It’s no secret that in recent years the economy and population in many parts of Appalachia have taken a sharp decline.
Leaders in McDowell County, West Virginia, saw their locality’s unemployment rate top out at 15% and currently have a population that is only 19% of its 1950 level — and in many portions of neighboring Southwest Virginia, the pictures aren’t much brighter.
The problems the land formerly known as “coal country” presently face are extensive and well documented; however, the solutions have been few and come with very high price tags: ranging from constructing an interstate highway through the region to “buying out” everyone who still calls this land home and turning the region into a giant national park.
One member of the Virginia House of Delegates, however, has offered a truly revolutionary idea that is designed to attract new life in the form of businesses and residents to this area.
Delegate James W. “Will” Morefield, who represents the far Southwestern Virginia Appalachian counties of Bland, Buchanan, Russell (part), and Tazewell in the state’s General Assembly, announced details of legislation that he intends to file in the upcoming 2018 legislative session to exempt corporate and personal income tax to qualifying companies and their employees in some of the Commonwealth’s poorest localities.
Delegate Morefield commented, “Our region is in desperate need of jobs. The poorest localities in Virginia require more than just the status quo for economic development and we need a significant change in policy that is tailored specifically for the most distressed areas of the Commonwealth.”
Morefield says that his legislation will “exempt residents and corporations in some of Virginia’s poorest localities from corporate and personal income tax for a period of ten years.”
“After months of work with regional leaders, we have formulated a proposal that we believe will be fiscally conservative with regard to the Commonwealth’s budget. Leaders from Southwest and Southside Virginia are confident this will make a significant impact and will encourage new industry to locate there. Those areas have suffered long enough. With data collected from a recent Go Virginia study we were able to qualify jurisdictions based on poverty rates, population change, and unemployment rates. To our knowledge this type of legislation has never been proposed. Other states around the country have proposed and adopted corporate tax breaks that benefited corporations primarily, but not specifically included both corporate and personal income tax exemptions for the purpose of attracting new industry and encouraging existing industry to expand in some of the country’s most distressed areas.”
Under the delegate’s plan, corporations that invest at least $5,000,000 in real property or create at least 50 jobs in the Counties of Bland, Buchanan, Dickenson, Grayson, Henry, Halifax, Lee, Pittsylvania, Russell, Scott, Smyth, Tazewell, or Wise; or the Cities of Danville, Galax, Martinsville, or Norton, will be free from paying income taxes to the Commonwealth of Virginia for ten years.”
The bill also establishes a subtraction from individual income tax for employees of such a corporation or pass-through entity so long as such employees’ residence is in one of the localities.
The bill is picking up strong momentum throughout the region among fellow delegates. “Providing economically distressed areas this tax incentive will do more to spur economic development and job creation than anything else,” said Delegate James Edmunds.
Delegate Jeff Campbell agrees, stating, “This legislation is forward thinking and well calculated to further incentivize companies to locate in the Commonwealth. Economic development and job creation is job number one for the Southwest delegation and I look forward to working closely with Delegate Morefield and my colleagues in the House to help usher this bill through the General Assembly.”
Despite its great appeal to the localities the bill includes, there is great concern in the counties that border the included counties – as they fear the proposal would destroy any hope of new investment and job creation in their localities.
Share this article with your friends on Facebook: