Aug. 1, 2010
West Virginia Delegate Objects to Actual Governmental Costs of Some Economic Development Programs
By Tony Rutherford
Huntingtonnews.net Reporter
Chester, WV (HNN) – Del. Patrick Riley 'Pat' McGeehan ( R) currently represents District 1 in the West Virginia House of Delegates, which includes the Chester and Weirton areas of the state. Elected in 2008 to the House, he has been a member of the Energy, Industry and Labor/ Economic Development and Small Business Committee, as well as Constitutional Revision, Business and Government Organization.
Del. McGeehan, a graduate of Hancock County Schools, wants to be State Senator McGeehan. However, he lost in the primary.
However, his insight into what he terms West Virginia “monopolistic” and “economic development” programs candidly shared strong hints of political favoritism , as well as economic development projects that cost too much in terms of amount spent per job created.
The Hancock County native points his fingers at incentives and favoritism state politicians have given to Mountaineer Casino Racetrack & Resort. Calling casino gambling licensure a type of political monopoly, though, the original racetracks were successful, they have had to come back and ask for additional privileges (ex. Table games) to compete with the non-government selected casinos that now spread across Pennsylvania.
“Most people disfavor gambling on some sort of moral argument that people get addicted to it.,” McGeehan said, adding, “I’m not for gambling as a source of tax revenue. I’m for gambling because you ought to be able to provide a service that doesn’t cost anyone else… free enterprise gambling.”
“The worst thing about what we have is this political entrepreneurship where you go to government and get a restricted monopoly privilege that no one else is allowed to have,” the GOP State Senate and current Delegate explained. “The Mountaineer [in Chester] achieved this monopoly privilege in the mid-90s when they were able to get the legislation [passed]. Their hired guns were all in office , and they used the common public arguments that we would create jobs, bring revenue and have all kinds of tax money for seniors. At the time Pennsylvania didn’t have gambling legalized, so The Mountaineer had an exclusive monopoly written by the government for years. That’s where they made all their money.
“Pennsylvania’s casinos came in knowing they would have to pull customers away , and had a lot more market driven guys, They are doing a good job, ” the Hancock County Republican said. Speaking of the licensure process in W.Va., he said, “a lot of problems that come when you start granting favors.”
Granted, the free market established in the Keystone State had the advantage of “West Virginia hindsight”
“As time went by, governments [out of state] started getting the hang of what they did [in W.Va.],” he said.
After the Pennsylvania casinos emerged, West Virginia facilities, such as Chester’s The Mountaineer, sent lobbyists back to the West Virginia legislature asking for an expansion of amenities (such as table games) in order to compete. To gain favorable status, the owners promised legislators and voters jobs and further development.
“We’re going to let you go forward with this business, but we are going to take over half of your revenue. When you have a monopoly that doesn’t matter, but , now, it matters. Instead of long term investments in new attractions, they tried to eliminate horse racing. The best way to solve [this] is to eliminate the regulation. It’s the only way to raise workers wages , improve worker treatment , and de-concentrate the wealth from the hands of a few. The greater good is served by the free enterprise system.”
Despite Ohio having a “form” of earnings taxes in place , the delegate pointed out East Liverpool, Ohio.
“You are liable to blow a tire out and if it’s at night you can’t see because they can’t afford to turn their street lights on. It’s very bad and labeled a Historic Under utilized Business Zone (HUUP Zone). Ohio has greater taxing flexibility than WV, but I’ve never heard of businesses that wanted to come from Ohio to WV [unless] they had some kind of political contact,” the delegate explained.
After the Great Depression, the greatest state tax burdens were “concentrated on anyone that produces anything of value.”
An executive of a Wheeling business with 130 employees told the delegate in March 2010 that he was trying to talk his out of state corporate bosses to move from Wheeling to Pennsylvania.
“Our state government puts a tangible value on their office desks and computers for this steel processor. There’s a whole lot of people like that; we’ve sucking them dry.”
Favoring capitalism over incentives, McGeehan believes that state assisted economic development job creation programs come at too high a price. “You need to make a list of all the projects that fail and the unintended consequences,” he said, citing attempts by government to lure a Wal Mart to Weirton. “If Wal Mart wanted to put a Wal Mart there, they could have just brought the property. A lot of tax dollars , time, effort and other resources to put a Wal Mart there. We spent ten years to get one to put Kroger’s out of business.”
For instance, the Cabela’s development in Wheeling, WV received about $35 million dollars in economic development funds. McGeehan said that does not include infrastructure (an exit ramp), direct grants and other public funds made available which , in his words, totaled subsidies to about $120 million dollars.
Referring to a 2004 economic impact study , the candidate stated “the employment growth rates was identical to the state average. How much effort and money did you use for the 700 Cabela jobs that came in? If you took the investment and subsidizes, the cost per job was estimated at $150,000 per job FROM TAX DOLLARS. And, most of those jobs don’t pay $150,000,” the delegate explained. “There’s little evidence that targeted tax incentives and grants produce benefits that exceed their economic costs.”
(Editor’s Note: The cost likely dropped as The Highlands development filled, but the ‘dream’ Wild Escape theme park remains just that. )
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West Virginia Delegate Objects to Actual Governmental Costs of Some Economic Development Programs
By Tony Rutherford
Huntingtonnews.net Reporter
Chester, WV (HNN) – Del. Patrick Riley 'Pat' McGeehan ( R) currently represents District 1 in the West Virginia House of Delegates, which includes the Chester and Weirton areas of the state. Elected in 2008 to the House, he has been a member of the Energy, Industry and Labor/ Economic Development and Small Business Committee, as well as Constitutional Revision, Business and Government Organization.
Del. McGeehan, a graduate of Hancock County Schools, wants to be State Senator McGeehan. However, he lost in the primary.
However, his insight into what he terms West Virginia “monopolistic” and “economic development” programs candidly shared strong hints of political favoritism , as well as economic development projects that cost too much in terms of amount spent per job created.
The Hancock County native points his fingers at incentives and favoritism state politicians have given to Mountaineer Casino Racetrack & Resort. Calling casino gambling licensure a type of political monopoly, though, the original racetracks were successful, they have had to come back and ask for additional privileges (ex. Table games) to compete with the non-government selected casinos that now spread across Pennsylvania.
“Most people disfavor gambling on some sort of moral argument that people get addicted to it.,” McGeehan said, adding, “I’m not for gambling as a source of tax revenue. I’m for gambling because you ought to be able to provide a service that doesn’t cost anyone else… free enterprise gambling.”
“The worst thing about what we have is this political entrepreneurship where you go to government and get a restricted monopoly privilege that no one else is allowed to have,” the GOP State Senate and current Delegate explained. “The Mountaineer [in Chester] achieved this monopoly privilege in the mid-90s when they were able to get the legislation [passed]. Their hired guns were all in office , and they used the common public arguments that we would create jobs, bring revenue and have all kinds of tax money for seniors. At the time Pennsylvania didn’t have gambling legalized, so The Mountaineer had an exclusive monopoly written by the government for years. That’s where they made all their money.
“Pennsylvania’s casinos came in knowing they would have to pull customers away , and had a lot more market driven guys, They are doing a good job, ” the Hancock County Republican said. Speaking of the licensure process in W.Va., he said, “a lot of problems that come when you start granting favors.”
Granted, the free market established in the Keystone State had the advantage of “West Virginia hindsight”
“As time went by, governments [out of state] started getting the hang of what they did [in W.Va.],” he said.
After the Pennsylvania casinos emerged, West Virginia facilities, such as Chester’s The Mountaineer, sent lobbyists back to the West Virginia legislature asking for an expansion of amenities (such as table games) in order to compete. To gain favorable status, the owners promised legislators and voters jobs and further development.
“We’re going to let you go forward with this business, but we are going to take over half of your revenue. When you have a monopoly that doesn’t matter, but , now, it matters. Instead of long term investments in new attractions, they tried to eliminate horse racing. The best way to solve [this] is to eliminate the regulation. It’s the only way to raise workers wages , improve worker treatment , and de-concentrate the wealth from the hands of a few. The greater good is served by the free enterprise system.”
Despite Ohio having a “form” of earnings taxes in place , the delegate pointed out East Liverpool, Ohio.
“You are liable to blow a tire out and if it’s at night you can’t see because they can’t afford to turn their street lights on. It’s very bad and labeled a Historic Under utilized Business Zone (HUUP Zone). Ohio has greater taxing flexibility than WV, but I’ve never heard of businesses that wanted to come from Ohio to WV [unless] they had some kind of political contact,” the delegate explained.
After the Great Depression, the greatest state tax burdens were “concentrated on anyone that produces anything of value.”
An executive of a Wheeling business with 130 employees told the delegate in March 2010 that he was trying to talk his out of state corporate bosses to move from Wheeling to Pennsylvania.
“Our state government puts a tangible value on their office desks and computers for this steel processor. There’s a whole lot of people like that; we’ve sucking them dry.”
Favoring capitalism over incentives, McGeehan believes that state assisted economic development job creation programs come at too high a price. “You need to make a list of all the projects that fail and the unintended consequences,” he said, citing attempts by government to lure a Wal Mart to Weirton. “If Wal Mart wanted to put a Wal Mart there, they could have just brought the property. A lot of tax dollars , time, effort and other resources to put a Wal Mart there. We spent ten years to get one to put Kroger’s out of business.”
For instance, the Cabela’s development in Wheeling, WV received about $35 million dollars in economic development funds. McGeehan said that does not include infrastructure (an exit ramp), direct grants and other public funds made available which , in his words, totaled subsidies to about $120 million dollars.
Referring to a 2004 economic impact study , the candidate stated “the employment growth rates was identical to the state average. How much effort and money did you use for the 700 Cabela jobs that came in? If you took the investment and subsidizes, the cost per job was estimated at $150,000 per job FROM TAX DOLLARS. And, most of those jobs don’t pay $150,000,” the delegate explained. “There’s little evidence that targeted tax incentives and grants produce benefits that exceed their economic costs.”
(Editor’s Note: The cost likely dropped as The Highlands development filled, but the ‘dream’ Wild Escape theme park remains just that. )
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