W.Va.’s drop in ALEC report cited in tax reform push

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W.Va.’s drop in ALEC report cited in tax reform push
By Phil Kabler, The Charleston Gazette

Launching the inaugural meeting of a new legislative interim committee on tax reform Monday, Senate President Bill Cole, R-Mercer, cited the American Legislative Exchange Council’s “Rich States, Poor States” report, which in its most recent edition dropped West Virginia from 30th to 36th in its rankings.

In talking with the authors of the study, Cole said he was told the drop wasn’t because of adverse changes in the state’s tax code, noting, “It’s more or less, the other states are moving forward in aggressively cutting taxes.”

Cole added, “I think the time has come that we need to act.”

House Speaker Tim Armstead, R-Kanawha, said of the mandate of the Joint Select Committee on Tax Reform: “We have a tax structure in West Virginia that’s broken, that’s burdensome, and that’s bewildering to a lot of people.”

Headed by Senate and House Finance Chairmen Mike Hall, R-Putnam, and Eric Nelson, R-Kanawha, the committee is to spend the spring and summer studying the state’s tax system, with an aim of making reforms to make the state more attractive to business investment.

“I think the first thing we have to determine is what does a fair tax system look like,” Hall said.

The committee has set meetings for May 4 and May 18 to hear input from “various resources” on tax reform.

“It is a very broad goal we have,” Nelson said. “Everything is on the table.”

However, Ted Boettner, executive director of the West Virginia Center on Budget and Policy, was dubious of the committee’s endeavor.

“We’ve already cut business taxes by over $225 million a year, and we have 16,000 fewer jobs now than we did when we passed those tax cuts,” he said, referring to the reduction of the state corporate net tax and elimination of the business franchise tax.

“We shouldn’t double down on failed policy that hasn’t created jobs or made our economy stronger,” he said.

Armstead suggested the committee would begin by reviewing tax reform studies undertaken during the administrations of Govs. Cecil Underwood and Joe Manchin.

“We had good ideas that have been brought forward … but we’ve failed to act on them,” he said.

Hall said the committee will look at what other states have done to make themselves attractive locations to relocate.

“Are there types of taxes we can move around to motivate people to come to West Virginia?” he asked. “We’ve had some reform already, but we need to do more.”