CHARLESTON, W.Va. -- West Virginia would offer a 25-year break from property taxes to attract a new chemical plant fueled by the state's emerging Marcellus natural gas industry, under a proposal from Gov. Earl Ray Tomblin that debuted in the Legislature on Tuesday.
A second bill introduced from Tomblin's agenda would continue to exempt the state's ailing timber sector from severance taxes, while a third would repeal a tax on telecommunications services that no longer yields revenue.
West Virginia is competing with other Marcellus Shale states for a so-called "cracker" plant. This massive facility would convert (or "crack") ethane, a byproduct of Marcellus wells, into the highly useful chemical compound ethylene.
The state Department of Revenue estimates that a $2 billion plant would create 12,000 jobs, both direct and indirect as well as induced by the resulting consumer activity. Revenue officials say these jobs would provide $600 million in wages annually.
"We really see it as a way to revitalize manufacturing in West Virginia," Karen Price, president of the Manufacturers Association, said of a cracker. She added, "It won't just change the manufacturing economy, it will change the whole economy."
Tomblin's proposal would benefit a company that invests at least $2 billion to build a cracker. It would slash the appraised value of real estate as well as equipment and inventory to 5 percent of market value. It expands on a 10-year tax break passed last year, at Tomblin's request, to spur spinoff industries from drilling the natural-gas-rich Marcellus reserve.
Price's group supports the bill as a "great economic development tool," she said Tuesday.
"I think we're pretty well positioned [for a cracker]. The tax issue is one that sticks out like a sore thumb," Price said.