West Virginia Governor Patrick Morrisey holds a press conference at the capitol Thursday, Jan. 16, 2025.
CHRIS DORST | Gazette-Mail
Newly elected Gov. Patrick Morrisey has launched his “Backyard Brawl†initiative through executive order. He’s promised to improve West Virginia’s economic rankings by outpacing neighboring states.
Through his initiative, Morrisey has vowed to continue cutting the state’s personal income tax. He’s also said his administration will review government spending and cut regulations that he says will make the state more attractive for businesses.
As businesses decide where to locate, they’re also looking at infrastructure, workforce, education and the quality of life for workers, said Heather Stephens, director of the Regional Research Institute at West Virginia University.
“When we think about being economically competitive, we have to be thinking more holistically about the things that businesses care about,†she said.
At a news conference Thursday, Morrisey said he wanted to focus on three key initiatives: energy policy, infrastructure improvements, and increasing the state’s economic competitiveness to entice businesses.
“I want to make sure that we’re winning compared to all the states that we touch,†he said. “I want to start to see our standard of living go up and expand the tax revenue base so that every individual citizen in the state has lower taxes and more take-home pay.â€
A new spin on an old idea?
Morrisey’s competitive rhetoric might be new, but cutting taxes to attract businesses is an old idea. Previous governors from both parties have talked about the urgency of improving West Virginia’s economy to support tax cuts.
In the late 2000s, Democratic Gov. Joe Manchin championed business tax cuts to create jobs and grow the state’s economy. Legislators eliminated the business franchise tax and reduced the corporate income tax.
Proponents of the cuts argued the cuts would spur economic development and make the state more competitive than neighboring states to attract businesses. In 2015, the tax cuts cost $205 million in lost revenue, according to a state Department of Revenue estimate.
About a decade later, Republican Gov. Jim Justice pushed to cut the personal income tax to drive job growth and bring people to West Virginia. He justified the tax cuts by pointing to the state’s budget surpluses, in part driven by federal pandemic relief dollars and record energy prices.
Justice also used the budget surpluses to fund economic incentives for companies that decide to locate in the state. But Morrisey inherits a budget deficit of $400 million next year and has charged his administration with reviewing all major funding decisions.
“We cut taxes over and over and over,†Gov. Justice said during his farewell address earlier this month. “27 times we cut taxes.â€
Compared to neighboring states like Maryland, Ohio, Kentucky, Virginia and Pennsylvania, West Virginia’s property tax and personal income tax structure is already competitive, said Sean O’Leary, senior policy analyst at the West Virginia Center on Budget & Policy.
“If having the lowest income tax is the key to being the most prosperous state, it should be happening already,†he said.
West Virginia still ranks poorly compared to other states in areas like education, job growth and workforce participation according to a jobs report released by the West Virginia Chamber of Commerce. The group supports business leaders around the state and has recommended ways to address those barriers.
State business leaders said earlier this month that they are optimistic about the Morrisey administration and that West Virginia’s workforce issues need to be addressed. The state’s low labor force participation rate has also remained challenging for businesses.
Gov. Patrick Morrisey announces eight first-day executive orders on Tuesday, Jan. 14, 2025.
WCHS-TV | Courtesy image
During the press conference Thursday, Morrisey said the state needs to recruit and train blue-collar tradesmen like electricians, contractors and plumbers. But cutting taxes and regulations is the path to economic success.
“Increasing workforce participation is the number one issue that we have to address,†Morrisey said. “One of the ways that we do that is to better address the fundamentals in terms of taxation and regulation. If we make things more attractive, we’re going to have more people coming to our state.â€
This story was originally published by Mountain State Spotlight. Get stories like this delivered to your inbox once a week by signing up for their free newsletter at mountainstatespotlight.org/newsletter.
