He Sold the Schools to Pay for the Tax Cut

What he announced

On October 23, the governor's office put out a press release. It said West Virginia got more than $6.4 million from the Appalachian Regional Commission. People call it ARC. It is a federal agency that sends money to poor counties in Appalachia.

Here is where the money went.

Eighty-three jobs. That is the whole number. The press release does not hide it. It just puts a lot of words around it.

Do the math

Take the $6.4 million. Divide it by 83 jobs. You get $77,430 in federal money for each job.

Now take the bigger number in the release. It says the projects add up to "nearly $14.6 million." That includes money from counties and other grants. Divide that by the same 83 jobs and you get $176,000 a job.

Now divide the $6.4 million by the 1.77 million people who live in West Virginia. You get $3.63 a person.

West Virginia has about 780,000 workers. Eighty-three jobs is one job for every 9,400 workers.

Some of these projects are worth doing. A trail is a real thing. A clinic that buys radiology equipment serves real patients. But look at what each job costs.

The trail is $2 million for nine jobs. That is $222,222 a job. Marshall's housing project creates no jobs at all. It says it "supports 100 workers." That phrase is there so nobody has to put a zero in the jobs column.

Where the other half of the money comes from

The release says the projects are worth nearly $14.6 million. Six point four million is federal. The rest, about $8.2 million, comes from somewhere else. That is 56 cents of every dollar in the headline.

Where does it come from? County commissions. Other federal grants. The groups that got the money. Raleigh County's trail, for example, is being finished with an environmental grant, a transportation grant, county money, and the ARC award. All of that got stacked into one paragraph and announced as one number.

ARC has a rule for this. It calls the local share the "match." Poor counties pay less. Rich counties pay more. ARC puts every county in one of four groups, from poorest to best off.

That rule exists for a good reason. A poor county cannot co-sign its own rescue. But the rule has a side effect. A county with money and a grant writer gets in line first. A county with neither gets a press release about a program it did not win.

Where the money landed

ARC ranks every county in Appalachia each year. West Virginia has 55 counties. For next year, ARC calls 13 of them distressed. That is ARC's word for the poorest counties, the ones with high unemployment, low income and high poverty.

Sixteen more are "at-risk." Twenty-five are "transitional." One is "competitive."

Across the whole state, the average income earned per person is $39,030. The national average is $59,811. So West Virginia earns about 65 cents for every dollar the country earns. The state's poverty rate is 16.7 percent. The country's is 12.5 percent.

Now look at the four projects. One of them sits in a distressed county. That is the $1.25 million for the Williamson clinic, in Mingo County. Raleigh County is at-risk. The technology group is based in Mercer County, which is at-risk. The Marshall housing work covers Cabell and Wayne, which are transitional.

So $1.25 million of the $6.4 million goes to the counties ARC calls the poorest. The biggest single award goes to a county that has a parks department with the staff to fill out the application.

That is how grants work. It is also why a grant round is a bad thing to call a plan.

The part that is not in the press release

In 2025, the Legislature passed a law about data centers. It is called HB 2014. The governor pushed for it. It does two things.

First, it takes away county and city control over big data centers. Counties cannot zone them. They cannot write their own rules for them.

Second, it changes where the property tax goes. Normally almost all property tax stays home. It pays for your schools, your roads, your county offices. Under this law, a big data center's property tax is split 70 cents to the state and 30 cents to the county.

Berkeley County is the first place this happened. A company called Penzance is building a $4 billion data center there. The company printed a flyer that cites the state tax office. Here is what that flyer says about one year of property tax.

Berkeley County has about 130,000 people. Thirty million dollars is about $230 for every person in the county, every year. That is money that used to pay teachers, bus drivers and building costs.

Where did it go? The state got it. And the state split it up.

$25.5 million went to the Income Tax Reduction Fund. That fund pays for the income tax cut the governor signed in March. Five million went to all 55 counties, split by population. Two and a half million went to the state's savings account. Two and a half million went to a fund for the electric grid.

Read that first number again. The school money is paying for the tax cut.

The property tax is only part of it. The same law lets data centers skip the sales tax on the servers and computers they buy. It gives them a big discount on the property tax for that equipment. It cuts their income tax if they hire as few as ten people. One of those breaks alone, the discount on used equipment, saves a data center with $2 billion of servers $24.1 million a year. That is one building's worth of computers, and it is 3.7 times the grant the governor announced for the whole state.

What this means for your family

Your school. About 80 cents of every school dollar in West Virginia comes from the state and the county. The county part is property tax. If a certified data center comes to your county, most of its property tax goes to the state instead. Under the law as written, the school board likely gets none of the county's 30 percent. That is the finding in the Center on Budget and Policy's analysis, and the counties have been asking the state to clarify it since April.

Your tax cut. The governor asked for 10 percent and signed 5. A 10 percent cut would have cost the state about $250 million a year. MetroNews reported that. So the 5 percent cut costs about $125 million a year. That is 19.5 times the grant he announced.

Who gets that money? A 5 percent cut gives you back 5 percent of what you already pay. If your household pays $2,000 in state income tax, you get $100. If it pays $20,000, you get $1,000. In McDowell County, where the average income is $18,441 and 34.2 percent of people live in poverty, the check is close to nothing.

Your power bill. Two and a half million dollars a year of Berkeley County's school money now goes to a grid fund. The governor says the data centers pay for their own power hookups. The county schools did not get a vote on either one.

Why he did it this way

This part is about character, so be careful with it.

The governor was the state's attorney general for twelve years. He has read more law than most lawyers in West Virginia. His allies wrote the 70/30 rule. The counties have complained about it in public since April. He signed the bill. He knew what was in it.

So look at what he chose to announce. Not the $30 million a year leaving a school system. Not the $24.1 million a year in equipment discounts. Not the $12 billion data center he celebrated at the Greenbrier in September, where the news report had no jobs number at all.

He announced $6.4 million of federal money that was already coming. The release ends by listing three more grant deadlines: October 30, November 6, and January 15. That is a calendar, not a plan.

Here is the honest word for it. He is not confused. He is counting on you being confused. A man who can read a tax table knows exactly what the tax table does. He is betting that you will look at the ribbon and skip the ledger.

That is the same bet he made in September, when his office said West Virginia would not take nuclear waste and his own signature said it would. Same method. Different paper.

Where the other side has a point

Give the governor the best version of his argument. It is better than the one he made.

The trail is real. The Williamson clinic will serve more than 14,400 patients in a county where 32.4 percent of people live in poverty. ARC is a decent program that has been helping poor counties for fifty years. And the data center people say the choice was simple: change the tax rule or lose the project.

Test that last one. Under normal rules, Berkeley County would have collected $94 million a year. Under this law it collects $58.5 million. The state takes the other $35.5 million. So the county did not trade nothing for something. It traded $35.5 million a year for a building. And the state used a quarter of the difference to pay for a tax cut.

A company that might not come is a guess. A school district's $30 million is a line in a flyer.

Words in this story

ARC

The Appalachian Regional Commission. A federal agency that sends money to counties in Appalachia for roads, clinics, job training and trails.

POWER

One ARC program. It is meant for communities hurt by the decline of coal.

Match

The local share. ARC pays part of a project and the county or the group pays the rest. Poor counties pay less.

Levy

A property tax rate that voters or a school board set. The "regular levy" is the everyday money that pays staff and bills.

Distressed county

ARC's label for the poorest counties. It means high unemployment, low income and high poverty, measured over three years.

High impact data center

The state's label for a very large data center. It gets special tax treatment under HB 2014.

Property tax

The tax you pay on land, buildings and equipment. In West Virginia it is almost all local money, and it is the main local source for schools.

What you can do

1. Call your county commission. Ask for the tax worksheet for any certified data center in your county. It is a public record. Berkeley County's exists because the developer printed it. If your county does not have one, that is a story.
2. Ask one question at every forum. Would you vote to repeal the 70/30 rule and send that school money back to the county that collected it? Yes or no. Anyone who says "we need to study it" has answered.
3. Divide the next announcement yourself. Take the dollar figure. Divide by the jobs. Divide by the population. It takes twenty seconds, and it is the only thing that has ever worked against a man with a microphone.

Sources and method

Every number here comes from a public document. The grant figures are from the governor's October 23 release, and the divisions are mine. The county rankings and the income and poverty figures are ARC's own tables for next year, downloaded from arc.gov and read directly. The tax split comes from HB 2014 and from the West Virginia Center on Budget and Policy's analysis of the Penzance flyer, which cites the state tax office. The income tax cut's size comes from MetroNews's report that a 10 percent cut equals about $250 million.

1. Office of the Governor. "Governor Morrisey Announces More Than $6.4 Million in ARC Investments to Create Jobs, Strengthen Communities." October 23, 2026. Four projects, 83 jobs, "nearly $14.6 million in total investment," 11 West Virginia projects in FY2025 POWER totaling more than $12.5 million.
2. Appalachian Regional Commission. "Match Requirements for ARC Grants" and "How Match Rates Work." The 80/70/50/30 split and the multi-county rules.
3. Appalachian Regional Commission. "County Economic Status and Distressed Areas FY 2027 Data Tables." West Virginia: 13 distressed, 16 at-risk, 25 transitional, 1 competitive; income per person $39,030, 65.3 percent of the national average; poverty 16.7 percent.
4. West Virginia Center on Budget and Policy. "Berkeley County Loses Out on Tens of Millions in Property Tax Revenue With Data Center Tax Scheme." June 10, 2026. The $94 million total, schools from $73M to $43M, commission from $21M to $15.5M, $25.5M to the Income Tax Reduction Fund, $5M by population, $2.5M to savings, $2.5M to the grid fund.
5. West Virginia Center on Budget and Policy. "Data Center Tax Breaks Come at the Cost of Our Public Schools." May 12, 2026. Sales tax exemption, the $24.1 million salvage discount on $2 billion of equipment, income tax relief for ten jobs, and the fact that more than 99 percent of property tax normally stays local.
6. West Virginia Legislature. HB 2014 (2025) and W. Va. Code §11-6N-4, the special rules for splitting a high impact data center's property tax.
7. West Virginia MetroNews, Jeff Jenkins. "Morrisey signs bill into law that cuts personal income tax by 5 percent." March 31, 2026. SB 392; a 10 percent cut equals roughly $250 million.
8. West Virginia MetroNews, Jack Carlson. "Morrisey announces $12 billion data center project in Mason County." September 3, 2026. No jobs figure in the report.
9. Ohio Capital Journal. "Trump requests 93% cut to Appalachian Regional Commission." July 15, 2025. The request would have cut ARC from $200 million to $14 million; a congressional committee restored the money that month.
10. West Virginia MetroNews. Coverage of the nuclear campus withdrawal, September 28 to October 1, 2026, including the governor's office refusing to release the memorandum until records requests were filed.