Republican gubernatorial candidate Bill Maloney is certainly getting a lot of attention for his remarks about the tax credit legislation Gov. Earl Ray Tomblin eased through the legislature this session in the hopes that it would help lure a natural gas “cracker” plant to West Virginia. Speaking with my buddy Hoppy Kercheval on the MetroNews show Talkline, Maloney said:
If we’d fix our courts and our tort reform issues we’d stand a lot better chance of getting a cracker than we would be in passing this huge bill that we just pull down our pants to get a cracker, when everybody should be getting the same tax breaks.
But perhaps the real story about this sort of thing was further into today’s Daily Mail, where business editor George Hohmann revealed the findings of a new report by Gov. Tomblin’s own Tax Department about these sorts of tax breaks and other incentives, concluding among other things:
The credit programs may help some individual business taxpayers, but the overall impact of the credit programs on economic growth is arguable.
Remember that when the cracker tax break passed, Gov. Tomblin said:
To spur economic development, attracting an ethane steam cracker has been my number one goal and I am so pleased, with this vote, the legislature has sent a clear signal that they are joining me in this effort. This tax relief bill, I believe, showcases our State’s commitment to being a great business partner today and long into the future.
Greg LeRoy and his group Good Jobs First have written extensively about the ineffectiveness of tax incentives as an economic development tool, and the great investigative reporters Barlett and Steele have also exposed these sorts of programs.
Of course, the lack of any proof that such tax breaks work overall didn’t stop West Virginia lawmakers from falling all over themselves to approve the governor’s cracker bill — and to do so without even having any clear analysis of what the potential costs of the legislation might be. It took the good folks over at the West Virginia Center for Budget and Policy to inform us that the price could easily be $300 million.
Not for nothing, but the most recent reports (see here, here and here) indicate it might be a while before Shell actually moves forward with the cracker plant West Virginia political leaders are spending so much energy trying to lure to our state …