CHARLESTON, W.Va. -- West Virginia does a poor job evaluating whether business tax incentives create jobs and spur economic development, state lawmakers heard Tuesday.
Ted Boettner, executive director of the West Virginia Center on Budget & Policy, said state and local governments give business tax breaks -- valued in the hundreds of millions of dollars -- every year. But the state doesn't determine whether the incentives are working.
"We're not able to see whether these tax expenditures are creating jobs like they're supposed to do," Boettner told members of a House-Senate economic development committee on Tuesday.
Boettner rattled off a list of business tax subsidies -- designed to lure companies to West Virginia or retain jobs -- that the state never examines: the Film Industry Investment; Qualified Additions to Manufacturing Facilities; Natural Gas Industry Jobs Retention Credit; Thin-seamed Coal Tax Credit; and Manufacturing Property Tax Credit.
"There's no indication who is receiving these," he said.
The state does review four business tax credits, but the reports get published only once every three years and include out-of-date data, Boettner said. The reports don't determine whether the tax credits spurred job growth, and the names of companies that received tax breaks aren't disclosed.
"A lot of these are very inadequate," Boettner said. "The findings are inconclusive and provide virtually no evidence if tax credits are working."
West Virginia also doesn't track property tax breaks given to businesses by cities and counties.
Boettner said such subsidies reduce property tax revenues, forcing the state to cough up more revenue to fund K-12 schools under the state's school-aid formula.
"If you're not looking at local property taxes, you're not looking at what's happening at the state level," Boettner said.
The state Tax Department has the right to audit companies to determine whether those receiving tax incentives keep their promises to create jobs. Such audits are never published, Boettner said.