Kelley Goes
Cabinet Secretary, WV Department of Commerce
(This commentary appeared in the Jan. 1, 2010 edition of the State Journal.)
The storm that swept through the global economy has thrown individuals, governments and industries into financial disarray. While West Virginia has been challenged by these difficult times as well, this state is in a more favorable position relative to many others in the country.
Today West Virginia is well placed for new and expanding companies that create good jobs here. The state will continue to strengthen its situation over the next few years as the recovery, now in its early stages, gains momentum.
One new tool is www.WVCommerce.org, launched this fall to promote West Virginia’s recreation, business and lifestyle opportunities with one Web platform. This powerful Web marketing tool allows Commerce to cross-promote its services and the latest information on West Virginia to create a well-rounded picture of the state. The site features GIS mapping integration, customized travel itinerary planning and detailed census and work force reports presented alongside shovel-ready locations for new and expanding businesses.
Successes
Over the years, West Virginia’s prudent financial management and “open for business” initiatives have attracted the notice of industry leaders at home and abroad.
The expansion of the Essroc cement plant is Martinsburg is nearing completion. The approximately $500 million upgrade will more than double production capability and improve the plant’s environmental footprint. The Governor’s Guaranteed Work Force Program helped secure training for Essroc employees on the modernized processes.
Kureha Corporation broke ground in 2008 on its $100 million specialty plastics plant at Belle. The plant will produce polyglycolic acid (PGA). Breakthrough technology will enable the plant to make PGA cost-effectively in commercial volumes. PGA provides a gas barrier 100 times that of the bottle plastic polyethylene terephthalate (PET), enabling container makers to save money by using less PET.
New Haven is the site of one of the nation’s first carbon-capture-and-storage pilot projects. In 2007, AEP announced plans to invest more than $70 million to validate the process at its Mountaineer Power Plant. Following successful validation, AEP plans to install the technology on a commercial scale.
During the last several years, West Virginia has worked diligently to secure its stable financial footing. In 2006, West Virginia privatized Workers’ Compensation, decreasing the average loss cost rate by more than 40 percent and saving employers roughly $150 million to date. In 2008, the Cato Institute’s Fiscal Policy Report Card on American’s Governors reported that West Virginia had enacted “the most pro-growth tax reforms” of any other state.
Pro-growth initiatives
West Virginia has continued making improvements to its business climate through tax reduction measures. Approximately $70 million of business tax burden was removed in fiscal year 2009 and more than $100 million during the past four years.
A series of phased reductions will cut the corporate net income tax rate to 6.5 percent by 2014. The business franchise tax rate will be phased out entirely by 2015.
The Aircraft Valuation Tax Credit gives aircraft owners an economic advantage to land in West Virginia. Aircraft owned or leased by commercial airlines, charter carriers, private carriers and private companies are valued for property tax purposes at the lower of fair market salvage value or 5 percent of the original cost of the property.
Now business is soaring for West Virginia businesses such as Executive Air, a full-service private terminal based at Yeager Airport in Charleston. Since the West Virginia Aircraft Valuation Tax Credit went into effect, the firm has acquired 18 new customers.
The High-Technology Business Property Valuation Act attracts high-technology businesses and Internet advertising businesses to West Virginia. The act reduces property tax valuation for equipment and tangible personal property to approximately 5 percent of the tax that would otherwise apply. In addition, sales tax is eliminated from all purchases of prewritten computer software, computers, computer hardware, servers, building materials and tangible personal property for direct use in a high-technology business or an Internet advertising business.
The new valuation act has generated additional interest in West Virginia as a location for high technology businesses and it is giving the state another economic development tool when meeting with potential new employers.
Knowledge-based economic development
The state is increasing its investment in intellectual and technological assets. Today’s genuine West Virginia products include control systems by ATK Tactical Propulsion in Rocket City; biodegradable polymers for industrial and medical applications through genetic engineering of bacteria by Progenesis Technologies in South Charleston; and the world's leading intraocular lens by Alcon Laboratories in Huntington.
The West Virginia Research Trust initiative, known as “Bucks for Brains,” is a $50 million research endowment to enhance the research capacities at West Virginia University (WVU) and Marshall University and improve knowledge-based economic development across the state. The universities’ research is expected to generate discoveries that evolve into marketable products, business spinoffs and jobs.
WVU’s Center for Identification Technology Research (CITeR) is the lead academic partner for the FBI’s new Biometric Center of Excellence. Protea Biosciences, Inc., a graduate of the WVU Business Incubator, develops innovative products to produce faster, more accurate results to scientists working in protein analysis.
Marshall’s new Institute for Interdisciplinary Research (MIIR) will focus on developing medical tools to study genes and enhance the use of the medicine and care already available.
All ships are tossed in a tempest – even a ship of state. By continuing a course of fiscal responsibility and innovative measures to promote business development, West Virginia is steering toward economic improvement.
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