Tom Miller: State argues Times got it wrong regarding tax credits
A recent article in the New York Times reported that West Virginia spends more than $1 billion in tax credits and incentives each year to recruit and retain businesses in this state. The newspaper article said the Mountain State spends more per person on this activity than any other state except Alaska.
West Virginia Commerce Commissioner Keith Burdette was quick to come to the state's defense during an appearance before the Legislature's Joint Commission on Economic Development and the Joint Committee on Finance last Wednesday in Charleston. He said the newspaper article created a "woefully inaccurate picture" of how this state uses its business tax incentives.
According to Burdette, West Virginia only spent $32 million for all tax credits and exemptions during the past budget year and $10 million of that was attributed to the state Film Industry Investment Act.
The newspaper article reported that West Virginia spends about $1.57 billion annually for various business incentives. The single largest tax incentive was said to be a $1.17 billion annual sales tax exemption for manufacturers and other firms to purchase equipment and goods used in production or other business activities.
Burdette's response on that claim was that it was misleading to include that exemption in the total because virtually every state has that exemption but the Times didn't mention that fact. He accused the Times reporter of not comparing "apples to apples." He also noted the information was taken for the 2009 tax year, which saw an unusual boost in equipment purchases for power plants in this state.
"The only reason our value was particularly high (that year) was that it was partly contributable to pollution control efforts made at power plants," said Burdette, a former legislative leader.
Burdette also told lawmakers that Pennsylvania has offered a $1.2 billion package of tax incentives to Shell Energy to attract a cracker plant to extract natural gas. West Virginia officials are also hoping to get at least one new cracker plant located in this state for the same development.
But officials at the West Virginia Center on Budget and Policy, a non-profit watchdog of state government, had a different view in this dispute. They have been critical of the state's lack of transparency in reporting data on tax credits. And while they agreed that the newspaper's article had flaws, they maintain that it provides more information than state officials have been willing to provide.
Sean O'Leary, a policy analyst for the Center on Budget and Policy, said "the (New York) Times may have painted a bad picture but in West Virginia, we haven't painted anything at all. It's just a blank canvas."
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It has been more than 12 years since the West Virginia Legislature -- at the request of then Gov. Cecil Underwood -- passed this state's version of the so-called Defense of Marriage Act, specifying that the only legal union in this state is between a man and a woman. This law includes language that any "public act, record or judicial proceeding of any other state" as it relates to a same-sex marriage "or a right or claim arising from such relationship, shall not be given effect by this state."
It was this statute that compelled Deputy Commissioner Steve Dale of the West Virginia Department of Motor Vehicles to deny a West Virginia driver's license to waitress Cynthia Landis, who now lives in Romney and has been married to her same-sex partner, 30-year-old Melissa Landis, for more than a year. She had no problem obtaining a new driver's license with her new married last name in neighboring Virginia following their wedding in October 2011.
Dale told a reporter he would be glad to legally issue a new West Virginia driver's license with her ex-husband's last name since in this state's eyes, she still legally carries that last name of Hatton. He said her only option is to go to court and have a judge order the name change she desires.
At this year's legislative session, Delegate John Doyle, D-Jefferson, sponsored a bill to give gay and lesbian couples the same legal protections as heterosexual married couples but it never emerged from committee. Fairness West Virginia, an organization that advocates on behalf of the gay, lesbian and transgender population in this state, said it was the first time a civil union bill had been introduced in this state.
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A recent move by Gov. Earl Ray Tomblin to allocate an additional $4 million to the Public Employees Insurance Agency (PEIA) for the budget year beginning July 1 means that state employees, teachers and other workers covered by the state health insurance program won't face any additional cost in their monthly premiums. The PEIA Finance Board was then able to approve the 2013-2014 benefit plan on Dec. 6 without adopting a proposed increase in out-of-pocket co-payments for family coverage and without a boost in co-pays for specialty medications.
Judy Hale, who lobbies for educators as president of the West Virginia Federation of Teachers, said it was very important that premium costs not be raised because teachers and public employees are "working without a raise this year, and we felt it was extremely important that PEIA be left the same." The glee may be short-lived, though, since a current projection says that employee premiums will need to be increased by $11.7 million in the 2014-15 budget year -- a boost of 9 percent.
Tom Miller is a retired state government reporter for The Herald-Dispatch. He is a regular contributor to The Herald-Dispatch opinion page.
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