Editorial: It’s A Decisive Moment For W.Va.

Charleston Daily Mail, July 16, 2005

West Virginia , like most other states, is rolling in cash. Individuals, corporations and gamblers each gave the state at least $100 million more than expected. Those are staggering numbers. Rising energy prices helped. President Bush helped, too. His tax cuts handed West Virginia ’s Democratic administration a breather.

But only that. It will take more than a little windfall to put this state on the right track, as John E. Petersen of the School of Public Policy at George Mason University noted in a recent column for Governing.com. Petersen sees West Virginia as the harbinger of the nation’s future ills, and he lays out some dreadful truths about the current condition of the state:

“This bucolic home of rugged mountains and great sports teams is also where the nation’s demographic future is on view: There are only two workers for every retiree, and health care and retirement costs are the biggest items in the state budget.”

Ouch. And it gets worse: “A dissection of the state’s budget shows what the problem is: 31 percent of total spending is on health care and human services: You can add to this the substantial chunk of employee compensation devoted to health insurance.

“So, even with buoyant revenues, nothing matches the relentless double-digit march of health care costs, be they vendor payments under Medicaid or health insurance premiums for teachers and state workers.”

Petersen notes that the state must spend 11 percent of its revenues just to keep its unfunded pension liability from getting worse.

But the killer truth is this: “Balancing the state budget is all about paying for the past rather than investing in the future,” Petersen wrote. That’s the legacy of 73 years of Democratic control of the Legislature — tax and tax, spend and spend, elect and elect. It’s not a fault entirely peculiar to West Virginia , of course.

Stephen Slivinski, director of budget studies at the Cato Institute, noted in a recent column that politicians committed their states to more spending even as they complained about looming deficits. “According to the Congressional Budget Office,” he wrote, “nonelderly Medicaid enrollment stayed relatively constant throughout the 1980s. But from 1990 to 2002, it more than doubled. State policymakers were practically guaranteeing their states would crash into a sea of red once the U.S. economy stalled.”

This is just dumb, but West Virginia ’s leadership did it. Now what will the state’s political class do?

“How governors handle the new surpluses will show their true colors,” Slivinski wrote. “It will show whether they are committed to richer government or richer taxpayers. Some governors will find ways of cutting waste in government and returning surplus money to taxpayers. Others will surf the tide of taxpayer money rushing into state coffers.

“Often, the mark of good leadership is saying no at a time when it’s much easier to say yes.”

Gov. Joe Manchin will decide what direction the state takes. Will he cut state government, giving West Virginia’s private sector a chance to catch up with it debts and solve its long-term problems? Or will he follow the pattern that brought the state to the brink of bankruptcy and just keep right on spending? Teachers and other public employee groups want the kind of raises judges got. Powerful interests oppose Medicaid cuts. State employees want great insurance — and lower bills.

Popularity lies in accommodating everybody, but economic success does not. I’ll believe West Virginia has turned the corner when I see state leaders commit to economic success.