Listen to “Local Control. Local Burden. Local Benefit” on Spreaker.
A simple principle increasingly shapes my thinking on data centers: local control, local burden, local benefit.
As the prospect of a data economy becomes more concrete in the Mountain State, communities are making their preferences clearer. Some see opportunity. Others see reasons for caution.
That is a useful distinction. State policy should recognize it.
Take Putnam County. Some residents oppose Google’s proposed data center near Buffalo. But I also hear considerable enthusiasm from people who see an opportunity for their community.
Why might the reception differ elsewhere? Here is my hypothesis: Putnam County has lived for decades with the benefits of Toyota’s investment in Buffalo. Having seen that, the county is eager for more.
The investment has grown. Good-paying jobs followed, along with opportunities for other businesses. Toyota helped strengthen the county’s economy and demonstrated what a major employer can mean to a community.
It also established an expectation: be a good corporate citizen. Companies that follow, Google included, have a high standard to follow and the county’s leadership has Toyota as a basis for certain expectations.
That understanding – that way of doing business – matters when the next opportunity arrives.
Elsewhere in West Virginia, distrust of big business remains. Our history offers reasons for it. Some coal operators and land companies extracted wealth while leaving communities to carry the consequences.
That history should inform the safeguards we demand. It should not foreclose every opportunity before us as it too often does.
Local control offers a way forward from that conundrum. Communities willing to welcome data centers should have a meaningful path to approval. Communities unwilling to accept them should have a meaningful say, too.
Would that discourage developers? It could rule out some locations. But it would also clarify where investment is welcome and give companies a clearer path to building community support.
The other half of that bargain is financial.
A county that accepts a project’s burdens deserves a substantial share of its benefits, maybe all of the benefits. A county that declines development should not expect the same financial reward as one willing to host it. More plainly, why should a county that doesn’t host a data center expect anything at all?
That warrants another look at HB 2014 and its tax allocation formula.
Under the law, the host county receives 30 percent of the regular-levy property tax increment covered by the formula. Half goes to the Personal Income Tax Reduction Fund, with the remainder divided among other counties and infrastructure funds. Excess levies are left unaffected.
Thirty percent of that increment is not enough – that much seems clear now.
More of the money should remain where the development occurs, supporting the schools, services and infrastructure of the community accepting it.
Supporters argue that the statewide allocation will help reduce personal income taxes. Maybe: the money will feed into a fund, but only additional action of the legislature will escalate income tax reductions beyond the established trigger mechanism. That is not guaranteed.
Income tax reduction is a policy good. Taxing work takes a share of the reward for working and disincentivizes production; a greater reliance on consumption taxes is preferable. But the case for income tax relief should stand on its own. It should not depend so heavily on redirecting property tax growth from communities hosting major development. That is fundamentally erred.
Counties like Putnam, Mason and Berkeley deserve to retain more of the revenue generated within their borders. If we want counties to build stronger, more sustainable economies, we should let them keep more of the proceeds when they succeed.
Local control must come with responsibility. Local burdens must come with meaningful local benefits.
The Legislature should revisit HB 2014 in the upcoming session with that principle in mind.
Let communities help decide their future — and let those willing to embrace development keep more of the value they help create.