HUNTINGTON – A Kanawha County judge has put Huntington's occupation tax on hold instead of letting it go into effect as planned on July 1.
The five suits involved were filed June 22 in Kanawha Circuit Court by the Cabell County Commission, Steel of West Virginia, Bob Bailey, Tommie L. Kelley Sr. and Service Employees International Union 1199, who claimed the occupation tax was unconstitutional.
During Tuesday's hearing, Kanawha Circuit Judge Jennifer Bailey granted a temporary injunction in the case, which means the city of Huntington will continue collecting the $3-per-week user fee in the interim.
The temporary injunction was agreed upon between the City of Huntington and Steel of West Virginia after attorneys from both parties agreed to make compromises shortly before the hearing was to be held. Both parties agreed that they would work in the hopes of getting the case heard before the state Supreme Court.
The lawsuits are also seeking a declaratory judgment that the Municipal Home Rule Board and all of the powers it granted to West Virginia cities under its five-year home rule pilot program be voided.
Bailey also agreed to grant a motion that will consolidate all five of the lawsuits into one case since the suits are identical to one another.
The state Legislature created the home rule pilot program in 2007 and Huntington's initial home rule plan was adopted by the Municipal Home Rule Board the following year. Unlike the other three cities that participated in the pilot program, Huntington's plan included changes to its tax structure.
The temporary injunction also gives other parties time to join the suit.
Michael J. Farrell, an attorney who represents Huntington, said it could take approximately two months before the case can be heard in front of the state Supreme Court, as both sides will need to get their cases ready.
Farrell said the temporary injunction will allow the state Supreme Court to make a decision of the constitutionality of the Home Rule Board's approval of the new taxes.
The challenge made by the plaintiffs in questioning the constitutionality of the law that created the home rule pilot program is what prompted the injunction agreement, Farrell said.
"We didn't want to be in the position of collecting money from the citizens and then having an interruption in our capacity as a city to collect the revenues the city needs to run the budget," Farrell said. "Huntington officials did not want to enact the new tax only to see if overturned at a later date."
Bailey's order to grant temporary injunctive relief states that the occupation tax will not become effective until further order of the court and that the City of Huntington must continue its $3-per-week user fee.
Steel of West Virginia was also ordered to pay a $1,000 nominal bond, which was agreed upon by both parties. Should the plaintiffs lose the case, they will forfeit that money, according to the order.