The West Virginia Economic Development Authority has approved another $75 million for Nucor Steel. The allocation is on top of the initial $315 million promised by the state in 2022 when the company announced plans to build a state-of-the-art sheet steel mill in Mason County.
The WVEDA approval came rapidly yesterday after a brief closed-door session. Governor Jim Justice is chairman of the EDA and he praised the decision. ‘I’m proud to continue building on our record-breaking investment with Nucor, because they’ve been rock stars in my book,” Justice said.
The additional $75 million from the state will bring Nucor’s total commitment to $3.5 billion, making it the largest economic development in both the state and the company’s history. The steel mill is well under construction with hundreds of workers on the job. When completed sometime in 2027, it will employ up to 1,000 workers.
The agreements with Nucor require that the company meet certain benchmarks on investments and employment in the coming years or the company will have to pay back the money.
Nucor has been in business since 1905. The Charlotte, North Carolina company is the largest steel maker in North America. It is a Fortune 150 company that has a current market capitalization of over $27 billion.
Nucor’s third quarter financial report said the company had “$4.86 billion in cash and cash equivalents and short-term investments on hand,” as well as $1.75 billion available in revolving credit and “the strongest credit ratings in the North American steel sector.”
That is positive news for one of West Virginia’s newest and largest economic projects. However, it does raise this question: Why does a global company with a market cap more than five times greater than West Virginia’s General Revenue budget and cash on hand nearly equal to an entire year’s spending of West Virginia tax dollars need more money from the state?
$390 million in taxpayer dollars is a lot of money for a small state to give to one company. It represents eight percent of the entire General Revenue Budget for one year! And it comes at a time when the budget is tightening, public employee insurance costs are rising, and schoolteachers need a pay raise.
The argument from Justice and others is that the Nucor site will attract related industries creating a multiplier effect for the economy. We hope so. West Virginia needs economic growth, and Nucor is expected to be a great partner with the state.
However, it is incumbent upon the Justice administration and the EDA to do a better job explaining why West Virginia’s taxpayers are rolling out that much money to a company that does quite well on its own.