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Transparency and User Fees

This is a guest post, originally posted by Laura at the Course Weblog of PA5113: 
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In my quest for finding out more about transparency and user fees, I found an interesting case study. It seems that in West Virginia this is a current issue, with the interest sparked by local government fees in the city of Huntington.

Huntington currently charges a $2 weekly fee to anyone who works within the city limits, regardless of where they live. The mayor has proposed that this fee be increased by $1, and that the revenue generated by the increase be used to hire police, purchase new police cruisers, and repair and maintain streets. He estimates that the increase will generate $1.6 million. The interesting detail is that there does not seem to be a city ordinance tied to the increase that will earmark the new funds for these promised expenditures. Moreover, the stated use of the funds is only for the $1 increase. The existing $2/week charge has been used in the past for other types of expenditures, and it does not seem that the city is interested in redirecting that revenue stream for the purpose of police or street maintenance. Despite this fact the Huntington Chamber of Commerce does support the increase.

State Senator Evan Jenkins is about to propose legislation that, "would require cities with user fees to enact ordinances specifically stating how such funds will be used." Jenkins' legislation will require cities that enact new fees or increase existing fees develop dedicated funds for the revenue, so that the citizens can clearly track how the funds are used.

Three cities in West Virginia have weekly user fees, and currently all are set at $2/week. Huntington is the only of these three that does not already have a dedicated fund for its city user fee, and as a result its fee seems to be the most unpopular. Charleston directs its fee exclusively toward street paving and police and has even posted signs on newly paved roads indicating that the project was paid for with the user fee. Weirton uses their fee for police and fire service, and in 2002 the legality of this fee was upheld by the West Virginia Supreme Court. Jenkins argues that this legislation will increase citizen confidence in local government and encourage them to invest in city services.

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