Editorial: Tax credit proposal could help economic development
Attracting new industry to any part of our region is hard work.
The state has had only a handful of job announcements over the past few years, and the employment losses in the energy sector have left the state with little to no job growth at all. In fact, the Joint Economic Committee for Congress reports that jobs in West Virginia are down 2 percent, or 12,000 positions, since the start of the Great Recession in 2007.
But attracting new employers to the most rural parts of the state - especially those hard hit by coal job losses - is even more difficult.
Economic developers also face a host of other challenges - limited broadband, inadequate roads, difficult terrain and an under-skilled workforce just to name a few.
In many cases, it will take some serious incentives to attract new investment, and U.S. Sen. Shelley Moore Capito, R-W.Va., is proposing legislation to add one for our region.
The New Markets Tax Credit program has provided more than $40 billion in tax credits to spur economic development projects in low-income regions across the country.
Investors can receive a 39 percent tax credit over seven years for projects in those regions, ranging from redevelopment efforts to health-care facilities and manufacturing.
But West Virginia has received less than 1 percent of that money, approximately $97 million for 17 projects. Capito's proposal, called the "Creating Opportunities for Rural Economies Act," would set aside 5 percent of tax credit money for 12 states with significant job losses from coal. Those states would include West Virginia, Ohio, Kentucky, Alabama, Colorado, Indiana, Illinois, New Mexico, Pennsylvania, Texas, Utah and Virginia.
That could greatly increase the incentives available for the struggling rural parts of our region.
"By leveraging the power of the New Markets Tax Credit Program, the CORE Act presents a tremendous opportunity for under-served communities across the country to receive critical funding for projects that will help create new job opportunities, spur business investment, revitalize communities and strengthen struggling economies," Capito said in a news release this week.
But West Virginia economic developers would still have to identify potential projects and guide investors to apply for the tax credits.
A lack of awareness about the New Markets Tax Credit program has likely contributed to low investment in West Virginia so far. Capito recently met with a roundtable of area economic development leaders to talk about how the tax program can work and how they can get involved.
Our region certainly deserves the assistance, and with the proposed legislation and more aggressive participation, we will stand a better chance of attracting the new job investment we sorely need.
Source: Huntington Herald-Dispatch
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