Opinion: Good news, bad news in West Virginia’s business climate

By Woody Thrasher
West Virginia
Secretary of Commerce

There’s good news and bad news in West Virginia’s business climate.

First the good. The Department of Commerce, West Virginia University, and Marshall University just released their findings from McKinsey and Company’s extensive analysis of the state’s economy and future.  The project, known as WV Forward, creates a blueprint to transform our economy by identifying disruptive growth strategies and setting a vision for short and long-term development. 

The challenge to creating meaningful change for West Virginia will be in implementing its recommendations. 

In addition, the U.S. Chamber of Commerce recently released its 2017 Lawsuit Climate Survey which showed that West Virginia finally relinquished its claim to the #50 ranking, moving up five places to #45. Halleluiah. This project surveyed thousands of U.S businesses to assess how our state’s liability system is perceived for fairness and reasonableness. West Virginia has always ranked dead last. While advancing five spots may seem insignificant, it is this kind of incremental progress that shows the business community we are starting to get our act together in the Mountain State.

Give credit where credit is due. Our legislature has passed several important tort reform bills over the past couple years, including bills addressing punitive damages and joint and several liability. Coupled with measures that privatized worker’s compensation, reduced unnecessary regulatory burdens, modernized business taxes, and implemented right-to-work, our policymakers have made it easier to recruit new companies to West Virginia and help our existing ones grow. 

Now the bad news. We continue to bottom-dwell in several important categories such as entrepreneurialism, educational attainment, workforce participation, and the treatment of business inventory, equipment, and machinery for tax purposes. We rely on single industries to balance our budgets. Electricity rates are surging in the wrong direction. And we lack large swaths of flat land, making meaningful development prohibitively expensive in many areas of the state. These practical realities conspire to hold the state back from achieving its potential.

Another overlooked problem is the frustrating speed at which cases are moving through our court system. For example, three natural gas-fired power facilities have been announced in West Virginia but none have begun construction. Each project is estimated to cost between $600 and $850 million. The first project, located in Marshall County, was poised to move forward after it received a siting certificate from the Public Service Commission and an air quality permit from the West Virginia Department of Environmental Protection. However, a lawsuit was filed challenging the air quality permit more than a year ago and it has languished on Judge Joanna Tabit’s docket ever since. In a state as starved for investment as West Virginia, these businesses deserve quicker action from our courts.

In the meantime, funding to finance and build that project is in jeopardy, potentially killing an investment that creates hundreds of construction jobs and permanent jobs, greatly increases the tax base in that community, and adds tremendous value to a natural resource right here at home instead of shipping it away. Moreover, if that project fails due to uncertainty in our court system, it sends a chilling message to owners of the other two projects that are in the pipeline. Meanwhile, our neighbor states in the shale valley are growing this emerging industry, with Ohio announcing 14 of these projects and Pennsylvania 36. 

Much more needs to be done to keep moving up the rankings. This means continuing to improve our legal climate, tax structure, educational systems, and workforce. And just like any good business, we need to smartly deploy funding in our communities designed to capture a return on that investment.  Otherwise, the good news in West Virginia will be eclipsed by the bad.

More change is needed.