Good news, West Virginia! State leaders continue to make strides to make the area more attractive to investors and residents.
The State Journal reported that a recent Tax Foundation study rated West Virginia as having the 23rd friendliest tax climate. This places it slightly ahead of Virginia, Pennsylvania, and Kentucky yet far ahead of Ohio and Maryland who ranked a dismal 41.
The Mountain State scored best in corporate taxation at 20. Property taxes scored at 27. Individual income and sales taxes rated between the two.
This makes West Virginia an average state, but also shows improvement. Under Governors Manchin and Tomblin, the state has looked at gradually reducing tax burdens anticipating a payoff in better economic growth.
In other words, counting on a Laffer Curve type of result. Laffer was one of President Reagan's chief economic advisers early on, arguing that lower taxes brought better economic returns.
One must give credit to Democratic governors who don't shy away from an idea because it came from Reagan.
The State Journal also noted that recent administrations have focused on making the overall tax climate more friendly to all levels of business growth, instead of offering drastic temporary tax breaks to lure investment. This results in a more evenly developed economy with more opportunities for in state entrepreneurs.
Governor Tomblin, however, warned that the state's expected expenditures next year would outstrip revenues. He said that either taxes would have to rise or spending be cut. With Republicans pushing hard at taking over at least one house of the Legislature next year, most likely spending will drop.
Certainly increased federal demands of states under Obama have pushed many states to have to stretch their budgets. West Virginia is no exception. Just last week a state official warned that the state expansion of Medicaid would likely force a funding cut to higher education.
West Virginia has done very well in making the tax regime more entrepreneur friendly. If it makes equal strides in reducing regulation and establishing a state court of automatic appeal, the Mountain State could grow into a serious competitor for attracting business from anywhere.