Watchdog Groups: West Virginia’s $1.7 Billion for Nucor is a Boon for Neighboring Ohio and Kentucky

14/01/2022

January 14, 2022

Kelly Allen (West Virginia Center on Budget and Policy) 304-612-4180
Caitlin Johnson (Policy Matters Ohio) 216-361-9801 or cjohnson@policymattersohio.org
Jason Bailey (Kentucky Center for Economic Policy)
jbailey@kypolicy.org
Greg LeRoy (Good Jobs First) 202-494-0888 or goodjobs@goodjobsfirst.org

Watchdog Groups: West Virginia’s $1.7 Billion for Nucor is a Boon for Neighboring Ohio and Kentucky

Charleston, Cleveland, Lexington, and Washington — West Virginia residents will be footing the bill for the $1.7 billion handout to steelmaker Nucor Corporation, while the project is likely to benefit hundreds of workers who reside in Ohio and Kentucky. That’s the consensus from four economic policy watchdog groups spanning the region.

In a hasty special session Monday and Tuesday, the West Virginia legislature suspended regular order to rush to enact a new tax incentive worth at least $1 billion per project, for an unnamed corporate beneficiary. That company was later revealed to be Nucor, Inc., the nation’s largest steel producer. Its projected $2.7+ billion investment will apparently entitle it to tax credits totaling $1.35+ billion (at 50% under the new law). The deal also includes $315 million in matching cash for the company’s infrastructure investments.

The project location is in Mason County, on West Virginia’s border with Ohio. Mason County actually protrudes into Meigs County, Ohio and borders Gallia County, Ohio. It is not far from Lawrence County and other counties in Kentucky. Indeed, Mason County’s Economic Development Authority touts three main highways: Route 35 (which crosses the Ohio River into Ohio); Route 64 (which goes to Kentucky); and Route 77 (which goes north, linking to more bridges into Ohio, and then to Ohio itself). The Mason County EDA website even touts nearby Ohio employers, including Bob Evans, Holzer Clinic/Medical Center, Gavin Plant, and the Kyger Creek Power Plant.

With no West Virginia hiring provisions, the jobs and tax revenues from this project will greatly benefit Kentucky and Ohio while the full cost of the corporate tax subsidy falls on West Virginia taxpayers.

“West Virginia’s Nucor deal is the latest billion-dollar reason why states should cooperate on jobs instead of passively allowing themselves to be manipulated by corporations,” said Greg LeRoy of Good Jobs First. “The professional euphemism for this problem is ‘leakage.’ Hundreds of American communities have multi-state commuting sheds.”

“Our states should work together to reverse the rapidly escalating war for bigger and bigger corporate tax breaks and subsidies,” said Jason Bailey of the Kentucky Center for Economic Policy. “Corporations are the real winners, and our states and their residents lose out when they play us for massive subsidies of decisions they would make anyway.”

“Corporate tax subsidies like the one passed by the West Virginia Legislature this week create a race to the bottom among neighboring states, where taxpayers are left footing the bill. In addition to over $1.3 billion in tax breaks, lawmakers are using pandemic relief funds to supplant state dollars and hand Nucor $315 million in cash,” said Kelly Allen of the West Virginia Center on Budget and Policy. “In this case, West Virginia taxpayers are on the hook, while Kentucky and Ohio will see a big chunk of any economic and tax-revenue benefits—though research shows that these deals rarely produce their promised value for local communities.”

“The winners of these subsidies today could well be the losers tomorrow,” said Hannah Halbert, executive director of Policy Matters Ohio. “Tax incentives have never been the main reason companies locate where they do, and they make it more difficult for states to provide public services that businesses and employees depend on—including the roads they drive on and the public education system that instructs their children. State should end the subsidy war and focus on providing for the needs of their communities.”  

Map shows West Viriginia in relation to Kentucky and Ohio

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