State income taxes could be slashed – or even eliminated – for state residents the first two years after graduation from an institution of higher education under a plan unveiled by the Charleston Regional Chamber of Commerce today at its annual “Issues & Eggs” legislative breakfast. The plan also calls for $500 state tax credit for interest paid on a qualified student loan.
Chamber Chairman Mike Basile, Spilman, Thomas & Battle, announced the proposals to an audience of nearly 300, including an estimated 65 West Virginia Senators and Delegates, at the Charleston Marriott Town Center.
The “Intellectual Capital” legislation outlined by the Charleston Chamber calls for a $25,000-per-year reduction of the federally-adjusted annual income for the purposes of calculating an individual’s state income tax. The reduction would only be available to West Virginians residing and working in the state for two years following graduation from a qualified institution of higher education with a two-year, four-year or advanced degree.
This proposal would translate into a sizeable pay increase for new graduates at the beginning of their careers when their salaries may be low and their student loan burden high. There would also be a major benefit for graduates, particularly those from law, business and medical schools, whose salaries could be higher. For example, an individual earning $50,000 per year would see his or her taxes cut by approximately $1,100.
Senator Richard Browning (D-9th), chair of the Senate’s Economic Development Committee, and Senator Brooks McCabe (D-17th) have requested that the proposal to be drafted into legislation and assigned a bill number to be reviewed and considered in this legislative session.
“I cannot think of anything that would have a bigger impact on the future of West Virginia than expanding our intellectual capital and capacity for innovation,” said Basile. “We will not be able to tackle the challenges and seize the opportunities facing the Mountain State if we don’t attract and retain the best and the brightest young minds.
“The continuing exodus of young, educated professionals from West Virginia requires decisive action,” he explained. “We are excited to propose this bold step to reverse this troubling trend.”
“Growing the next generation of leaders has long been a priority of the Charleston Chamber and our sister organization, the Charleston Area Alliance,” added President/CEO Matt Ballard.
“In 2006, the Charleston Area Alliance created Generation Charleston, which is now one the state’s most dynamic programs for engaging and empowering emerging leaders to shape the future of our region,” said Ballard. The program has more than 900 members and provides professional development, community service policy leadership and social networking opportunities to young professionals and others interested in creating a better West Virginia.
“Tax cuts and credits for student loans will be a powerful lure to come to West Virginia to live and work,” said Generation Charleston Co-Chair Rob Rosano. “I moved here from Massachusetts in 2005 for a position at the Clay Center. I know first-hand the many factors that young professionals consider when deciding to relocate to West Virginia. This incentive will make the state much more attractive to this demographic.”
“Giving new graduates a ‘pay increase’ for two years will help them get established in their careers and rooted in their communities,” added Co-Chair Brooke Pauley, Maple Creative. “After two years of living and working in West Virginia, they may be less likely to seek opportunities elsewhere.”
The “Intellectual Capital” proposal also calls for a $500 annual tax credit for interest paid on student loans for West Virginians under the age of 40.
“The burden of student loan debt on young people entering the workforce cannot be underestimated,” said Ballard. “Higher education costs have outpaced inflation, and students are leaving college with student loan debt that is equal to the mortgage on a first home.”
The Charleston Chamber is also calling for passage of the West Virginia Economic Development Act of 2010. The proposed legislation would create a new tax credit to encourage capital investment through the use of twenty-first century business technologies, including green computing and emerging technologies in manufacturing and other commercial businesses with a low carbon footprint; energy conservation in residential, commercial, industrial and government buildings; alternative fuels and technologies; renewable energy sources; and clean coal technology.
“Taken together, the ‘West Virginia Economic Development Act of 2010’ and the ‘Intellectual Capital Legislation,’ will help to create an environment in which the people of West Virginia are poised to successfully compete on the global stage,” said Basile.
In other action, the Charleston Chamber called for:
- Allowing counties and municipalities to use lottery and gaming revenues for the issuance of bonds for infrastructure and other public projects.
- Increasing the tobacco tax to $1 per pack to fund Medicaid match programs and reduce tobacco use.
- A study to assess the feasibility of implementing a business court system in West Virginia.
- Establishing medical criteria for asbestos claims.
- Increased funding for research in science, technology, engineering and math-related fields through WVEPSCoR.
“As we enter another legislative session, the Charleston Chamber will be proactive, introducing innovative ideas to retain young citizens and attract jobs and investments to West Virginia,” Ballard said. “At the same time, we will be monitoring policies and bills that could hurt the region and state, and are prepared to act on legislation that could impact jobs, growth and a brighter future for West Virginia.”