of jobs and other economic activity. Under these conditions it is legitimate to question whether equivalency can be fairly assessed by comparing federal Forest payments and natural resource property tax revenues. Athorough analysis of equivalence over the long term would also have to take into account the relative economic multiplier effects of timber production and recreational activity, an undertaking beyond the scope of this study.

Comparison of Present Value of Payments Under Three Management Alternatives

Plans D, E and F were scrutinized for their effect on Forest receipts and subsequent payments to West Virginia's county governments. The objective was to reveal the opportunity cost, in terms of payments to county government, of choosing a plan in which nonmarketed goods, such as recreation, claimed a greater emphasis than marketed goods. Plan D emphasized the production of outputs with market values, such as timber and forage. Plan E, the Forest Service's "preferred" plan , emphasized a combination of remote habitat, semiprimitive nonmotorized recreation, and timber production. Plan F emphasized remote habitat, nonmotorized recreation, wildlife management, closure of many roads to public access, and relatively low timber production.

The analysis shows that the adoption of Plan F over Plan E will cost West Virginia's counties approximately $27 million (1994 dollars) through the year 2030, or about $1.4 million a year (see Table 6). If the relative shares of payments going to individual counties remain constant over time, Pocahontas County's share of the annual lost revenue is $490,000, Randolph County's is $321,000, and Greenbrier County's is $161,000.

Summary and Discussion of Policy Concerns

Federal Forest payments to West Virginia's county governments currently exceed potential natural resource property taxes in Pendleton, Pocahontas, Randolph, Tucker, and Webster counties and fall short of potential natural resource property taxes in Barbour, Grant, Greenbrier, Nicholas and Preston counties. Overall, federal Forest payments currently exceed potential natural resource property taxes by seven percent. Moreover, the emphasis on remote habitat, serniprimitive nonmotorized recreation, wildlife, less intensive timber production, adopted following public comment on Plan E. Source: Calculated from data in USDA Forest Service, 1986. Final Environmental Impact Statement., Land and Resource Management Plan, Monongahela National Forest, Monongahela National Forest, Elkins, WV.

Of the future stream of federal Forest payments exceeds the present value of future natural resource property taxes by about $23.6 million, or 75 percent. The results of this comparison, however, are somewhat clouded because West Virginia timberland property taxes are based on "use value" appraisal and are designed to promote efficiency in long-term timber production, whereas management of the Monongahela National Forest has a multiplicity of objectives which does not encourage efficiency in timber production. Nevertheless, the excess of discounted future Forest payments over discounted future timberland property taxes is substantial, and much of the excess is attributable to the adoption of P.L. 103-397.

The Forest management plan now in effect provides for substantially lower returns to the U.S. Treasury and to West Virginia's counties than is possible under alternative plans. The opportunity cost of the current plan, in terms of present value of future payments to counties, is $27 million, or about $1.4 million a year through the year 2030. Three counties will bear the largest part of the loss. This finding does not preclude the possibility, of course, that selection of Plan F has resulted and will continue to result in compensatory values in the form of richer recreation opportunities, greater wildlife populations, and other non-monetary benefits to Forest users. The likelihood of such compensation is suggested in a comparison of the benefit/cost ratios of Plans E and F in Table 6. The high benefit-to-cost ratio for Plan F, relative to its dollar income potential, results from the attribution of monetary values to nonmarket outputs. For example, one recreation-visitor-day of big game hunting was valued at $17.85 (USDA Forest Service 1986). However, the recreational outputs emphasized in Plan F produce little cash income because it is public policy to offer these outputs at little or no charge. More important, the beneficiaries of Plan F outputs, the forest users, are not in all cases (probably not in most cases) local people. In a broad sense, therefore, the choice of Plan F over Plan E created a transfer of future income (benefits) from local residents to forest users. West Virginia's county governments and schools systems ' it can be argued, are subsidizing the recreational activities on the Forest.

These apparent inequities were, of course, an important factor underlying Congress'decision to pass P.L. 103397. By placing a greater weight on the number of acres of federal land as opposed to sales, the fiscal impact of emphasizing nonrevenue-producing activities was lesseneri.

References

Clawson, Marion and Burnell Held. 1957. The Federal Lands: Their Use and Management. Baltimore, MD: The Johns Hopkins University Press.

Fairfax, Sally K. and Carolyn A. Yale. 1987. Federal Lands: A Guide to Planning, Management, and State Revenues, Washington, DC: Island Press.

Hackworth, Kevin and Brian Greber. 1988. Timber-Derived Revenues: Importance to Local Governments in Oregon. Spec. Pub. 17, Forest Research Lab.,

Oregon State University, Corvallis, OR.

Huebner, Anne E., Clifford Hickman, and H. Fred Kaiser. 1985. "A Tax Equivalency Study on National Forest Lands in the United States." USDA Forest Service. FS-396.

Powell, Leslie A. and Brian J. Greber. 1991. "Federal Forest Revenue Sharing in Coastal Oregon: An Assessment of Historic and Future Tax Equivalence." Paper

2092, Forest Research Lab., Oregon State University, Corvallis, OR.

USDA Forest Service. 1986. Final Environmental Impact Statement: Land and Resource Management Plan, Monongahela National Forest. Monongahela National

Forest, Elkins, WV.

USDA Forest Service. 1993. "Payments In Lieu Of Taxes and 25% Fund, Monongahela, George Washington, Jefferson National Forests in West Virginia, FY

1992." Unpublished fact sheet, Monongahela National Forest, Elkins, WV.

USDA Forest Service. 1994. "Payments In Lieu Of Taxes and 25% Fund, Monongahela, George Washington, Jefferson National Forests in West Virginia, FY

1993." Unpublished fact sheet, Monongahela National Forest, Elkins, WV.

USDA Forest Service. Annual. "Mineral Revenue Returns to the U.S. Treasury." Monongahela National Forest, Elkins, WV.

United States Public Land Law Review Commission. 1970. One Third of the Nation's Land. Washington, DC: U.S. Government Printing Office.

West Virginia Department of Tax and Revenue. 1987. "CAMA System-Timber Acreage by County and Grade of Timber." Report No. TXCAMTN5, April 21,

1987. Charleston, WV.

West Virginia Department of Tax and Revenue. 1993. Coal Severance Tax Consolidated Budget Report Fiscal Year Ending June 30, 1993. (Annual).

Charleston, WV.

West Virginia Department of Tax and Revenue. 1993. Rates of Levy: State, County, School and Municipal. 1992 Tax Year, Fiscal Year Ending June 30,

1993. Charleston, WV.

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David E. White is a Professor Emeritus of Forestry Economics and Policy at West Virginia University. An expanded version of this article has been published as Scientific Article No. 2489 by the West Virginia Agricultural and Forestry Experiment Station, West Virginia University.

County Origins and Development

In 1880, West Virginia amended its constitution and put into place the basic structure of county government that is in use today. At that time, the amendments clearly established that counties were primarily administrative arms of the state government. Their main constitutional duties were to record deeds and other papers presented for record in their counties, to conduct elections for county and district officers, and to serve as judges, subject to appeal to the judiciary, when the outcome of county or district elections was contested or when the qualifications of those running for county or district office were challenged. As will be discussed shortly, they were also required to assist state government in the administration of justice.

Although county government was initially viewed as primarily administrative, counties were given the responsibility for providing law enforcement and were allowed to construct and maintain, when and where they deemed it appropriate, roads, bridges, public landings, ferries, and mills. They were also required to provide and maintain a county jail and pay for the care and feeding of prisoners. Counties were allowed to set levy rates on property to pay for the provision of these services.

Although counties were given some important responsibilities, the state constitution continued to deny them home rule. The state constitution, and subsequent court rulings, clearly established that counties possess only those powers which are expressly granted to them by the state constitution or by state statute. Those powers can be increased or decreased at the pleasure of the state government. For example, counties'fiscal problems during the Great Depression led West Virginia's state government to take away some of the responsibilities counties had been granted earlier. Recognizing their severe fiscal stress, counties were stripped of most of their welfare responsibilities. Also, the state assumed responsibility for the construction and repair of nearly all county roads by integrating them into the state's system of primary roads that had been authorized by the Good Roads Amendment of 1920 (Shamberger 1952; Davis et al., 1963).

Although West Virginia's state government has historically been reluctant to expand county responsibilities, counties have been granted additional responsibilities in several areas over the years. Counties were authorized to fund public libraries in 1915. In 1929, they were allowed to construct, lease, own, and operate airports. In 1949, they were authorized to construct waterworks, sewer systems, and wastewater treatment plants and to improve streets, alleys, and sidewalks that are not in the state road system. In 1951, counties were allowed to maintain and operate fire stations and fire prevention units and to create county parks and recreation commissions to oversee county parks and recreational facilities. In 1955, they were given permission to provide garbage disposal services in areas outside of municipalities and to operate landfills. In 1959, they were allowed to create county planning and zoning commissions. In 1968, counties were allowed to establish building and housing codes. Since then, counties have been authorized to construct flood walls and make navigation improvements to protect their citizens from floods (1975), provide emergency ambulance services (1975), and fund hospitals and longterm care facilities (1989). They are also allowed to perform many other services related to the maintenance of law and order and the protection and enhancement of public health and welfare.

Contemporary Finances and Services

Counties currently spend approximately $217 million annually (WV Department of Tax and Revenue 1995a). The extent of county services varies from county to county, depending primarily on its population. West Virginia's ten counties with less than 10,000 people (Calhoun, Clay, Doddridge, Gilmer, Pendleton, Pleasants, Pocahontas, Tucker, Tyler, and Wirt counties) spent, on average, only $1.1 million in 1994. Nearly all of that money was spent on salaries, supplies, and off ice expenses for the county's elected officials and their staff and on the maintenance of the county courthouse and jail. Most of these counties have fewer than 20 employees and provide relatively few services beyond those mandated by state law.

West Virginia's thirty-five counties with populations between 10,000 and 50,000 spent, on average, $3. 1 million in 1994. Most of that money (75 percent) was spent on salaries, supplies, and office expenses for the county's elected officials and their staff and the maintenance of the county courthouse and jail. They did, however, offer a greater variety of services than counties with populations below 10,000. They were more likely than smaller counties to fund physical and mental health services, ambulance services, fire protection services, industrial parks, libraries, and visitors' bureaus.

West Virginia's ten counties with populations exceeding 50,000 (Berkeley, Cabell, Harrison, Kanawha, Marion, Mercer, Monongalia, Ohio, Raleigh, and Wood counties) spent, on average, $9.6 million in 1994. Kanawha County, the state's most populous county with 206,714 residents, spent $30 million and had approximately 350 full-time employees. Cabell County, the second-most populous county, having 96,886 residents, spent $9 million and had approximately 260 full-time employees. With Kanawha County removed, the next nine most populous counties spent, on average, $7.2 million (Isserman 1995; WV Department of Tax and Revenue 1995a).

The state's most populous counties offer a broader range of services than those having lower populations. Seven of them currently provide fire protection services, eight sponsor industrial parks, eight offer library services, nine fund visitors' bureaus, seven subsidize the local magistrate courts, eight subsidize the local circuit court, five rent government buildings besides the courthouse and jail, nine finance physical health services, nine provide mental health care, and five sponsor ambulance services. However, salaries, supplies, and office expenses for the counties' elected officials and their staffs and the maintenance of the county courthouse and jail still account for nearly 60 percent of their total expenditures (WV Department of Tax and Revenue 1993).

West Virginia's counties do not provide a particularly wide range of services when compared to counties in most other states. Over thirty years ago, a scholar studying West Virginia's county governments concluded that they were not very important in West Virginia and that their functions were so few that they were top-heavy with elected officials and clerks (Davis et al. 1963). Although counties provide many valuable services for their residents and some of West Virginia's most populous counties now offer many more services than in the past, the description of West Virginia's counties as being relatively unimportant policyrnakers in the state and as being topheavy with elected officials and clerks still applies to some of West Virginia's county governments, especially those with populations under 10,000 people.

Institutional Restraints

The lack of county services in West Virginia is explained, at least in part, by the large number of rural, lowpopulation counties in West Virginia. However, the state government has also played a key role in limiting the extent of county services in West Virginia. The state has imposed a governmental structure on counties which inhibits their ability to respond efficiently to citizen demands for governmental services. It has also placed relatively severe restraints on their capacity to raise revenues, and, by denying them home rule, has forced them to seek permission from the state government before they can offer any new services.

When West Virginia amended its constitution in 1880 it not only denied counties home rule, it also required counties to adopt a plural form of governance. Reflecting the political thought of Thomas Jefferson, who was convinced that the best government was one that governed the least, West Virginia's framers divided county's governmental powers among several independently elected offices. It was believed that a government with a plural organizational form would be less likely to abuse its powers and inflict a tyranny upon the people than a government with a unified organizational form. It was also believed that a plural form of government would make it more difficult for any individual to use the county government's powers to inflict a tyranny over the people.

A plural form of government does create a system of checks and balances that makes it more difficult to inflict a governmental tyranny. However, it also makes it more difficult for counties to respond to citizens' demands for increased services because the county commissions lack the power and authority necessary to coordinate the various functions performed by the independently elected offices. Moreover, many of the independently elected offices perform specialized, primarily custodial duties that some analysts have argued should be appointive, rather than elective offices. Specifically, the state constitution established seven independently elected offices to run county government: county commissioners, county clerk, circuit clerk (not discussed here because their primary duties are with the court system), county sheriff, county assessor, county prosecuting attorney, and county surveyor of lands.

County Commissioners

County voters in all but Jefferson County elect three commissioners on a county-wide, partisan ballot. Jefferson County elects five commissioners on a countywide, partisan ballot. In all 55 counties, the county commissioners act as the county's legislative body and have six-year terms. Their terms are staggered so that one commissioner is elected every two years. No two commissioners can reside in the same magisterial district. They are required to meet at least four times a year at the county courthouse. At their first meeting each year, they elect a president from among themselves to preside over meetings. The president is authorized to call a special session, with the concurrence of at least one other commissioner, whenever they believe that the public interest requires it. At the present time, most of the county commissions in counties with less than 10,000 people meet twice a month, most of the county commissions in counties with populations between 10,000 and 50,000 meet once a week, and most of the county commissions in counties with populations exceeding 50,000 meet twice a week. It takes two commissioners to constitute a quorum for the transaction of business.

The commissioners' primary duties are to determine the annual county budget, submit a balanced budget to the state tax commissioner for approval, set the county's levy rates on property to pay for the provision of county services, and serve as the board of equalization and review, which hears appeals concerning the appraisal and assessment of real and personal property in the county. They also continue to serve as members of the county court, but the court's jurisdiction has been severely curtailed since the adoption of the Judiciary Amendment of 1880. Instead of ruling on nearly all judicial matters within the county, commissioners retain jurisdiction only over probate, the appointment and qualification of personal representatives, guardians, and curators, and the settlement of accounts (Davis et al. 1963). The state's constitution transferred the county court's remaining judicial responsibilities to locally elected justices of the peace. The justices of the peace were later replaced, following the ratification of The Reorganization Amendment of 1974, by the current system of magistrate and municipal courts (Brisbin and Kilwein 1993).

All county commissioners are considered part-time employees. The actual time spent on their duties, however, varies widely from commissioner to commissioner. Afew commissioners just attend the county commission's meetings and are otherwise rarely seen in the county courthouse. Most devote at least 40 hours a week to their duties, have an office in the county courthouse, and keep fairly regular office hours. The differences are primarily attributed to the personal preferences and initiative of the commissioners themselves, and is not related to county population size or the size of the county budget (Zoeller 1993).

The county commissions in the state's mid-size to more populous counties typically appoint a county coordinator or administrator to handle the day-to-day operations of county governance. The county coordinator/administrator typically makes all personnel decisions, assists in the preparation of the county budget, and makes recommendations on policy decisions before the commission.

State statutes require all county commissioners, clerks, assessors and sheriffs to attend in-service training programs sponsored by the state tax commissioner. At the present time, county commissioners attend an annual, two-to-four-day training session that is designed to assist them in the preparation of the county budget and in their duties as the county board of equalization and review. The tax commissioner also sponsors separate, twoto-four-day annual training sessions for the county clerks, assessors and sheriffs.

State statutes set the compensation for all county elected officials. County commissioners are currently paid an annual salary that is determined by the total amount of assessed valuation of property in the county. As Table 1 indicates, commissioners' salaries range from $8,400 in Class V counties to $24,000 in Class I counties.

The County Clerk

The county clerk is also elected on a county-wide, partisan ballot to a six-year term. The clerk serves as the custodian of all county records, including birth and death certificates, wills when probated, transfers of property titles, list of fiduciaries, deeds of convenience, and deeds of trust. They also are responsible for the issuance of licenses required by state government, including business and marriage licenses, and for the general management of elections, including registration of voters and the maintenance of voting machines.

County clerks in Class I counties are required to be full-time employees. However, most county clerks in West Virginia devote at least 40 hours a week to their duties. As indicated on Table 1, their salaries range from $26,400 to $37,560.

The County Sheriff

The county sheriff is elected to a four-year term on a county-wide, partisan ballot. The sheriff is the only county elected officer who is subject to term limitations. Primarily due to corruption and mismanagement in the past, the state constitution used to prohibit sheriffs from succeeding themselves in office. Moreover, they were not allowed to serve as a deputy or hold any other public off ice for at least one year after their term had expired. In 1973, these restrictions were relaxed somewhat following the ratification of a constitutional amendment that allowed sheriffs to serve two consecutive terms. A constitutional amendment to allow sheriffs to serve an unlimited number of terms, however, was soundly defeated at the polls in 1982 and again in 1994.

The sheriff's primary duties are to enforce the law and maintain order in the county. However, sheriffs also have other responsibilities which have been associated with the office since colonial times. For example, the sheriff is the ex officio county treasurer for both county government and the local school district. As county treasurer, the sheriff receives, collects, and disburses all moneys due to the county and the local school district and is required to keep an accurate account of all receipts and disbursements. Also, as an officer of the circuit court, county court, and any other court of record in the county, the sheriff is responsible for executing process, summoning and impaneling juries, and typically attends most, if not all, of the circuit court's sessions.

The sheriff is also the county jailer and has custody of all prisoners in the county jail. The sheriff usually appoints, with the consent of the county commission, a deputy sheriff to run the county jail and keep it in "a clean, sanitary, and healthful condition" as required by state statute. Among other duties, the sheriff also auctions off delinquent lands, serves as ex officio county sealer of weights and measures in the absence of a regularly appointed county sealer, and appoints one of his deputies to serve as the county humane officer. The humane officer is responsible for investigating all complaints concerning the cruel or inhuman treatment of animals within the county.

Sheriffs in Class 1, 11, and III counties are required to devote full-time to the performance of their duties, as are all sheriffs with more than four deputies. Also, they are subject to strict guidelines concerning other employment to ensure that they are not subject to a conflict of interest in the performance of their duties as sheriff. As indicated on Table 1, their base salaries range from $24,480 to $29,040. Sheriffs are also eligible for an annual salary supplement of up to $15,000 if, in their capacity as the county tax collector, they collect more than a predetermined amount established by the county commission. According to the West Virginia Sheriff's Association, all 55 county sheriffs in West Virginia are currently employed on a full-time basis.

The County Assessor

The county assessor is elected to a four-year term on a county-wide, partisan ballot. The assessor's primary duties are to appraise at full market value real and personal properties owned in the county as of July 1, keep an accurate account of all appraisals in the county cadaster (record book), and defend appraisals when appealed to the county commission sitting as the county board of equalization and review. The assessor is also responsible for assessing and collecting a "head" tax on all dogs in the county. Assessors may appoint, with the consent of the county commission, deputy assessors to assist them in their duties.

As Table 1 indicates, county assessors receive the same base salary as sheriffs, ranging from $24,480 to $29,040. They also receive a 10 percent commission from all proceeds from the dog tax, a 10 percent salary increment for conducting the farm census for West Virginia's Department of Agriculture, and are eligible for an additional duties compensation amount (currently $11,000 annually in the state's most populous counties) if they meet certain criteria established and certified by the State Tax Department.

State statutes require county assessors in Class 1, 11, and III counties to be full-time. However, state statutes also require the county assessor's office to remain open throughout the year. This latter requirement, coupled with the responsibilities of the office, has caused all 55 county assessors in West Virginia to devote at least 40 hours a week to their duties (Pyles 1993).

The County Prosecuting Attorney

The county prosecuting attorney is elected to a fouryear term on a county-wide, partisan ballot. They are the only county elected officers who are not required to reside in the county they serve. Although the state constitution and enabling legislation does not specifically require the county prosecuting attorney to be an attorney, the state's courts have ruled that the wording of state statutes imply that they must be an attorney licensed to practice in the state (State ex. rel. Summerfield v. Maxwell [1964]).

The county prosecuting attorney's primary duties are to prosecute violators of the state's criminal laws, provide legal advice to the county commission and local school district, and represent the county in all civil actions. With the permission of either the county commission, governor, or circuit court, they can offer rewards for the apprehension of people charged with crimes. Also, with the permission of the county commission, they can appoint full-time and part-time investigators to supplement the efforts of the county sheriff and other investigative agencies. The prosecuting attorney is also required by state statute to assist the state attorney general in performing any legal duties which are not inconsistent with their duties as the legal representative of their county.

As Table 1 indicates, county prosecuting attorneys are the highest-paid county elected officials, ranging from $28,200 to $59,500. Prosecuting attorneys in Class I and 11 counties are required by state statute to be full-time employees, with an exception for Class III, IV and V counties which move up to Class 11 status. Their county commissions have the option of retaining the prosecuting attorney on a part-time basis. There are currently 23 fulltime prosecuting attorneys in West Virginia (Brisbin 1993). Most of the prosecutors in the state's less-populated counties are part-time.

A recent analysis of West Virginia's county prosecutors revealed that they operate in a relatively isolated environment. In criminal cases, the state's circuit judges and magistrates see the same prosecuting attorney or assistant prosecuting attorney in case after case. Moreover, their criminal practice is not regulated by any agency or individual except the circuit judge. They do not follow any statewide standard for operating procedures or documentation practices and, until recently, had no institutionalized method of communication with prosecuting attorneys in other counties. Such isolation and independence in the prosecutor's activities is relatively uncommon in the United States (Brisbin 1993).

The recent enactment of legislation to establish the West Virginia Prosecuting Attorneys' Institute to provide continuing education classes for county prosecutors may reduce their isolation. The Institute should provide them an opportunity to learn the latest techniques and strategies in law enforcement and prosecution from various experts in the field and to share their own ideas about what works and what does not work from their personal experience as county prosecutors in West Virginia (AP 1995).

The County Surveyor of Lands

The county surveyor of lands is elected to a four-year term on a county-wide, partisan ballot. The surveyor conducts land surveys for the county, typically involving rightsof-way and alignments of county roads and the sale or purchase of county or school district land. The surveyor also resolves disputes over boundary lines, keeps all records, except for those that are in the deed books, including road maps, plats, and tracings, compiles tax maps for the use of the county assessor and board of equalization and review, and any other duties that the county commission deems necessary (Horne 1993).

Unlike other county elected officials, the state does not mandate the county surveyor's compensation or indicate whether they must be either full- or part-time employees. Currently, all county surveyors work on a part-time, on-call basis. After performing a requested service, they charge the county or school district a fee. As a result, their compensation varies from year to year according to the amount of work that they do in each county and the willingness of the county commission to pay what the surveyor requests. (Note: All county elected officials are also eligible for reimbursement for travel and other expenses that are directly related to their duties. Source: West Virginia Code, Chapter 7, Articles 7-3, 7-4, and 7-16.)

Fiscal Restraints

Another factor, besides their plural organizational structure, that helps to account for the lack of services offered by West Virginia's counties is the relatively severe fiscal restraints that state government imposes upon them. Like counties in most other states, West Virginia's counties are required to have a balanced operating budget. To account for unforeseen circumstances, counties are allowed to incur a "casual deficit," not to exceed its state approved levy estimate by more than three percent, provided that the deficit is satisfied in the succeeding year. Also, like counties in most other states, West Virginia's counties must follow strict state guidelines when incurring a deficit for capital expenses. For example, West Virginia's constitution limits all local governments' individual aggregate outstanding bonded indebtedness to five percent of the local government's total assessed value of taxable property. Also, all local government debts in West Virginia must be retired within thirty-four years.

Besides these typical restraints on county revenues, West Virginia's state government also prohibits counties, and all other local governments in West Virginia, from imposing either an income or a sales tax. Moreover, although the recent property tax reappraisal process has increased county property tax revenue, the Tax Limitation Amendment of 1932 places relatively severe limits on their ability to generate revenue through the property tax. The Amendment divided real and personal property into four classes and established maximum property tax levy rates for each class, ranging from 50 cents per $100 of assessed value for personal property used in farming to $2 per $100 of assessed value for commercial properties located within municipalities. These property tax levy rates are far below national averages.

The Tax Limitation Amendment of 1932 also established the maximum property tax levy rates that each type of local government in West Virginia may impose within the overall limits. For example, as indicated on Table 2, the state constitution established a maximum property tax levy rate of $1 per $100 of value for Class 11 properties, which include farm real estate and owner-occupied homes. Counties are allowed to impose a property tax levy rate of up to 28.6 cents per $100 valuation on Class 11 properties. School districts are allowed to impose up to 45.9 cents, municipalities up to 25 cents, and the state up to 5 cents. Currently, approximately 21 percent of property tax revenue in West Virginia goes to counties, 72 percent to school districts, 7 percent to municipalities and .3 percent to the state government. The amount sent to each government type and the percentages each receives vary somewhat from year to year depending upon changes in the value of properties within each class.

The maximum property tax levy rates set by the Tax Limitation Amendment of 1932 cannot be exceeded except through voter-approved excess levies. Excess levies can increase the maximum property tax levy rates by up to 50 percent for a period of up to three years in counties and municipalities if approved by 60 percent of the county's or municipality's voters. Excess levies can increase the maximum property tax levy rates by up to 100 percent for a period of up to five years in school districts if approved by a majority of the voters in the school district.

The Property Tax and Homestead Exemption Amendment of 1982 further limits county property tax revenue by exempting the first $20,000 of assessed value of any residence owned by a citizen of the state who is at least sixty-five years old or who is permanently and totally disabled. This reduces total property tax collections in West Virginia by approximately $36 million annually and county property tax revenue by approximately $7.6 million annually (WV Department of Tax and Revenue 1995b).

Counties rely heavily on the property tax for revenue. In 1994, property tax revenue accounted for 61 percent of all county revenue ($133 million of $216.7 million). The next largest revenue source was the coal severance tax ($16.6 million) (WV Department of Tax and Revenue 1995a).

Although the current reappraisal process mandated by the Appraisal Act of 1990 promises to provide counties with additional resources, and the state government has allowed counties to impose various fees and other taxes over the years, their fiscal restraints continue to limit their ability to respond to taxpayer demands for additional county services.

West Virginia's state government officials have chosen to place restraints on county governments for a number of reasons over the years, including some that defy objective institutional analysis. These include a desire to maximize their personal power, control, and prestige as well as a desire to maintain access to and influence over the awarding of government patronage jobs. However, by having a very long history of political corruption and mismanagement, county elected officials have made it relatively easy for West Virginia's state government off icials to justify their dominance of state/local relations in West Virginia on the grounds that county government officials can not be trusted with power. For example, the U.S. Attorney for West Virginia's Southern District successfully prosecuted over seventy locally elected officials between 1981 and 1992. Many of them were county elected officials, including one county sheriff who paid $100,000 to his predecessor to ensure his election and was later caught covering for a local drug dealer (Dominion Post Editorial 1993). Also, between 1986 and 1991,

the state Board of Risk and Insurance Management paid out more than $1 million in claims against local government officials, many of them county elected officials, for firing employees for political reasons. The U.S. Supreme Court ruled in 1976 that government employees fired for political reasons can sue for damages. Examples include five deputies fired by the Clay County sheriff for political reasons, nine deputies fired by the Lincoln County sheriff for political reasons, and five Mingo County courthouse employees fired for political reasons (Charleston Gazette 1993).

The public's concern about the integrity of its county elected officials is reinforced by the relatively common practice of county elected officials hiring their relatives to work in their offices. Although legal, and perhaps even somewhat understandable given the difficult employment market in many West Virginia communities, when West Virginians go to the county courthouse and see the sons, daughters, nephews, nieces, or cousins of county elected officials behind the counter they cannot help but be reminded of the old style of politics of the "county courthouse gang," where it is not what you know, but who you know (or are related to) that counts.

Conclusions

The current status of county government in West Virginia is mixed. On the negative side, the counties' institutional capacity to govern has been severely restrained by state government. Moreover, many citizens question the integrity of their county elected officials. However, on the positive side, many county elected officials are hardworking, public spirited citizens committed to ending the stereotype of the politically motivated and corrupt courthouse gangs of the past. Their statewide organizations, especially the West Virginia Association of Counties and the County Commissioners'Association of West Virginia, have undertaken a number of education and training efforts to improve the capacity of county elected officials to make more informed decisions. For example, the County Commissioners'Association of West Virginia and the Institute for Public Affairs at West Virginia University initiated an ongoing education and training series in 1993. Over 80 percent of the state's county commissioners attended the initial four weekend meetings in this ongoing series of workshops and presentations by practitioners and scholars. Moreover, attendance at the County Commissioners' Education Series has remained very strong since 1993. Obviously, West Virginia has many dedicated public servants in its county courthouses who are interested in improving their skills as policyrnakers and administrators. However, when confronted with a problem or a demand for additional county services, West Virginia's county elected officials are often prevented from acting because they either lack the authority or the financial resources to respond.

Recommendation

Several nonpartisan, academic studies have examined local government finances in West Virginia. All of them reached the same conclusion: West Virginia's local governments do not have the fiscal resources available to provide services at levels commonly found in other states or to engage as full partners in the state's efforts to encourage economic development (Bahl 1969; West Virginia Tax Study Commission 1984; Reece 1994). Several of these studies have offered solutions to resolve this problem. In 1969, Roy Bahl argued that West Virginia's local governments should be allowed to establish a personal income tax to augment their revenue. In 1984, the West Virginia Tax Study Commission also recommended that counties be allowed to impose a personal income tax. It also recommended that the utility tax be replaced by a local sales tax. More recently, William Reece was somewhat more cautious about the implementation of local income taxes. He recommended that a local income tax would be appropriate only if the current property tax reappraisal process fails to significantly increase local government revenue.

Academics tend to favor local income taxes over other forms of local taxation, such as sales taxes and property taxes, primarily because income taxes are generally more progressive than other forms of taxation. Also, income and property taxes, unlike sales taxes, are deductible on federal income tax forms.

The West Virginia Association of Counties has advocated the adoption of legislation to give counties the authority to impose local income or sales taxes in the past. However, in recognition of the state legislature's strong opposition to local income or sales taxes and the prevailing mood in the electorate that local taxes are already high (Dilger, Kaminski and Hahm 1995), it has focused its recent lobbying efforts on more incremental changes in the tax code. For example, the Association recently succeeded in its efforts to convince the state to dedicate a portion of the state's oil and natural gas severance tax revenue to the counties and municipalities (five percent of the revenue in 1996 and 10 percent thereafter) and to exempt counties from the state's gasoline excise tax.

Given the prevailing political climate, West Virginia's state legislature is not likely to provide counties with the ability to impose local income or sales taxes. However, it is clear that counties do not have the fiscal capacity to be full partners in the state's effort to encourage economic growth and job creation in West Virginia. Although county officials throughout the state have worked very hard in recent years to enhance their economic development efforts, for the most part, they do not have the fiscal resources to fully staff their economic development offices or to train their economic development officials. Many counties cannot even afford to hire an economic development officer. They are having a very difficult time finding the resources to provide basic county services and have relatively few dollars left over for economic development activities. This, in turn, has helped to perpetuate the counties' fiscal difficulties.

The state legislature should help counties find the resources necessary to become more active partners with the state in attracting business activity and jobs to West Virginia by sending to the voters a state constitutional amendment that would lower the excess levy ratification requirement from 60 percent to 50 percent, for projects designed to improve the county's economic competitiveness. The legislature should specify in the Amendment the types of economic development activities eligible for the 50 percent ratification requirement, such as funding for a county economic development office, the development of a county industrial or business park, and the creation of a tax-exempt or tax-subsidized business enterprise zone. In this way, the state can help counties generate the revenues necessary to become more active partners in the competition with surrounding states for jobs and business growth while, at the same time, providing county taxpayers the authority to determine if the proposed project is worthy of their support.

References

Associated Press (AP). 1995. "New law changes way vehicle taxes are paid," The Charleston Gazette, March 22, p. 5A.

Bahl, Roy W. 1969. The Public Finance Crisis in West Virginia: Some Suggestions for Reform. Morgantown, WV:  Appalachian Center, West Virginia University.

Brisbin, Richard A. Jr. 1993. "The West Virginia Judiciary," in West Virginia State Government: The Legislative, Executive, and Judicial Branches.

Morgantown, WV: Institute for Public Affairs, West Virginia University.

Brisbin, Richard A. Jr., and John Kilwein. 1993. "The West Virginia Judiciary: A Comparative Portrait," The West Virginia Public Affairs Reporter (Winter): 2-12.

Charleston Gazette. 1993. "Political spoils," The Charleston Gazette, February 25, p. 4A.

Davis, Claude J., et. al. 1963. West Virginia State and Local Government. Morgantown, WV: Bureau for Government Research, West Virginia University.

Dilger, Robert Jay, Kathleen Kaminski and Sung Deuk Hahm.  1995. "Citizen Evaluations of Municipal Services in West Virginia." The West Virginia Public

Affairs Reporter (Winter): 12-16,

Dominion Post Editorial. 1993. "Carry over Carey," Dominion Post, January 14, p. 4A.

Horne, John W. 1993. Monongalia County Surveyor. Interviewed by Robert Dilger, March 1.

Isserman, Andrew. 1995. "Where are the West Virginians?" West Virginia Demographic Monitor 2:1 (February): 1-4.

Pyles, Rodney. 1993. Monongalia County Assessor and Then-President, West Virginia Assessors Association. Interviewed by Randolph Moffett, March 4.

Reece, William, S. 1994. "Local Government Finance and Its Implications for Economic Development," In West Virginia in the 1990s: Opportunities for

Economic Progress, Eds. Robert Jay Dilger and Tom Stuart Witt. Morgantown, WV: West Virginia University Press.

Shamberger, Harold J. 1952. County Government and Administration in West Virginia. Morgantown, WV: Bureau for Government Research, West Virginia

University.

State ex rel. Summerfield v. Maxwell, 1964. 148 W. Va. 535.

West Virginia Department of Tax and Revenue. 1993. Coal Severance Tax Repork Estimated Revenues, 1992-1993 Fiscal Year. Charleston, WV: West

Virginia Department of Tax and Revenue.

West Virginia Department of Tax and Revenue. 1995a. Coal Severance Tax: Consolidated Budget Report, Fiscal Year Ending June 30, 1995. Charleston,

WV: West Virginia Department of Tax and Revenue.

West Virginia Department of Tax and Revenue. 1995b. Classified Assessed Valuations: Taxes Levied, 1994 Tax Year, Fiscal Year Ending June 30, 1995.

Charleston, WV: West Virginia Department of Tax and Revenue.

West Virginia Tax Study Commission. 1984. A Tax Study for West Virginia in the 1980's: Final Report to the West Virginia Legislature. Charleston, WV.

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Robert Jay Dilger is Director of the Institute for Public Affairs and Professor of Political Science at West Virignia University.