Tourism bill could spur Panhandle's economy

February 28, 2003

In a move that could dramatically boost tourism in West Virginia's Eastern Panhandle, a state Senate committee has approved a bill to give developers of tourist attractions a big tax break. If there's a downside to this proposal, it's not apparent now.

The bill, which originated in the Senate Economic Development Committee, would work in this way: A developer who agreed to invest $5 million or more in a tourist attraction that would draw more than 25 percent of its visitors from out of state would get a 25 percent break on its sales taxes for 10 years.

According to state tourism officials, Kentucky used a similar tax break to lure a $100 million auto race track and an $80 million aquarium, whose developers had been considering sites across the river in Ohio.

Except for that percentage of tax revenue that would be forgiven for a decade, there would be no cost to the state, said its sponsor, Sen. Larry Rowe, D-Kanawha. Rowe noted that the bill even requires developers seeking the tax break to pay for consultants to certify that they're eligible.

The Senate Finance Committee has amended the bill to require approval in the 2004 session before it could take effect. Another change would bar use of the sales-tax break if developers were getting other state incentives.

It's not clear why the committee wants to wait a year, unless it's to get a closer look at what was done in Kentucky. The way the legislation is structured now, it appears that the developer assumes all the cost and the risk, and after 10 years, the state would start getting its full share of the revenue.

Eastern Panhandle representatives need to give this proposal a close look, and if there are no hidden problems, push it hard. Tourism doesn't create many high-tech jobs, but it does draw people with money to spend who do not require much in the way of services.

They spend their money in an area, but don't ask taxpayers there to educate their children or provide them with municipal water or sewer. As we said, if there's a downside to this idea, we can't see it now.

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