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.