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Tax credit story disputed

CHARLESTON, W.Va. -- State Commerce Secretary Keith Burdette on Wednesday disputed a recent New York Times article that claimed that West Virginia gives more than $1 billion of tax credits and incentives each year to recruit and retain businesses.

"That article was poorly researched and comparisons poorly made," Burdette said at a joint meeting of legislative interim committees on finance and economic development.

Burdette said the article cited $1.2 billion of sales tax exemptions in the past budget year, but failed to note that the vast majority of that amount was in federal tax credits to utility companies to upgrade power plants under the Clean Power Plant and Modernization Act.

In reality, he said the total value of all tax credits and exemptions given by the state in the budget year was $32 million, and $10 million of that was from the state Film Industry Investment Act.

By comparison, he noted, Pennsylvania has offered a $1.2 billion package of tax incentives to Shell Energy to attract a cracker plant.

Burdette also said that in eight years, the state has authorized four forgivable loans totaling $9.5 million to attract businesses, but said those loans paid off in $270 million in private investment, and the creation of more than 1,500 full-time jobs with benefits.

"The facts are, for our size and resources ... we're managing to compete relatively well," he told legislators.

Burdette said the portfolio of tax incentives the state Development Office can offer to attract new businesses are not particularly unique or unusual from those available in other states.

The reality, he said, is that the most desirable business developments, such as the Macy's distribution center, have multiple site options in multiple states.

"Every day we compete against these other states for every opportunity," Burdette said.

He said all of West Virginia's business incentives are performance-based, and credits apply to economic production after the fact.

Burdette conceded that in one of his first legislative meetings after becoming secretary in September 2010, he was asked to provide a list of all financial assistance and tax credits offered through the Development Office.

"To be honest, I was embarrassed to discover we didn't have such a list. It didn't exist," said Burdette, who said the complete list is now available in print copies and on the office's website.

The Development Office also has a four-page brochure outlining development assistance options. 

However, Delegate Barbara Fleischauer, D-Monongalia, chided the Development Office for insufficient transparency when it comes to economic incentives to attract business investment.

"Legislators have been asking for transparency since the Underwood administration," she said. "It's not that I think all business tax subsidies are wrong, but we need that data."

Reach Phil Kabler at philk@wvgazette.com or 304-348-1220.


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