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George Hohmann: Wanting a better business climate

WHITE SULPHUR SPRINGS, W.Va. -- Timothy Duke, Steel of West Virginia Inc.'s president and chief executive officer, made it clear to Business Summit attendees that the state needs to do more to be competitive.Duke was one of several manufacturing executives who spoke at the West Virginia Chamber of Commerce's annual gathering of business leaders at The Greenbrier Resort.Steel Dynamics Inc., the corporate parent of Duke's company, has three plants in Indiana, one in Virginia and one in West Virginia, at Huntington.He rated West Virginia versus the others.He was complimentary of state government's economic development team. Not so much its legal environment. "It's not good compared to the other states. There are too many lawsuits and there is no intermediate appellate court."Duke said West Virginia regulators are reasonable to work with.As for electricity, "We have a very good supplier," he said of Appalachian Power. "When we have a problem, they run. They get it."However, due to rate increases, Steel of West Virginia's electricity bill has increased from $568,000 a month in 2006 to $1.1 million a month. "We have the highest rate of our sister plants," he said.Alluding to Century Aluminum's request for a special electricity rate, Duke said, "It would be great if that plant reopened, but Steel of West Virginia is not a bank or an insurance company and we strongly object to their proposal."
Although West Virginia's corporate income tax has been falling, "Virginia's tax rate is still 29.2 percent lower. Comparing personal income taxes, "West Virginia loses to Indiana," he said.The progress West Virginia has made in reducing workers' compensation insurance costs "is unbelievable," Duke said, noting that premium rates have declined more than 50 percent since West Virginia privatized its system in 2006.As for unemployment taxes: "If you hire 380 workers in Indiana and 380 in West Virginia and pay them the same and never lay anyone off, over a 10-year period you will pay $469,000 in Indiana versus $1,231,000 in West Virginia," he said."West Virginia personal property taxes are higher than our sister plants because those states exempt more inventory items from the tax base," he said.He also noted that Indiana and Virginia are right-to-work states and West Virginia is not.
West Virginia is special because of "its fantastic pool of production workers, managers and administrative professionals," he said. "Our workers have grit ... I'd put ours up against the best of the rest."Duke has three messages for state legislators: "Lower our taxes; break down some of the barriers, such as a fairer legal environment and becoming a right-to-work state; and establish better skilled training programs."Reach George Hohmann at or 304-348-4836.  
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