Brian Dayton: Amendment 2 offers job, population growth (Charleston Gazette-Mail)

September 8, 2022

This spring as schools in West Virginia were completing their school year I had a sudden realization that members of the Class of 2022 were newborns when I graduated high school. Talk about a punch to the gut and a stark reality check that time truly flies! That prompted me, however, to dust off my John Marshall High School yearbook and look through some memories from nearly two decades ago.

As I was flipping through the pages I came across a photo of the students who were in the National Honor Society. There were ninety-five in the 2004 class of that group, and each of us had at least a 3.3 GPA for induction into the society. I’ve kept in touch with a fair number of these people over the past eighteen years, and I’m fortunate to count a few of them as some of my closest friends to this day. Seeing this photo, however, stirred my curiosity. All of us grew up in Marshall County, but how many still live in West Virginia?

What I found truly shocked me. From my estimation, well over 60% no longer live in West Virginia. These classmates, who were among the top academic performers in my school, now live in places such as Columbus, OH; Pittsburgh, PA; Washington, DC; Georgia, Tennessee, Florida, Texas, North Carolina, and New Jersey. Talk about exporting talent. I don’t know the reasons each of them moved away, but I would say a safe bet is that many of them moved to locations in search of a good job. Which is what brings me to one of the most important issues facing voters on November 8 – Amendment 2.

Amendment 2, if passed by the voters, would give the Legislature the authority to reduce tangible personal property taxes on manufacturing machinery and equipment, business inventory, and personal motor vehicles. These are taxes, especially those on machinery, equipment and inventory, that are especially problematic to attracting new development and to those businesses who must compete with other businesses in other states.

In August, 2022 West Virginia had 47,400 manufacturing jobs in the state, down from 49,700 in August 2009. Let’s look at Ohio, however. Between 2000 and 2005, Ohio lost nearly 200,000 manufacturing jobs. Faced with such a major decline, policymakers in Ohio began a phaseout of their state’s tangible personal property tax on businesses. This tax, which was also levied on manufacturing machinery and equipment, was completely phased out by 2009. The 613,000 manufacturing jobs in August 2009 have now grown to almost 683,000 in August of this year. That’s 70,000 new high-paying manufacturing jobs just across the river, while West Virginia has remained stagnant and has actually lost manufacturing employment.

More importantly, those 70,000 new jobs only represent the direct jobs that have been created. That number does not take into account the numerous other jobs that have started in retail, professional services, education, healthcare, etc. that typically follow major economic growth in a sector. When Ohio policymakers saw a crisis, they kicked into action. Unfortunately, lawmakers in West Virginia are powerless without the passage of Amendment 2.

During the 2021 Session of the West Virginia Legislature the House and Senate voted to put Amendment 2 on the ballot. The vote in both chambers was overwhelmingly bipartisan, signaling the strong support and realization that a change is necessary. For decades report after report has highlighted that these tangible personal property taxes are direct impediment to attracting new jobs and economic development. The problem, however, is that these taxes are enshrined in the state’s constitution – a holdover from the days of The Great Depression.

I would be remiss if I did recognize that West Virginia has scored some major developments in the past few years, but many if not all of these companies have been attracted using PILOT (Payment in Lieu of Taxes) agreements that exempt them from these troublesome taxes. I for one am thankful that PILOT agreements have been an option, but Amendment 2 will give lawmakers the opportunity to find a solution and level the playing field for all businesses – those we hope to attract and those who have been here providing jobs.

I am hopeful that future graduating high school classes from West Virginia will be able to look back and realize that the majority of their classmates were able to remain in the state. That will require more good jobs and more opportunity, and it will require a different approach than we’ve used in the past. That is why I am proudly voting for Amendment 2.

Brian Dayton serves as Vice President of Policy & Advocacy for the West Virginia Chamber of Commerce.