Op-Ed: Stephen G. Roberts

Job Growth Is Real Solution To State's Deficit

Martinsburg Journal, April 26, 2004

Was it a death knell for West Virginia or a clarion call to action? I am speaking of the disturbing news that the state's financial situation is going to worsen dramatically in the coming years. A report from the Legislative Auditor's Office reveals that over the rest of this decade, there will be a sizable -- and ballooning -- imbalance between state tax revenues and expenditures. By 2010, the Auditor's Office projects West Virginia 's state government budget will need $370 million annually in added revenues. And that assumes the state will experience a modest 1.5 percent growth in tax revenues during this period.

Large tax increases will only erode our business base and cost even more jobs. Jobs are the foundation of our state, and, unfortunately, that foundation is weak and not conducive, currently, for growth. The state has lost 50,000 jobs over the past few years. Putting that in perspective, the loss of these jobs means West Virginia has lost more than $1.5 billion in income -- wages. This is money that would be used to pay taxes, purchase goods and services, buy cars and homes, and support education. That is a huge hit to this state's fragile economy and a blow to people who rely on these local jobs and income.

Employers in West Virginia already bear one of the highest tax burdens in the nation, and additional tax increases will only cost more jobs and worsen the fiscal imbalance. That is a recipe for disaster.

Can West Virginia cut its way out of this situation?

The magnitude of cuts needed to close this gap would devastate vital programs in West Virginia -- roads, health care, education, public safety, infrastructure and social services. These cuts also would ravage important social programs needed for thousands of disadvantaged individuals, families and seniors. I am sure that some degree of spending cuts and operational enhancements could help to a degree, particularly through greater use of technology, but this path won't solve the problem.

The real solution to this problem is creating an atmosphere here in West Virginia where our state's employers can conduct business, generate reasonable profits, employ more people and pay fair taxes. Growing our business and employment base is how we will bring this equation into balance.

The West Virginia Chamber of Commerce, as the voice of business, has been highlighting the problem with the state's employment and business climate -- high taxes, more stringent environmental regulations, an anti-business judicial system, an anti-growth sentiment by policy-makers, and an obvious animosity toward the needs of employers.

So which direction is West Virginia going to take? Will state leaders muster the courage to turn West Virginia around and go down a path of growth and expansion? Or will they continue to follow the disastrous path we have been on and watch as our state collapses into fiscal chaos and turmoil? One only has to look to California as an example to see where we don't want to go.

Time is up, and tough decisions must be made now. Avoidance is no longer an option.

The West Virginia Chamber of Commerce urges lawmakers to enact our pro-growth issues this session. We must act now to change these out-of-step laws and policies if we are going to have a chance to start growing local jobs and to entice new investments and expansions. Every month our leaders delay in doing this just puts the state further and further into jeopardy.

As always, the West Virginia Chamber of Commerce offers the talents and resources of the state's business community to work with state leaders to chart a new direction. We offer to be a partner with the state in developing a pro-growth plan of action to help get West Virginia out of its predicament.

Stephen G. Roberts is president of the West Virginia Chamber of Commerce.