Budget Beat - December 7, 2012
West Virginia #2 In Tax Give-Aways; Legislature Poised to Take a Look
This Wednesday, December 12, Keith Burdette, Cabinet Secretary Department of Commerce and Russell Fry, Executive Director, Work Force West Virginia will present to the Joint Finance Committee on transparency in tax expenditures to create and retain jobs. In October, the WVCBP released "Every Dollar Counts: The Need for Transparency and Evaluation of Business Tax Incentives." West Virginia, like many states across the country, has relied heavily on tax incentives to encourage businesses to locate and expand in the state, and to promote economic growth. It is important that we know the actual cost and true economic impact of the state's business tax expenditures and hopefully this is an issue the legislature will make progress on this session.
On this very topic, the New York Times this week released a report that West Virginia ranks second in the nation in terms of tax subsidies - at $857 per resident given away to attract businesses to the state. Read much more in this week's blog post on the subject of the United States of Subsidies. Read about legislators' reactions to the New York Times study here in an article this week by West Virginia Public News Service.
Work Sharing - Do Unions Oppose It?
Speaking of the state legislature, as reported in last week's Budget Beat, a committee took up the issue of work sharing during the last interim meetings. A blog post this week delves into the possibility that unions might opposed to the concept in the upcoming session. In fact, there is little push-back from unions due to the fact that work sharing is a voluntary program and, if adopted, saves workers from being laid-off.
WVCBP In the News
Expanding Medicaid is likely to be a big issue during the upcoming legislative session. Governor Tomblin this week was urged to take full advantage of this opportunity to use federal dollars to provide health insurance for thousands of West Virginians. In a Charleston Gazette article, Dr. Dan Doyle citied a WVCBP report that estimates that maximum participation in Medicaid expansion would bring more than $3.7 billion in federal money into the state over six years. In turn the state would pay just 3% of the premium costs while insuring an additional 130,000 people. Read more in this week's blog post.
The high unemployment rate of West Virginia's young people was the topic of a West Virginia Public News Service story this week. The decline in good-paying blue collar jobs has made the need for a college degree even more important and an educated workforce helps attract businesses to the state.
The decline of coal production will have far-reaching impacts both economically and culturally as highlighted in a State Journal article today. The WVCBP's work was cited discussing that production declines may not translate to employment declines directly. Miner productivity is expected to fall, meaning producing the same levels of coal will take more man-hours. "In fact, there may be 10,000 more coal jobs in Central Appalachia in 2035 than there were in 2010, despite production falling by 100 million tons, because of falling productivity," wrote analyst Sean O'Leary.