WV Center on Budget and Policy > Blog > Subsides > New York Times Report: WV Ranks 2nd Highest in Business Subsidies

New York Times Report: WV Ranks 2nd Highest in Business Subsidies

Today, the New York Times had an in-depth front page article exposing the $80 billion state and local governments bankroll businesses each year in subsides, including low-interest loans, grants, tax credits, and other gifts through the tax code. The report finds that West Virginia spends $1.57 billion per year on business incentives, ranking the state second highest in business incentives at $857 per resident.

The article is part of a series entitled “The United States of Subsidies”  that is examining business incentives and their impact on jobs and local economies. While the next two articles won’t be published until Monday and Tuesday, the New York Times has an interactive searchable database for each state that includes state and local incentives by company and program. The page for West Virginia highlights that business sales tax exemptions make up 78 percent – or $1.23 billion – of West Virginia’s business incentives, followed by $80.7 million in corporate income tax reductions and $52.7 million in grants and loans (more on this later). 

Most notably, the article found exactly what our research (see here and here) concluded in examining business subsides in West Virginia: We have little or no idea what we are getting for the millions that our state and local governments spend each year on business subsidies.

Doug Winters, an attorney for a township in Michigan, remarked that companies (auto companies, in this case) treat local government like “their own private ATM. When they need money, they come begging, but when they don’t want oversight, they say ‘get out of the way.’”

Our state policymakers (including the legislature, county school boards, county commissions, and mayors) have the power to enact policies to properly evaluate business tax incentives and to ensure that taxpayers are getting a good return on their investment. For example, they could follow the lead of the New York Times and create a state-wide searchable database of business subsidies. With this basic information, the state and the public would at least be able to see where their tax money is going.

2 Responses to “New York Times Report: WV Ranks 2nd Highest in Business Subsidies”

  1. Angela Perri says:

    Terrific articles and a very good message. Given this I’d also like to know how we are inviting other businesses (other than coal) into WV so our people have a shot at employment opportunities in technology or ANY other industry.

  2. Ted Boettner Ted Boettner says:

    Angela,

    There are many people and organizations working on attracting other businesses to the state, including WV Tech Connect, WV Development Office, and others. There are also groups like the Natural Capital Investment Fund that are working on supporting local entrepreneurs and sustainable development.

    One of the best things our state can do is aim to make West Virginia a great place to live, work, and raise a family. This means investing in the quality of life (parks, tourism, amenities, transportation, hospitals, etc) of the state and investing in the people. We also need to make investments in our universities, universal broadband and other infrastructure, early childhood development, and workforce training. Without a well educated workforce it is going to be very difficult to attract new business, keep the business we have, and build wealth.

    Ted

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