CHARLESTON – West Virginia’s business tax climate ranking was the third worst in the nation just a dozen years ago. Our state bore the dubious rank of 47th in the nation when ranked among the 50 states for business tax competitiveness.
Our Corporate Net Income Tax rate was one of the highest taxes in the nation and West Virginia collected a Business Franchise Tax on top of the Corporate Net Income Tax. This made us a very high business tax state and an outlier among all states.
State leaders recognized the problem of high business taxes and took action. In 2007, a plan to improve West Virginia’s business tax climate began and by 2010 our state’s business tax climate ranking had improved to 37th place. This ranking placed us in the last third of states when competitively ranked, but was better than 47th place.
More improvements came and by last year, West Virginia had moved up to a ranking of 21st place in the nation. While not great, and not even in the top third, we are now better than the almost last place position that we held before the business tax reductions began.
The reforms enacted in 2007 and beyond, in combination with a thriving coal industry, led to economic progress. Wages, employment and gross state product grew. Between 2009 and 2014, West Virginia had economic growth that ranked among the top economically improving states.
As recently as 2014, West Virginia had the third fastest economic growth in the nation.
The engine of growth was eventually knocked down by disastrous Obama administration policies that attacked coal, slowed the exploration of natural gas, raised electricity prices and put West Virginia workers’ future in peril. Recovery has begun but the damage inflicted came quickly and is deep. It is in this context that legislative leaders are grappling with our state’s budget and the question of tax increases.
We applaud our legislative leaders for taking the time to examine government spending, debate priorities and investigate alternatives to tax increases. The narrative that the previous reductions in business taxes are responsible for our state’s current revenue problem is false. Five years of solid economic growth between 2009 and 2014 is not a “one off.”
Torpedoes to our state’s economy from a national government is not made up or imaginary. A President who said he would make coal too expensive to use is not a fiction. The price of these policies finally came to West Virginia and 2015, 2016 and 2017 are witness to the result.
West Virginia Chamber of Commerce members are found throughout our state. They care deeply about the health and well-being of our cities and towns, communities, workers, schools and the people who make our state great. These employers in West Virginia accept the challenge of the future with exceptional enthusiasm. We applaud those who are carefully weighing options. We will accept modest, temporary tax increases to do our part during this time of budget peril. We value stability and predictability.
We also place a high value on improved schools, good health and a roads, water and electronic infrastructure for the 21st century. We need a state budget that pays the bills, supports education and provides for better health and infrastructure. We also need tax rates that make it reasonable to conduct business in a state that needs jobs.
Threading the needle carefully is to be highly valued. In that sense, listening to the best arguments, weighing options and taking the time to get it right is appropriate and needed. Thank you, legislative leaders, for your caution and care.
No one expects easy answers. We all need to participate in the solution. A satisfactory budget will require compromise and giving from all sides. We applaud state leaders who are working to get it right and we expect to carry our fair share for a better, brighter and more prosperous future for our fellow West Virginians.
Many signs point to an improving economy. Let’s all work together for a future that attracts jobs, creates prosperity and provides a solid platform for education, good health and unbounded opportunity for the next generation of West Virginians.
Roberts is president of the West Virginia Chamber of Commerce.