Frying pan to fire with latest tax plan

This week, the West Virginia House of Delegates will vote on House Bill 3300, its version of repealing the state income tax. It’s quite a bit different from Gov. Jim Justice’s proposal.

While I have serious concerns about Justice’s plan, as I’ve written here more than once, I think the House version would do even more damage over the long run. The governor’s plan would at least try to balance some of the cuts with some revenue increases, even if some of these are regressive and unpopular, in an effort to preserve some programs and services.

The House version is all cuts, all the time. Basically, it would cut personal income taxes by $150 million per year over several years until it’s gone, with no effort to make up lost revenue.

This would come on top of untold millions of dollars taken from the K-12 education budget to pay for new legislation defunding public schools to pay for education savings accounts.

In 2021, the state’s base budget, made up of general revenue and lottery funds, is about $5 billion. Of that, more than $2 billion, or about 43%, comes from income taxes. Seven years out, and we’d be out over $1 billion. It gets worse from there.

The income tax is West Virginia’s only progressive tax, meaning that those with higher incomes pay a somewhat higher rate. If eliminated, more than 60% of the benefits would go to the richest 20% of residents. The pain would go to everyone else, from young children to students to workers to retirees.

This becomes clear when we consider where our tax dollars go as things stand now. Over 40% goes to public education. Nearly 25% goes to health and human resources, which provides health care and other benefits to hundreds of thousands of West Virginians, including many seniors, children and people with disabilities. About 10% goes to higher education.

What’s left covers everything from public safety to parks and natural resources to outdoor recreation/wildlife management to environmental protection to economic development to courts.

House leaders recognized, in a memo circulated to delegates earlier in the session, that an income tax repeal would have painful consequences. Specifically, the memo noted: “Such a plan will require measures that are not politically popular standing alone.”

Among the possibilities listed in the memo were across-the-board cuts to “public ed, higher ed, DHHR. This would necessarily involve a real reduction in at least some services;” “Reduction in Higher Education funding including funding to specific schools;” eliminating “all state appropriations to WVU and Marshall;” and “reduction or elimination of promise scholarship.”

Those possibilities were listed about the governor’s plan, which replaced some lost revenue. Cuts under the House plan would be even more drastic.

Contrary to a common belief, tax cuts don’t “pay for themselves,” as West Virginia’s experience has shown with the hundreds of millions in corporate cuts from reforms enacted in 2007.

We’re not an outlier in that respect. A study of tax cuts for the wealthy by the London School of Economics of 18 countries over 50 years found that “such reforms do not have any significant effect on economic growth and unemployment.”

The main things they increase are inequality and the wealth of a few at the expense of the majority. And an abundance of public health research has found that growing inequality makes other social problems worse, whether we’re talking health, crime, social trust or the lack thereof, addiction and general well-being.

Low- or no-income taxes don’t count for much, if you’re living in a wasteland.

(This ran as an op-ed in the Charleston Gazette-Mail.)

Corporate tax cuts or kids and colleges?

Back in 2007, the West Virginia Legislature dramatically changed the state’s tax system, reducing business taxes by hundreds of millions of dollars per year. The package included phasing out the business franchise tax and reducing the corporate net income tax from 9 percent to 6.5 percent. Other cuts and credits would follow.

The annual dollar amount of the cuts, at least $250 million, would have been more than enough to cover the costs of undergraduate tuition for every West Virginian enrolled in state universities, which could have really been a game changer for the state.

Talk about a road not taken.

It was argued at the time that these tax cuts would “pay for themselves,” a scenario about as probable as the belief that if you take gasoline out of your car you can drive it farther. What we did get in that department was an almost annual budget shortfall, including a gap of $27 million this year that had to be made up by one-time transfers from the state Treasurer’s Office.

Usually, budget shortfalls translate into budget cuts.

And the governor’s annual budget report to the Legislature anticipates that the next several years will be even leaner.

This loss of funding has hit higher education particularly hard and raised tuition rates for students. The state spent less per student on higher education in 2018 than it did in 2008.

According to a 2017 report by the West Virginia Center on Budget & Policy, “Since 2008, state spending in higher education has declined by $130 million, adjusting for inflation.” Tuition rates have doubled since the early 2000s, in a state that trails the nation in educational attainment, with all that that implies in terms of lost income and lower workforce participation.

We were also promised at the time that these tax cuts would create jobs, which didn’t happen. According to the Quarterly Census on Employment and Wages, in the 10 years between 2007 and 2017, employment in all industries of all sizes fell from 706,172 to 683,807. The most recent data suggests that, at best, we’re back where we started over 12 years ago.

All of which is to say that the first 10 years of tax cuts brought the state a whole lot of nothing in the way of benefits.

Fast forward to 2020. The Legislature is once again pondering another major round of corporate tax cuts, which leads me to conclude that some people really do want it all.

The latest proposed cuts specifically involve the elimination of the business personal property tax, which covers things like machinery and equipment, tools, fixtures and inventory. There will no doubt be promises that these cuts will pay for themselves and create jobs. Déjà vu all over again.

I’m reminded of Lucy holding the football for Charlie Brown in the Peanuts cartoons.

This alleged “job killing” tax amounts to less than 1 percent of what businesses pay for materials, according to Census data. When you factor in other costs of doing business, such as payroll, energy and capital expenditures, we’re talking about something less than a rounding error. And one peer-reviewed study suggests that eliminating the machinery tax could have the unintended consequence of reducing employment by encouraging automation.

Eliminating this tax would affect state and local governments and particularly hit funding for public schools.

If enacted, these cuts will either mean our schoolchildren and public services take a hit or the lost revenue would be made up by increasing regressive taxes on working families.

It makes a whole lot more sense to invest in our children, workforce and communities.

(This ran as an op-ed in the Charleston Gazette-Mail.)

Getting the band together again

Mission accomplished: winning the 2018 WV teachers' strike

As we gear up for the 2019 legislative session, I have trouble wrapping my head around the fact that this time last year the great WV teachers' and school support workers' strike wasn't much more than an angry gleam in a few peoples' eyes. It was a real reminder to me that hope can come when least expected.

Still, there are unresolved issues. Last year's raise still isn't what these workers deserve. PEIA funding in unresolved. Worse, Senate Majority Leader Mitch Carmichael wants to eliminate the business inventory tax, which currently brings in $140 million per year, most of which goes to local school districts.

The promise apparently is that this cut, which mostly benefits out of state corporations, will create jobs and won't hurt funding for education....kind of like the last round of business tax cuts would create jobs and pay for themselves. 

Except they didn't.

History doesn't repeat itself, but it's good to know that West Virginia can still go West Virginia on itself.

What's next in WV's Appalachian uprising?

It's pretty much official. This is more of an uprising than a work stoppage. The movement is driven from below and no formal organization is pulling the strings.

Historically, that's often the way change happens. Working people's organizations fight the day to day fight for their members and allies but most of the time they do so in the absence of a huge movement willing to disrupt business as usual. When movements like this arise--they can't be manufactured or sustained at will, alas--there's sometimes a bit of a disconnect.

But spontaneous mass movements need organizations to consolidate their gains. And organizations can always use the power of a mass movement behind them. But either alone is in this context could be a recipe for disaster.

I could be way off but here's my take on where things stand now:

*First, as I argued here, this uprising has already resulted in major victories in a political climate MUCH more hostile than the 1990 strike. I'll say it again, don't minimize the victories. To see all the changes most of us want means we need to change the composition of the legislature so that friends of working people are in positions of leadership. And Congress.

*Second, I think the proposal to use the $58 million, wherever it may come from, for PEIA is just a distraction designed to defeat the movement. I'm no PEIA expert, but the people I know and trust who are all say it needs a long term fix, not a one time bump.

*I think the best outcome would be to push for the raise and long term task force with adequate representation from people directly affected--but to commit to long term educating, organizing and mobilization through May and November and beyond. The progress made shows what can happen when people wake up--but the ground working people have lost in recent years shows what damage can be done when we fall asleep.

*As to the senate president's assertion that the state budget is a fixed amount, that just isn't true. The state budget is the product of deliberate values and choices--or the lack thereof--not cosmic destiny.

*Division and confusion play into the hands of our opponents. And time may or may not always be on our side.

West Virginia's teachable moment

(This alert went out from the Legislative Action Team for Children and Families, which includes over 20 of WV's leading non-profits and organizations working for children and families.)

This is a teachable moment... will we learn the lesson?

In every county across West Virginia our teachers, service personnel, and state employees have put their jobs and bodies on the line in the struggle for decent wages and benefits.

For those of us who want to live in a a state that meets its obligations to its residents with good schools, good infrastructure, public parks, good jobs and excellent quality of life, the struggle of these teachers, service personnel and state workers is OUR struggle. THEIR fight for a better state is OUR fight for a better state.

This is a teachable moment for all of us. Our teachers are teaching all of us a valuable lesson.

For the last 10 years our leaders have chased down the blind alley of tax cuts for corporations, which neither paid for themselves nor created jobs.

For the last 100 years our state has bumped up against the dead-end of an economy where our natural and human wealth has drained away. Our policies have enriched out-of-state corporate CEOs and left us behind. We have failed to keep our promises to our children. We cannot afford another failing grade.

This is a test. One we cannot afford to fail.

This is a teachable moment for all of us, but only if we learn the lesson.

This could be the moment we learn from past mistakes. This could be the moment when we reverse course and invest in our children and our schools, invest in the people who care for our children and families and keep us safe.

In West Virginia, we care about one another. Our values are on display all across the state as our neighbors, families and churches are working together to support children with food and care, standing side by side on picket lines lifting our voices together calling for change, and working to make that change a reality.

What can you do to help during this critical time so we learn the lessons that our brave educators and their allies are teaching us? 


TAKE ACTION! 
JOIN OUR BRAVE TEACHERS, SERVICE PERSONNEL AND PUBLIC WORKERS, SO WE LEARN FROM THIS TEACHABLE MOMENT AND PASS THIS TEST FOR WEST VIRGINIA'S FUTURE. 

Please call the following leaders and urge them to put people first, come to the table, and work for a solution that is fair for WV families, teachers and students.  Please be courteous to the person answering the phone:

Governor Jim Justice, 304-558-2000
Senate President Mitch Carmichael, 304-357-7801
House Speaker Tim Armstead, 304-340-3210

Reach out on Twitter:
@WVGovernor
@SenCarmichaelWV
@ArmsteadWV

Support your local teachers and service personnel by posting on social media, visiting picket lines or honking when you drive by, send messages of support to local school boards.
Continue to stand together #55Strong #55United.

Share this Action Alert with your friends and networks.

Making sense where there isn't a lot

If you've been trying to make sense of the budget mess in the state capitol, good luck. Here are a couple of news articles that lay out the basics, one from MetroNews and one from the Gazette-Mail. Short version: it's a mess and there's a lot at stake.

Here's my take on it, as published in a Gazette op-ed this week: 

Gov. Jim Justice seems confident that a deal on the state budget is within reach, having told those attending a news conference, “I think we’re on a pathway to pass a budget that’s going to be really special.”

Of course, things could be “special” in all kinds of ways.

I really appreciate the governor’s sustained effort on behalf of a budget that benefits all West Virginians and doesn’t throw any of us under the bus (not to mention the fact that he raised the bar significantly on any and all future news conferences involving visual props).

While I understand the desire to reach a deal with the Republican Legislature, I hope the result isn’t a “compromise” that would hurt working families while giving a tax cut to the wealthy and causing more serious fiscal problems down the road.

Some elements of a proposed “compromise” proposal now being discussed are pretty ominous. These include major cuts to the state’s income tax, which is the only tax based on the ability to pay; increases in regressive consumer taxes; and the promise of long-term and ongoing budget deficits that could further slash the things we need to thrive in the years to come.

As Brad McElhinny reported for Metro News, the proposed compromise would “raise revenue up to $50 million for the coming fiscal year but cut revenue by $170 million each of the following two years, an analysis says.”

An assessment by Mark Muchow, deputy secretary of the Department of Revenue, estimates that, by 2020, this will cause a revenue decline of $220 million due to income tax cuts. This would come on top of year after year of major budget cuts.

On top of that, the Institute on Taxation and Economic Policy found that the proposed compromise would raise taxes for the bottom 80 percent of West Virginia households, while cutting them for the wealthiest 20. The biggest winners would be the wealthiest 1 percent, who would see a cut of over $3,700.

This comes at a time when revenue increases are needed for the things we value most: schools, higher education, infrastructure, kids, seniors, veterans, parks, recreation, etc.

It’s one thing to raise revenue to maintain our quality of life, but making the tax system more unfair to low-income families in order to give yet another break to those who don’t need it is just wrong.

As Sean O’Leary, from the West Virginia Center on Budget & Policy, recently tweeted, “If WV is going to increase taxes on working families, it should be for investing in schools, roads. Not to pay for tax cuts on the wealthy.”

What West Virginia needs is a compromise that doesn’t compromise our future.

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Act now to protect West Virginia's future

WV Governor Jim Justice has issued a call for a special session of the legislature to start on May 4 to work on the state budget. The governor seems confident that a deal is within reach, having told those attending a press conference that “I think we’re on a pathway to pass a budget that’s going to be really special,”

Of course things could be "special" in all kinds of ways. While I appreciate the governor's attempt to reach a deal with the Republican legislature, I hope he doesn't reach a "compromise" that would hurt working families while giving a tax cut to the wealthy and causing more serious fiscal problems down the road. You can read more on that here and here.

This is a time when revenue increases are needed to preserve the things we value most: schools, higher education, infrastructure, kids, seniors, veterans, parks, recreation, etc. That's one thing. But making the tax system more unfair to low income families while giving a break to the well off is just wrong.

As my friend Sean O'Leary from the WV Center on Budget and Policy recently tweeted, "If WV is going to increase taxes on working families, it should be for investing in schools, roads. Not to pay for tax cuts on the wealthy."

If the Republicans want to force the issue--and they have the votes--then so be it. Let them own it. All of it.

So what can you do about it? Several things, including:

*Call the governor's office and say something like, "Thank Gov. Justice for fighting for a budget that's good for all West Virginians. But please don't accept a compromise that hurts working West Virginians and makes our problems worse in the future."

*Contact your legislators. You can find out who they are here. The legislative website is here.

*Learn more by watching this Facebook Live presentation by Sean Monday, May 1 at 5:30.

*Show up at the capitol on Thursday, May 4 at 9:00 to stand up for The People's Budget.

Game on. And for real.

You really can't make this **** up

The website WalletHub recently came up with a list of the best and worst places for millennials to live. It's no surprise that West Virginia came out on the bottom. But, as my friend Stephen Smith wrote with Pastor Mason Ballard, it's the best state to come to if you want to make a difference. And God knows we need that.

One of the reasons WV is unattractive to newcomers is the fact that it's kind of falling apart and the Republican majority in the legislature wants to pass a poverty budget that keeps things that way. Gazette-Mail reporter Phil Kabler had a great riff on that theme in the first part of this column.

One thing that could make things better is a budget that invests in people and infrastructure, as Gov. Jim Justice has proposed. Some of us were hoping he would veto the  legislature's proposed budget. And some of us, including me, sounded the  alarm and urged people to contact the governor in support of a veto.

I guess that's something to scratch off the list. And that's no (metaphorical) BS.

Two last thoughts:

*first, this really is the year of political props; and

*second, as I've argued before, we really should change the state motto from "Mountaineers are always free" to "You can't make this **** up" At least until we deserve the old motto again.

It's over. Ish.

The WV legislative session, one of the weirder ones in recent memory, officially ended this weekend. Sort of. There's the teeny tiny issue of the budget, where major disagreements remain between Democratic Gov. Jim Justice and the Republican legislature.

Specifically, the budget has no new revenue and deep cuts to programs like Medicaid. When you figure in the federal match, this could mean a cut of $200 million. The governor hasn't vetoed the budget yet as far as I can tell, but it seems likely to me that this will happen and the games will begin. The deadline to state shutdown is July 1.

On the bright side, the budget passed isn't as awful as some that were proposed during the session. More work is needed to pass a decent one.

On the brighter side, I'm especially happy about two victories, one of which involved killing a bill and the other involved passing one.

I'm actually gladdest about the bill that died, a mean-spirited SNAP bill that would have taken away food assistance from the poorest West Virginians while also taking millions out of the state economy.

The one that passed will give people with felony convictions the chance to petition the courts to have the offence reduced to a misdemeanor after several years. It's weaker than what we would have liked but it's way better than it was before.

Mulling over that and other limited victories has led me to formulate a maxim which I plan to copyright:

"Those who minimize hard won but limited victories for social justice tend not to be the people who worked their ass off to win them."

And you can quote me on that.

Time to clear the palate?

There's a big dust up going on at the WV capitol right now over a medical marijuana bill. So far it's generating a lot of heat. (Did you notice I resisted the temptation to make a cheesy smoke joke?)

 Earlier today, there was a public hearing on nasty changes to the SNAP program. I was one of around 20 people who opposed it. The only one who spoke in favor was a paid lobbyist.

There are several bad budget bills floating around. Here's just one example from the senate.

I mostly just want things to be over.

If you just want a change from all that, in the most recent Front Porch program/podcast from WV Pubic Broadcasting, we talk about such burning issues as:

*Is it cool for public schools to teach little kids that Adam and Eve rode dinosaurs?; and

*What we think about Mike Pence's rules for having dinner or drinks with someone of the opposite sex.

WV Public Broadcasting also re-released a popular Front Porch program in which I attempt to teach the uninitiated how to speak Appalachian.

(The Spousal Unit noted an error I made in  the podcast while discussing cool forms of Spanish profanity in which I called a verb a noun. I usually don't make mistakes where profanity is concerned.)

SNAP crackle pop

The latest Front Porch includes  a pretty brisk debate on  (food stamps), poverty and the current budget showdown in WV politics. You can check it out here.

Meanwhile, re: ACA. Damn.

Heads up!

It's understandable that a lot of attention is focused on the...stuff rolling out of Washington these days. But there's a huge threat at the state level and politicians of both parties talk about the need to slash the state budget, which has already been cut for the last several years.

Now it's even more serious. We're talking serious damage to the things that make life livable here..

There's no such need. They can easily raise revenue to protect schools, kids, seniors, higher ed, job training, parks, tourism, public safety and all that. It's a matter of choice.

I urge everyone in WV who cares about any of that to check out www.protectwv.org, learn about what's at stake, sign up to keep up and show up.

For West Virginians, this crosses divides. Whether you love or hate Trump, you probably know someone who goes to or works at a public school or college, have a favorite state park, go to a library, drive on roads, and care about public safety. Etc.

It's on. Now.

#protectWV #nofailedstate

Not a good sign

Over the years, I've often complained about West Virginia's sometimes skewed budget priorities. These go back way before the current economic and fiscal meltdown the state faces now. And the perfect example of this is the state of funding for higher education.

You can find my recent rants about this in the Gazette here and here.

Here's a recap of the mini-rant version:

*WV ranks at the bottom in terms of higher educational attainment;

*It's also at on near the bottom on income and poverty statistics. (Hmmmm....might there be a connection?);

*Back in 2007 and since, when times were better, the state cut taxes by more than enough to provide free instate tuition and fees to all WV students with money to spare; and

*When adjusted for inflation, WV has cut higher ed funding by more than 40 percent since 2008.

It's starting to show. As WV Public Broadcasting reports, college enrollment here has dropped for the fifth straight year.

Any way you slice it, that's not a good sign. And it's likely to get worse before it gets better--unless we fight back to restore sane budget priorities, which includes raising revenue.

You get what you pay for

West Virginia is dry as a bone right now, although it may rain tomorrow inshallah. It's so dry that dust springs up when our dogs walk across the field. The creek is dry except for a few holdout holes for the first time since 2012. Oh yeah, and fire season is  approaching.

Fall brush fires around here are not as catastrophic (for now) as those in California and other places, but they can be pretty scary. I remember one year when you could see long lines of fire snaking along the mountains of Logan County. In fact, the one on-duty injury I sustained in my short, happy and inglorious career as a volunteer fire fighter happened during a brush fire.

(Actually, it was a burn from a flare, but the flare started it.)

Anyhow, fire season and managing woodlands has gotten a bit harder lately, since the state had to lay off 37 foresters due to legislative inaction. Come to think of it, those guys might have been useful in reducing the impact of severe flooding in the future by monitoring the damage done by corporate clear cutters.

Holy hashtag failed state, Batman!

Meanwhile, the state's opioid crisis keeps rippling out. This WV Public Broadcasting story explores how it's impacting the foster care system in the state.

And, while we're at it, here's an op-ed by my friend the Rev. Matthew J. Watts about what might happen politically if all of the state's convicted felons voted. They can in WV, but many don't vote or even realize that it's legal here.

Finally, a little over a year ago I was part of an AFSC delegation to Palestine. I have many grim and sad memories of the trip. However, I have nothing but fondness when I think back on hanging with comrades and drinking Taybeh, a primo Palestinian beer.

Bang bang

Here's an interesting look at gun violence in America by way of Vox. I have to give WV Senator Joe Manchin  some credit for trying to take some rational action on this issue. He tried once before after Sandy Hook and took some heat for it.

Meanwhile, the latest Front Porch podcast looks at the size and state of state government in WV.

Finally, this article about how some fish can recognize human faces is not recommended reading if you plan on hitting a seafood restaurant anytime soon.

Make some noise, WV

We're on uncertain ground in WV these days. For the first time the state is facing a government shutdown as a result of the inaction of the Republican controlled legislature, especially the House. If that happens it's closing time for all kinds of things, like state police, nursing homes, transportation, public safety, education, parks, libraries, health care and tons more.

If there ever was a time to make some noise, this is it. Here's a link with information about quick and easy actions you can take.

My message would be that the House needs to avoid a shutdown and drastic cuts to needed services and PEIA by passing a tobacco tax increase. Or you could just keep it simple with this message:
#dontshutdownmystate.

Seriously, it's time to turn up the volume.

Is it over yet?

West Virginia's primary election is tomorrow (Tuesday, May 10). I don't know about you, but I'll be kind of glad when it's over. Maybe. Anyhow, here's a bonus section of The Front Porch with a focus on the state supreme court race.

Also, this column by E.J. Dionne has some interesting things to say about empathy and Appalachia. I think it's worth a look.

And speaking of wanting something to be over (in a good way), I'm dreading next week's special session of the legislature to deal with the budget. It promises to be a true goat rope.

Into the weeds

Some people think things like the state budget are boring. I always say the breathing is kind of boring too, unless someone is choking you. Then it's fascinating. The latest Front Porch is about WV's budget woes.

Hard Times

The latest Front Porch podcast is out. This time the focus is on WV's tanking economy and budget and what we might be able to do about it. I'm not as pessimistic as some people. Maybe that's because I've been to Gaza...

We're not in Kansas...yet

The Republican-led WV legislature continues to mull an overhaul of the state's tax system. I just hope the end result won't be a redo of the Kansas tax cut massacre. Fortunately, at least some people are talking sense about state taxes. I just hope somebody listens before too much damage is done.