Justice, legislators should look at tax
There is no magic wand we West Virginians can wave to create a line of companies waiting to bring jobs here. Economic development is complex, with many moving pieces.
But little by little during the past few years, state legislators and Gov. Jim Justice have been making our state more attractive to job creators. We can see the results: We have about 32,000 jobs more than we did four years ago. In a state our size, that makes an enormous difference.
More needs to be done. A goal thoughtful state legislators have had for several years needs to be accomplished.
It is beginning to phase out West Virginia’s property tax on the machinery and other equipment used by manufacturers.
Together, those job providers pay slightly more than $100 million a year through that tax. It is a bottom-line reason for those in business here to look elsewhere if they want to expand — and a disincentive for newcomers to open up shop here.
Proposals to eliminate the tax make local government officials, including those on county boards of education, nervous, however. Most of the revenue from the tax flows not to Charleston, but to county seats throughout West Virginia. It is easy to understand why local officials would object to losing that much money.
But leading lawmakers say they have a plan to “hold harmless” the local entities. It would use what they refer to as natural growth in state revenue to offset tax losses to the localities. Income foregone through the machinery and equipment tax would be replaced by the state.
A four-year phase-out plan is being proposed, with the tax to be reduced by about $25 million annually until it is eliminated. Accomplishing that in steps is prudent, ensuring that the revenue foregone by localities can be replaced by growth in the state budget, little by little.
Justice is on board with the plan, as he noted during his State of the State speech Wednesday night. “The business inventory and machinery tax is holding us back in some areas,” he noted.
Some critics of the plan worry that state revenue, already on shaky ground, will not be adequate to replace money lost by the counties. Good for them for worrying about that — but at least launching the $25 million-a-year plan should be achievable.
That should be done by legislators this winter. It is, as some say, one more “box” potential job creators can check off in considering West Virginia.