Gov. Jim Justice on Wednesday evening touted West Virginia’s progress — announcements of thousands of new jobs, budget surpluses and a booming tourism industry — while proposing major tax cuts and listing a host of other policy challenges he hopes lawmakers will sort out.
“These are just isolated things,” Justice said near the end of his hour and twenty minute State of the State address. “There’s so much to do.”
While Justice touched on a broad range of issues he wants state lawmakers to address this year, many of the state’s biggest and most chronic issues went unmentioned, and few fully-fleshed out solutions were offered.
Many of the biggest proposals he did offer were not new ideas. Instead they were recycled policies that last year’s Republican-majority Legislature was unable to accomplish in the 60-day 2022 session, or funding increases for existing Justice-backed programs.
These include reorganizing the West Virginia Department of Health and Human Resources, putting more money into tourism and economic development, and Justice’s marquee proposal: a 50% income tax cut. For years, Justice has chased a substantial income tax cut, in spite of warnings that West Virginia’s record-breaking revenue surpluses that he uses to justify the proposal may not be all they appear.
Here are some issues that weren’t brought up in Justice’s 7th State of the State address, and some of the most important issues that were.
The pitfalls of tax cuts
In recent months, Governor Justice has made much of West Virginia’s budget surplus, which was $1.3 billion at the end of the 2022 fiscal year according to state figures. Tonight he laid out his plan to use that money to support a 50% cut in the personal income tax over the next three years.
The personal income tax has been on the governor’s mind for years. Justice has long argued — against the advice of many policy experts — that these taxes should be drastically reduced, and ultimately, eliminated. He also continued to promote his proposal to provide a vehicle tax rebate, a confusing and somewhat limited plan that first emerged during his effort to kill voter interest in Amendment 2 last fall.
For the governor (and to an extent many legislators), using the state’s current surplus to provide drastic tax cuts this session is a no brainer. But it isn’t clear exactly how much money these cuts will save in the long run or how sustainable they’ll be. The West Virginia Center on Budget and Policy has argued that the current surplus is a mirage, largely due to the fact that the state’s extra money is due to temporary increases in revenue streams like the severance tax, along with West Virginia maintaining a flat budget that does not account for inflation and also does not address the current financial needs of several state agencies.
Justice’s speech promised to put public school issues “front and center” in the upcoming legislative session, and the governor endorsed a plan to increase the number of teachers’ assistants in K-3 classrooms. But while he spent more time on education than many other subjects, many of the schools’ biggest educational deficiencies went unmentioned.
While grades were brought up multiple times, the grades Justice was talking about weren’t those of the schools’ students — which collectively trail much of the country — but those of the schools themselves, based on a defunct testing system.
“Everybody that wants to come to West Virginia says ‘how are your schools?’” Justice said, acknowledging that strong public schools lead to more investment in the state by businesses.
West Virginia may no longer grade its schools with letter grades, but many of the same issues that have West Virginia’s schools ranking among the lowest in the country still exist. And the state’s students’ test scores and college-going also pale in comparison to others around the U.S.
Leading up to a legislative session where Republican leaders have promised to help the state’s struggling public school system, the State School Board, teachers’ unions, and even teachers themselves have not been quiet about their biggest need: more funding.
Justice endorsed a policy proposed by House Speaker Roger Hanshaw, R-Clay, to increase state school funding by roughly $37 million to put more teachers’ assistants in K-3 classrooms.
Saying that public schools are controlled by “special interests,” Justice promised a bill to put all curriculum online “so we can see every single thing that’s being put into our little kids’ heads.” Similar policies have been popular in Republican legislatures across the country, including in West Virginia, where a similar bill was introduced last year. But the genesis of the “curriculum transparency” movement lies in the culture wars, and offers nothing to improve the performance of the state’s students.
While Justice, Hanshaw and Senate President Craig Blair, R-Berkeley, have promised that public schools will be adequately funded, Justice’s speech leaves many questions about where the money will come from. On top of endorsing Hanshaw’s multi-million dollar teachers’ assistant program, Justice also asked for another 5% pay raise for state employees, presumably including public school workers. But Justice’s marquee proposal, a 50% income tax cut, would wipe out roughly a quarter of the state’s revenue.
The rising cost of energy
West Virginians have seen energy rates rise faster over the past two decades than those in almost any other state in the country. Between 2005 and 2020, the cost of residential electricity in West Virginia nearly doubled: nationally, average prices increased by about 44%. And just in the past year, major utilities including Appalachian Power, Wheeling Power, Mountaineer Gas and Hope Gas have requested that the Public Service Commission let them raise their prices even more.
As far as electricity rates go, much of this is because the Public Service Commission has repeatedly made choices that bolster the coal industry even though it forces West Virginians to pay more for their energy. For instance, it issued a rule last September requiring utility companies to operate their coal-fired power plants at at least 69% capacity even though those companies told the PSC that it would be more expensive to do so.
Diversification of the state’s energy mix, including renewable energy, could help lower rates. But Wednesday night, Justice, a coal operator, touted several recent moves to diversifying the state’s energy mix, but returned to his standard refrain about how coal remains vital to the state economy. And measures to encourage renewables usually face stiff opposition from some vocal coal supporters in the Legislature.
On Monday, the Joint Standing Committee on Energy heard a presentation on community solar, in which the energy generated by a large, single solar project flows to a group of properties. West Virginia law currently prohibits this type of arrangement, and some committee members expressed skepticism that solar energy would be viable in the state.
Adam Edelen, CEO of Edelen Renewables, told the members of the committee it would be, if they act to change the law. “I’d like to spend as much of that money as I can right here in West Virginia but y’all have got to let me,” he said. “You don’t have the regulatory approach that permits this kind of capital investment.”
In recent days, no issue has dominated government conversations quite like the Public Employees Insurance Agency, or PEIA. The agency has struggled for years to provide quality health care with manageable premiums for the state’s public employees, and dissatisfaction with the insurance was the key driver of West Virginia’s nine day teachers’ strike in 2018.
Concerns over the fate of PEIA — which is currently in a deficit and will need hundreds of millions from the state by 2027 to stay afloat — grew last week when Wheeling Hospital announced that it was preparing to stop accepting PEIA insurance this summer because it does not reimburse hospitals enough for services.
But despite this, Justice dedicated surprisingly little time to discussing the issues facing the agency in his address. While he acknowledged the hospital reimbursement issue, announcing a $40 million allocation to address it, and pledged to add another $100 million in one-time funding to the state’s PEIA rainy day fund, he stopped short of offering a comprehensive list of proposals for what could be done to provide a permanent solution to the agency’s multifaceted crisis.
In his speech, Justice briefly mentioned the state’s corrections system, which is facing severe staff shortages and relying on National Guard members to fill the gaps. He urged lawmakers to address locality pay, meaning increasing salaries for correctional officers in counties that border on higher-paying states. In the Eastern Panhandle, some jails have vacancy rates for guards as high as 70%. Lawmakers are already considering a bill to bump pay for correctional officers with five years or more of experience by $600 a year.
But there was no mention of the real effect of those staff shortages: West Virginia’s overcrowded and dangerous jail system has one of the highest death rates in the country and is facing allegations of widespread violence, inhumane conditions and substandard medical care.
As of the end of October, 41 people had died in West Virginia jails and prisons in 2022. The state’s most unsafe jail, Southern Regional, had at least twelve deaths last year. The Department of Justice began investigating the facility in March and a class-action lawsuit was filed in September against the Division of Corrections and Rehabilitation.
Criminal justice advocates argue that the key to safer jails is developing more alternatives to incarceration. On Wednesday morning, a coalition of advocates for criminal justice reform gathered at a Charleston church and rallied for better alternatives to jail for those suffering from substance abuse.
“We are incarcerating people because of the disease of addiction,” said Delegate Danielle Walker, D-Monongalia.
Amid the staff shortages and increases in deaths, correctional officials successfully lobbied last year for a sweeping secrecy law prohibiting the disclosure of most jail records. The bill was passed unanimously, although a Mountain State Spotlight investigation revealed that some supporters now regret voting for the legislation.
In his speech, Justice praised the work of first responders and proposed adding $10 million to the EMS training and recruitment initiative he announced in June. But it’s unclear how far what he proposed will go to solve the problems facing EMS across West Virginia.
Between 2019 and 2021, the state lost more than 35% of its emergency medical technicians and 15% of its paramedics, according to a report from the WV EMS Coalition. Unlike Ohio, Pennsylvania, Virginia, Kentucky and Maryland, West Virginia provides no state-level funding for EMS, so the state’s cash-strapped counties struggle to fund their agencies. And as of 2020, the state also lagged behind all of its neighbors in pay.
Ultimately, industry representatives want a recurring line item for emergency services in the state budget, and the WV EMS Coalition has asked Justice for a one-time appropriation of $30 million to fund equipment and training.
If someone wanted to use only one basic statistic to try and estimate the overall health of a community, the infant mortality rate would be a good choice. A birth outcome is not only shaped by experiences during a parent’s pregnancy but also those throughout their entire life. It captures factors beyond the health care setting, from housing situations to experiences of different racial and ethnic groups. Additionally, because U.S. birth records are well-kept, infant mortality data is more accurate than some other health data.
Since 1960 and likely before then, the country’s infant mortality has decreased every year. Although West Virginia’s rate has been less straightforward, it decreased from 2016 to 2019. But from 2019 to 2020, while the U.S. numbers continued to fall, West Virginia’s rate rose by about 20%, the fourth highest in the country. Among the 10 states with the highest infant mortality rates, West Virginia had by far the greatest percentage change.
Lawmakers could take action to combat an alarming rise in infant deaths by expanding Medicaid to cover doulas, investing further in early childhood home visitation programs and supporting fellowships that train West Virginia doctors in maternity care to address the state’s shortage of women’s health physicians.