Gov. Jim Justice’s vision for West Virginia is to clear the pandemic and eventually eliminate the state’s income tax, paving the way for a future in which workers pour into the state, work remotely via high-speed internet and build a stronger economy.
But his budget plan would provide no new money for government services both new and current residents would need and would raise the sales tax on goods they’ll buy — and West Virginia leaders in both parties have been promising West Virginians access to high-speed internet for years.
“Think of the story. Think of the story one more time,” Justice said Wednesday night during his fifth State of the State address. “The best in the nation with COVID. The best in the nation … Four of the most beautiful seasons on the planet, the greatest people. It’s our chance.”
Republican leaders in the Legislature have also said an elimination of the personal income tax is a priority. The tax contributed $2.1 billion to the state budget in fiscal year 2019, more than 40% of state revenue. They say that repealing the tax will bring people here, although they haven’t addressed how the plan to repeal it would affect those who already live here.
One of the ways Justice proposes making up the gap caused by the tax elimination is by raising the sales tax 1.5%, which would bring it to 7.5%: the highest sales tax in the country. He assured retailers in border counties the tax wouldn’t result in lost business as people shopped in border states, because they’d be choosing to live in West Virginia.
But the sales tax hike, coupled with Republican proposals to put more public money toward private schools and charter schools, concerns Jessica Salfia, a teacher at Spring Mills High School in Berkeley County, and a member of the American Federation of Teachers-West Virginia.
She said these factors together could result in more teachers leaving West Virginia.
According to the West Virginia Department of Education, the average contracted state salary for teachers is about $50,000, while a new teacher may make just $37,000.
“Almost all teachers in West Virginia are hovering right around middle-class, the bottom-end of middle class. Some teachers are hovering around the poverty level in certain parts of the state,” Salfia said. “Those are people who, if a gallon of milk goes from $3.50 to $5, are going to be widely affected if the price of cereal, formula and basic groceries goes up.”
Economists say one way to promote economic growth in an area is to ensure an educated workforce lives there, and Salfia said many current West Virginia teachers could easily choose to live and work elsewhere.
She works in the Eastern Panhandle, where she said teachers, particularly math teachers, often stay a year or two before leaving for higher-paying jobs in neighboring states.
“So why would any teacher that has those opportunities so close them stay teaching in the state?” she said.
Salfia co-edited “55 Strong: Inside the West Virginia Teachers Strike,” with historian Elizabeth Catte. The book chronicles the nine days in 2018 when West Virginia teachers, among the lowest paid in the country, went on strike statewide over the rising costs of their health coverage and for better wages. They ended up with 5% raises, and the governor convened a health care task force.
In 2019, they went on strike again, over legislation that would have put public money toward private schools and charter schools. Similar legislation is under consideration this legislative session, which began Wednesday.
And on the first day of the session Wednesday, Sen. Patricia Rucker, R-Jefferson and a leading proponent of school choice measures, introduced a bill to make work stoppages illegal. She has also said she wants to focus on the teacher shortage this year.
West Virginia lawmakers have said school choice legislation will be a priority this year, meaning they want to encourage parents to send their kids to private and charter schools.
They also want to make way for education savings accounts in West Virginia, which would allow parents to use public money for expenses like private school tuition, charter school tuition, and home-schooling.
Teachers unions have argued that this legislation, by taking money from public schools, would hurt schools already struggling to meet the needs of students from lower-income families. National data suggests school choice measures in other states leave children from low-income families in the least-funded schools.
Growing the tax base with broadband
Besides raising the sales tax, Justice also proposed raising severance taxes on coal, natural gas and oil; increasing the tax on cigarettes and soda; taxing professional services; taxing the wealthy and cutting state spending. Combined, he said these changes could make up the first billion dollars in lost income tax revenue.
But he predicted West Virginia’s tax base will grow as remote workers come to West Virginia through the expansion of broadband Internet, which both Democrat and Republican lawmakers have said is a priority this legislative session.
Delegate Daniel Linville, R-Cabell, is the chairman of the House Technology and Infrastructure committee. He said that after years of state leaders promising high-speed Internet access to West Virginians, he understands skepticism. He said there’s reason to believe, however, that his and others’ more recent work on the problem should give state residents reason for hope.
He noted that the West Virginia Broadband Enhancement Council released a statewide broadband availability map, which is based on speed tests taken by West Virginia residents, instead of provided by companies. He’s proposing they make law that the speeds be reported by consumers instead of companies as part of House Bill 2002, which passed the House Judiciary Committee on Thursday.
The map would be updated every year, Linville said. And it will give lawmakers the information they need to tailor funding and policy-making toward areas of need, he said. The new Office of Broadband will be able to tailor its efforts as well, he said. He also said that in budget shortfall years, there was no money to put toward broadband.
“We’ve actually got got the means to measure success or failure,” he said.
Linville said he plans additional broadband legislation and agreed with Justice that remote workers may move to the state.
“We’ve got a low cost of living,” he said. “We’ve got incredible people.”
“West Virginia was the butt of a lot of bad jokes, right? Look, name your state. You’re gonna have some missteps, right?
“But you have to admit that we have definitely changed that narrative around the state of West Virginia in a positive direction overall.”
West Virginia’s image
West Virginia’s successes — including those related to COVID — were also a common theme during Justice’s address. The state has a high vaccination rate, and has received national praise for that and early efforts to vaccinate all nursing home residents.
“They thought we were backward or we were poor. I don’t subscribe to that, and I know you don’t either,” Justice said.
But the state is not out of the woods. The pandemic has killed more than 2,180 people in West Virginia. According to a survey from the U.S. Census Bureau conducted from Jan. 6 to Jan. 18, 35.7% of surveyed adults in West Virginia found it somewhat or very difficult to pay for usual household expenses during the pandemic.
Justice didn’t outline any plans to put additional money toward public health emergency response infrastructure or assist the West Virginians still struggling to put food on the table and pay for their homes and utilities due to COVID-related financial loss. The state still has more than $600 million in unspent federal CARES Act money; Justice has said that money will go toward the unemployment trust fund.
Democrats have noted that West Virginians are struggling with poverty due to COVID-19, but their plans are unclear. They have said, in events preceding the session, that they support help for small businesses and summer learning and feeding programs.