May 19, 2017

Groundhog Day, WV style

In Bill Murray’s classic movie, “Groundhog Day,” the main character winds up having to live through the same day over and over.

West Virginia’s ongoing budget crisis and standoff is starting to remind me of that ... minus the personal growth, romance and happy ending.

The twisted path to our current mess goes back several years, beginning with hundreds of millions of dollars in tax cuts first enacted around 10 years ago. We were told that the business tax cuts “would pay for themselves,” something which has never happened anywhere.

They didn’t.

We were also told the cuts would lead to the creation of many new jobs.

They didn’t.

We have several thousand fewer private sector jobs in the state now than 10 years ago.

Take those ingredients, shake, and throw in market-driven declines in the coal and gas industries, and that’s the recipe for how we got here.

Over the past several years, around $600 million has been cut from the state budget, including higher-education spending, which has declined in absolute and relative terms. There’s not a lot of fat left to trim. Further cuts would likely harm kids, college students of all ages, seniors, veterans and working people, not to mention everyone else.

Many of the current crop of legislators are opposed to tax increases to make up the difference. Last year, the budget controversy nearly led to a partial state shutdown. And things aren’t all that rosy this year.

One idea for a resolution to this problem is a “compromise” proposal supported by the Senate and Gov. Jim Justice, all for the best of reasons.

On the positive side, the compromise would avoid the possibility of a partial shutdown and would provide a temporary increase in revenue.

On the downside, proposed cuts to the state income tax would cost the state more over time than any increases in revenue from consumption taxes.

This would mean an ongoing budget crisis every year, with more and more painful cuts to things we need, like schools, higher and vocation education, public safety, health care, etc.

That would be the bad “Groundhog Day” part.

On top of that, the kinds of taxes that would increase are regressive, meaning they would hit people with low incomes hardest. Those with higher incomes would get a big break, since income taxes are progressive, in that they are the only state tax actually based on ability to pay: The rate goes up a bit as income grows.

It’s been argued that this shift from income to consumption taxes would be the biggest tax cut for the rich in West Virginia history, which is saying something.

Think Robin Hood in reverse.

There is a better way. A number of citizen groups, as well as political leaders, have proposed a simple solution to the mess that would avoid cuts to education, public broadcasting, higher ed, the Promise Scholarship, health and human services, etc. It would avert a shutdown. It would not blow a huge hole into future state budgets. It would also avoid the “Groundhog Day” effect of repeated annual crises.

The proposal:

1. A modest increase in the sales tax from 6 percent to 6.5 percent.

2. Expand sales taxes to cover services and industries that have so far avoided taxation.

3. Enact a fair-share tax of 1 percent on incomes over $200,000.

4. Offset the impact of higher sales taxes on low income families by enacting a 5 percent Earned Income Tax Credit.

Taken together, these measures would provide around $270 million in revenue.

It’s not a silver bullet, but it could point the way to a fair solution, or at least shift the conversation to a more productive direction.

If we don’t come up with a better solution, on the order of this one, West Virginia is likely to share the fate of Kansas, where ill-advised tax cuts once again failed to deliver and left things in shambles.

In baseball, that would be called an unforced error.

You could also call it a series of really bad Groundhog Days.

(Note: this appeared in today's Charleston Gazette-Mail.)

May 16, 2017

A better way to deal with WV's budget woes

There's a lot at stake in the current debate over the state budget. It could affect kids, seniors, students, veterans and working families for years to come. Below, by way of friends at the WV Center on Budget and Policy and other allies, are some simple suggestions for fixing the problem and easy action steps you can take:

The state budget fight is a complicated mess. It's time to simplify.

Right now, we have no actual bill, but the last version we saw would have included the greatest tax cut for the rich in recent West Virginia history. To pay for it, lawmakers are talking about a wide range of bad ideas: a $94 million cut to public education, complicated tax increases, and even a food tax. Even with all these maneuvers, one lawmaker told us that we should still expect to see a deficit of over $200 million as soon as next year.

There is another way. We call it the Better Budget Framework for West Virginia. For the last 3 weeks, we have been talking to citizen leaders and lawmakers on both sides of the aisle - including members of Democratic and Republican leadership.  The budget framework below represents a simple way to get out of this mess.

It includes just 4 steps:

Increase the sales tax from 6 percent to 6.5 percent.

Do what other states have done and close sales tax loopholes, by expanding the sales tax to industries that have been exempt (telecommunications, digital downloads, personal services, electronic data processing,  personalized health fitness, contracting services, technical evaluations).

Institute a fair share tax of 1 percent on income over $200,000.

Institute a refundable 5 percent Earned Income Tax Credit, for working families - to incentivize work and make the plan less regressive.

This plan would generate roughly $270 million in revenue, on par with the targets set by other plans. Here are 10 benefits of the simple, better budget plan:

1. No cuts to K-12 education.
2. No tax cuts for the rich.
3. Fewer tax increases on working families, then the latest "compromise" plan.
4. No cuts to the Promise scholarship, and no new cuts to Higher Education.
5. No cuts to public broadcasting, the Women's Commission, or the arts.
6. No government shutdown.
7. No big new deficit in 2019.
8. No complicated triggers.
9. No food tax increase or other complicated tax increases.
10. No cuts to hospitals and health care.

To be clear, this budget framework is not perfect.  It's pragmatic. When we talked with lawmakers from both sides of the aisle, these were the priorities they listed. Like any good compromise, everyone will find something not to like in it -- including our own organizations and partners. We call it a framework, because some of the details could be tweaked (for instance, we'd be happy to see a sugar-sweetened beverage tax in exchange for a lower sales tax) and you would still get the same 10 core benefits.

Please click here to ask your lawmakers to sign-on to the Better Budget Framework, and help stop us from going the way of Kansas. Now is not the time for the greatest tax cut for the rich in West Virginia history.  It is not the time for complicated maneuvers.  It is not the time to subject ourselves to a decade of budget deficits.

Please encourage lawmakers to sign on to the Simple Plan.

It is up to us to Protect West Virginia!

Protect West Virginia is a grassroots coalition of more than 300 individuals and 30 organizations who oppose further budget cuts that harm our communities and who want to connect West Virginia values to state budget priorities.

May 15, 2017

Lucky for us that would never happen

At least the one in mythology was harmless.

All kinds of things wind up in my inbox, most of which are unsolicited and quickly deleted. Still, I take a look every now and then. This weekend, I received a post from writer and public speaker Linda Arnold titled "You Just Can’t Reason With Some People – Here’s Why."

Among other things, she discusses narcissistic personality disorder, a mental disorder identified in the DSM-5 manual of the American Psychiatric Association. 

Arnold presents the following checklist and asks if it rings any bells with anyone in our lives:

Has a grandiose sense of self importance
Is unwilling to identify with the needs and feelings of others
Has a sense of entitlement – unreasonable expectations of especially favorable treatment
or automatic compliance with his or her expectations
Believes he or she is unique and special
Requires excessive admiration
Is preoccupied with fantasies of unlimited success, power, brilliance, beauty or ideal love
Takes advantage of others to achieve his or her own ends
Is often envious of others or believes others are envious of him or her
Often acts in an arrogant fashion
After checking that list, I thought, golly gee, wouldn't it be unfortunate if such a person were in a position of global responsibility? Like, you know....sad!