Could Surging Steel Imports Lead to the Further Decline of West Virginia Manufacturing?

A new report from the Economic Policy Institute outlines the recent risk to the U.S. steel industry from a rapid increase in steel imports. According to the report, in facing the lack of demand in the aftermath of the Great Recession, steelmakers in other countries continued to add production capacity with government support. As the U.S. recovered from the recession, those countries have leveraged their excess capacity, exporting the surplus at below-market rates, with the U.S. as the major target for exports.

U.S. steel imports increased from 28.5 million net tons in 2011 to 32.0 million net tons in 2013, and have grown even more this year. Imports have also grown relative to domestic production and consumption. The jump in imports has led to a decline in the domestic steel industry, with falling production and income, along with layoffs or reduced wages for thousands of workers.

The steel industry supports over half a million jobs in the U.S., including 6,200 in West Virginia. And as we showed in our 2013 State of Working West Virginia report, the fates of the steel industry and the rest of manufacturing, as well as the coal industry, are closely tied. The steep drop in coal mining and manufacturing employment in West Virginia during the 1980s was directly tied to the collapse of the region’s steel industry.

Untitled

In the past, trade remedies have provided relief to the U.S. steel industry from the stress of overcapacity, excess supply, and subsidized steel exports, and their effective use can make a difference again. Other efforts, like West Virginia’s Buy-American proposal, would require the use of U.S.-manufactured products in taxpayer-funded projects in the state, encouraging domestic production over foreign imports.

Budget Beat – May 23, 2014

Funding Cuts Restored

This week, the legislature voted to fully restore funding cuts to family-support programs that Governor Tomblin had vetoed in March. Governor Tomblin has said he will sign the legislation this time around. Support in the House of Delegates was unanimous, with a vote of 90-0.

In reversing course, the governor and legislators responded to pressure from the Our Children Our Future Coalition. Ted Boettner and Jim McKay authored this oped which appeared in last Sunday’s Charleston Gazette Mail. And the coalition gathered at the Capitol on Tuesday with families and workers who would be affected by the cuts. Here’s more from West Virginia Public Broadcasting.

5.20.14 OCOF vigilOur Children Our Future Rally on May 20, 2014
(photo from West Virginia Public Broadcasting).

“Our democracy is working. Kids and families made their voices heard, and lawmakers from both sides of the aisle listened,” said Stephen Smith, Executive Director of the West Virginia Healthy Kids and Families Coalition. “We congratulate House and Senate leadership for finding a way to make this investment in our state’s future. Governor Tomblin has worked hard with his cabinet secretaries, law enforcement, advocates, and lawmakers to vet these programs. The research speaks for itself: we cannot afford to turn away $14 million in leveraged funds; we can’t afford to lose 80 jobs.”

Here’s more on the governor’s decision from West Virginia Metro News.

Tweaks Complete to Minimum Wage Legislation

Also while in town this week for interims, the legislature passed HB 201, which allows businesses to continue to use alternative methods of calculating overtime for eligible employees under federal law, while preserving the increase in the state’s minimum wage. HB 4283, passed during the regular session, increases the state’s minimum wage to $8.75 by 2016 for all employers in the state.

State EITC Would Make West Virginia’s Tax System More Fair

In West Virginia, as in other states, low-income workers pay a higher percentage of their wages in taxes than do high wage earners. A state Earned Income Tax Credit (EITC) would create a greater balance, giving a tax reduction to low-income workers. West Virginia should model its EITC after the federal program which has been around since 1975 and has raised millions out of poverty. Read more details in Sean’s blog post.

Nonprofit Association Provides Support for West Virginia Organizations

Do you run or work for a nonprofit organization in West Virginia? If so, membership in the West Virginia Nonprofit Association is a great resource. The WVCBP has benefited from its membership with discounted fees for seminars and valuable networking on the group’s listserv. Learn more about membership in the WVNPA here.

Reminder: Survey from Governor’s Office

If you were impacted by the January 9 chemical spill into the Elk River, now is your chance to tell Governor Tomblin how you think the state reacted to the emergency. You can still respond to this survey until Monday, May 26.

West Virginia Can Improve its Tax System with a State Earned Income Tax Credit

Most state and local tax systems are regressive, with a reliance on sales tax and relatively flat income tax brackets leading to the poor paying more of their income in state and local taxes than the wealthy. West Virginia is no different, with West Virginians who earn less than $15,000/year paying an average of 8.7% of their income in state and local taxes, while those earning above $282,000 paying only 6.3%.

UntitledSource: ITEP

But unlike West Virginia, 25 states and the District of Columbia have established State Earned Income Tax Credits (EITCs) to help alleviate the regressive nature of state and local taxes. A new report from the Institute on Taxation and Economic Policy shows just how effective a refundable state EITC would be in counteracting the regressive nature of West Virginia’s  tax code.  Depending on the size of the credit, a state EITC in West Virginia can make a big difference. For example, a 50% credit would reduce the effective tax rate on the state’s poorest workers from 8.7% to 5.2%. The average refundable state EITC is equal to 16 percent of the federal credit, but the credit percentage varies widely by state. 

1Most state EITCs are based on some percentage of the federal EITC. The federal EITC, which has been around since 1975, works by providing tax reductions to low-income workers, which both rewards work and boosts income. The federal EITC has also been wildly successful increasing workforce participation and helping 6.5 million Americans escape poverty in 2012, including 3.3 million children, and has historically enjoyed broad bipartisan support. 

The most effective state EITCs are refundable. Non-refundable EITCs like those offered in Delaware, Maine, Ohio, and Virginia are largely ineffective because they can only be used to offset income tax liability even though sales and property taxes make up the vast majority of the total state and local tax bill faced by working families. Refundable EITCs are much more effective because they work to offset all taxes paid by low-income families.

While it would cost the state revenue to enact a state EITC, it would cost far less than the proven-to-be-ineffectual business tax cuts that have been the source of the state’s recent revenue problems, and the state is currently leaving a lot of money on the table by refusing to raise the tobacco tax.

You can read the full ITEP report here.

Like It or Not, Obamacare is Working

Obamacare, like it or not, seems to be working. While some headlines this week showed that the popularity of Obamacare continues to slide, recent surveys are finding the percentage of uninsured people across the country is at historic lows. (Oddly, popularity of the Affordable Care Act, which we all know — should  know, at least —  is one and the same thing, is significantly higher.)  West Virginia has blown past expectations and leads the country in Medicaid expansion enrollment. At last count, more than 117,000 West Virginians had newly enrolled in Medicaid. Since most of these folks are likely to have been previously uninsured, expansion alone has dramatically reduced the number of uninsured West Virginians, previously estimated to be around 250,000. 

So we know that Obamacare is reducing the number of uninsured. We know that it has increased the number of young adults who have been able to stay on their parents health plan while they go to college or get started in their careers. We also know that it is shaping up to cost significantly less than was originally thought.

And just recently, more evidence popped up that Obamacare is working. Data from West Virginia’s largest hospital system, the Charleston Area Medical Center (CAMC), showed a huge drop in the number of self-pay patients. In just one month, from December of 2013 to January of 2014, the percentage of self-pay patients treated at CAMC hospitals tumbled from 6.9 to 1.7 percent, a 75 percent decrease. In February, it dropped again to only 1.0 percent. It just so happens that this is the same time frame when insurance plans under Obamacare kicked in. While many of the smaller provisions have been rolled out over the last few years since the bill was signed into law, the “meat and potatoes” of Obamacare, the insurance exchange marketplaces and Medicaid expansion, began on January 1st of this year.

The percent of self-pay patients at CAMC dropped steeply in the first two months of 2014

Source: CAMC

Source: CAMC

While you may not like Obamacare, the Patient Protection and Affordable Care Act has so far shown that it is working by doing exactly what it was designed to do: insuring more people and helping to control costs.

Budget Beat – May 9, 2014

Some Funding Cuts Restored

This week, Governor Tomblin announced that he would restore one-time funding to some of the family-support programs that were impacted by his veto in March. While he did restore $260,000, this falls far short of the $1 million in funding passed by the legislature.

The Our Children Our Future campaign will keep up the pressure on the governor at a rally on May 20 at the state Capitol. You can find out more information and register here.

Read more in the Huntington Herald-Dispatch.

Obamacare Doing Its Job in the Mountain State

While Obamacare still has its share of haters, it is making a difference in West Virginia by bringing down the number of uninsured. This increase in people having access to health care can be seen by the sharp reduction in self-pay patients at Charleston Area Medical Center (CAMC) facilities. Read the details in Brandon’s blog post.

Source: CAMC

Source: CAMC

The percent of self-pay patients at CAMC dropped steeply in the first two months of 2014

Survey from Governor’s Office

If you were impacted by the January 9 chemical spill into the Elk River, now is your chance to tell Governor Tomblin how you think the state reacted to the emergency. From now until May 26, the governor’s staff will be collecting responses to this survey.

How Popular is That Name Your Mama Gave You?

This weekend is a time to thank moms for all they have done, and one of the first things was to give us a name. Find out where your name ranks in terms of popularity, or a name you are considering for your own little one, like WVCBP’s Ted Boettner and his wife Rebecca are for their future bundle of joy, at this link.

mothers-day-header13.gif

Budget Beat – May 2, 2014

West Virginia One of Just Eight States Still Cutting Funding for Higher Education

Now that the recession is in the past, most states are restoring funding to higher education. West Virginia, however, is still reducing funding, second only to Wyoming, spending 21.6% less per student in FY 2014 than in FY2008, a reduction of over $1,800.

Read more in “States Are Still Funding Higher Education Below Pre-Recession Levels”, released this week by the Center on Budget and Policy Priorities, and Sean’s blog post.

Because of the hundreds of millions it gave away in tax cuts, the state has had to cut back the money it gives to the state’s colleges and universities. In fact, West Virginia gave away more than enough in tax cuts to have provided free instate tuition at all the state’s colleges and universities. Instead, students and their families are paying more in tuition because of funding cuts.

Read more in the State Journal, the Charleston Gazette, the Charleston Daily Mail and West Virginia Public Broadcasting.

higher_ed_2014_social_media_template_296192

Scrapping the Social Security Payroll Tax Cap

As Social Security gears up for more Baby Boomers to begin collecting benefits, policymakers are looking at ways to close any possible budget shortfalls in the program. According to the Center for Economic and Policy Research, one idea is to eliminate the Social Security Payroll tax cap. Right now, the caps stands at $117,000 a year. In other words, someone making $234,000, or twice the cap, pays the tax on only half of those earnings. In West Virginia, scraping the cap would affect 25,073 employees or 3.2% of the state’s workers.

Momentum Growing: Urging Funding to be Restored

On March 23, Governor Tomblin used his line-item veto power to cut over $1 million from In-Home Family Education, Family Resource Networks and Starting Points Family Resource Centers, Child Advocacy Centers, domestic violence programs and services, and child abuse prevention. Many of these programs saw cuts in prior years or have not had any funding increases for years, while the cost of services and the increase in the number of families needing assistance has continued to rise, making it impossible to serve as many families and children.

On May 20, families, religious leaders, lawmakers from both parties, and community groups will join together at the state Capitol, when there is likely to be a special session of the legislation, to make one final push for these essential programs.

“This event will either be a celebration or a call to action,” said Stephen Smith with the WV Healthy Kids and Families Coalition, one of the groups involved with the Our Children, Our Future Campaign.”We hope that by then legislators and the governor will have worked together to find a solution, but if not, we will be ready to strongly make our case one last time.”

For more information, visit www.ourchildrenourbudget.eventbrite.com or contact Stephen Smith at ssmith@wvhealthykids.org or 304.610.6512.

West Virginia Leading Nation in Cuts to Higher Education

A new report from the Center on Budget and Policy Priorities shows that West Virginia is not alone in making cuts to higher education in recent years, but unlike West Virginia, most states are starting to reverse those cuts, as the effects of the recession fade away. 

The report shows that after adjusting for inflation, 48 states, including West Virginia, are spending less per student now than they did before the recession, with an average spending cut of 23% per student. West Virginia is spending 21.6% less per student in FY 2014 than in Fy 2008, a reduction of over $1,800.

As a result of these cuts, tuition at public colleges and universities across the country has increased. Average annual tuition at public four-year colleges has increased by 28% since 2008, and has increased 26.3% in West Virginia, after adjusting for inflation. The increase in tuition costs has far outpaced income growth for middle-class families, and has grown even faster than the income of the top 1%. This rapid rise in tuition has increased student loan debt, deterred low-income students from enrolling, and has reduced students’ future earnings.

This past year, most states have begun the process of restoring the recession-induced cuts that they have made to higher education. Forty-two states are investing more in higher education this year than they did a year ago, adjusting for inflation, but West Virginia is not one of them. In fact, of the eight states that are continuing the cut higher education, West Virginia has the second-deepest cut this year.

5-1-14sfp-f4

As we’ve pointed out before, the reason for West Virginia’s continued cuts to higher education is due to a lack of revenue. And that lack of revenue is almost entirely self-inflicted from a series of tax cuts, costing the state a total of $425 million this year.

Untitled

 With more tax cuts on the horizon, and no new sources of significant revenue, West Virginia has no future plans to restore the cuts to higher education. Which, if current trends continue, will lead to even higher tuition, more debt, and fewer college graduates in a workforce that already lags far behind.

2