Members of the WV House of Delegates voted last week to hand over some more of our hard-earned tax dollars to wealthy investors. It’s unclear whether the proposed bill would be a boon for most West Virginians. But one man could stand to benefit: Governor Jim Justice.
House Bill 1113 creates state “Opportunity Zones,” which would mirror the federal Opportunity Zones created in 2017 as part of federal tax reforms.
If the Senate agrees to the bill, investors who put money into certain geographic areas will get a tax break not only from the federal government, but also from the state of West Virginia.
The official story is that this will encourage more investment and create jobs. The problem is that since Opportunity Zones are so new, we don’t know yet whether they actually work.
Several studies show that similar state and local tax incentives haven’t been cost-effective at increasing employment in poor areas. One study called the tax credit approach “limited and costly.” And it will take precious taxpayer money out of our state budget. This is money that could be used for programs proven to reduce poverty, such as early childhood education or tax credits for working people.
Democrats offered an amendment when this bill was being debated, but the majority Republicans didn’t even want WVU to study these ‘zones’ to see if they were really working!
What’s more, the locations of the 55 opportunity zones in West Virginia don’t all make sense. One opportunity zone is located in Jefferson County, in one of the highest income areas of the state. It surrounds the site for a proposed coal-fired manufacturing plant. The plant has been fought against by the local community, but the governor himself championed as a possible market for his own coal.
Others are clustered around Justice’s properties at the Greenbrier Resort. Many high-need areas, such as a predominantly African American area of the West Side in Charleston, got left out.
And guess who got to choose which areas would be opportunity zones would be located? The governor himself.
Finding new ways to invest in the economies of our rural towns is important. But it’s time for state leaders to come up with real policies that work for working people, instead of their own pocket books.