CHARLESTON, W.Va. -- To guarantee a better future, West Virginia should place more emphasis on educating its people and keeping them healthy, rather than creating major tax cuts for businesses.
That was a major theme during the annual meeting the West Virginia Center on Budget and Policy, held Tuesday at the Marriott in downtown Charleston.
Robert Tannenwald, who became a senior fellow at the Center on Budget Policy and Priorities in Washington, D.C., earlier this year, was the featured speaker.
"The most important way to attract business investment is a well-trained work force," said Tannenwald, who previously served as a vice president at the Federal Reserve Bank of Boston, where he worked for 28 years.
Tannenwald believes business tax incentives are not the "golden goose" for West Virginia.
"There is no empirical evidence that tax cuts pay for themselves," Tannenwald said.
"It is important to remember that states must balance their budgets. And you can't cut some taxes without raising other taxes or cutting spending."
Ted Boettner, director of the West Virginia Center on Budget and Policy, said, "Good analysis makes good public policy. We should pay attention to facts and not cut taxes that produce inefficient results. Our best investment is in our people."
Cutting taxes can also cut public services.
Tannenwald said, "We must weigh the benefits of cutting taxes against public investment. That investment not only lowers business costs but it helps workers as well."
Public investments can improve infrastructure, help education institutions and increase work-force training.
Tannewald's research argues that most benefits from tax breaks are "psychological" and do not help long-term economic development that creates permanent jobs.
Sen. Brooks McCabe, D-Kanawha, said recent statistics place West Virginia near the bottom of all states when it comes to education, especially college education.
"We are not doing enough to turn the state around," McCabe said during a morning panel at the conference.
McCabe said West Virginia must also focus on reversing "a litany of health problems, including obesity, smoking, heart diseases and drug use. So many of our health problems are part of our lifestyle."
Joe Brouse, who helps run the nonprofit National Capital Investment Fund, spoke about his group's efforts to help finance new projects in areas like ecotourism and the wood products industry.
Brouse's group has helped some whitewater rafting groups in Southern West Virginia expand their business.
McCabe predicted the Legislature will increase the tobacco tax.
"I don't know that it will happen this year," he said. "West Virginia has one of the lowest tobacco taxes today. But the question is when we will increase tobacco taxes, not if we will increase them."
The West Virginia Center on Budget and policy has several economic studies available on its website (www.wvpolicy.org), including documents on the impact the current recession has on West Virginia families, the impact of coal on the state budget and the role played by business property taxes in funding public education.