The recent budget deal announced by leaders in Congress has left out one very important provision for those struggling to find work, the extension of emergency unemployment insurance benefits. On December 28, 1.3 million long term unemployed workers, including 16,000 West Virginians, will lose their unemployment benefits.
As I previously discussed here, these benefits increased the number of weeks that unemployed workers could collect unemployment insurance benefits. Now, the looming expiration comes at a time when long- term unemployment remains a big problem for the country. In fact, it is the long-term unemployed that are keeping the unemployment rate above pre-recession levels. As this chart shows, the unemployment rate of those who are unemployed for only a short period of time is back down to pre-recession levels. It is for those who go months without finding a job where the unemployment crisis lingers.
And for those who are unemployed, it is still very difficult to find a job. Currently there are still three unemployed workers for every job opening. And not only are the odds against them, the long-term unemployed often face discrimination from potential employers, creating a stigma for the workers and keeping them unemployed even longer.
As the above chart shows, the ratio of job seekers per job opening is worse now than its peak during the previous recession. Ending extended emergency unemployment benefits while the long-term unemployment rate is so high would be unprecedented. The current long-term unemployment rate is much higher than it was when any of the previous emergency extensions were ended.
There are millions of workers struggling to find work in a still-fragile economy. Failure to extend federal unemployment programs would mean less spending by unemployed workers and their families, hurting the economy and threatening the weak recovery. Emergency benefits are an effective tool at helping both workers and the overall economy.
Marcellus Job Numbers Are Overestimated According to New Report
A new five-state collaborative was announced this week that will study the local impacts of gas drilling in the Marcellus and Utica formations. The group, of which the WVCBP is a member, released its first report and launched its website this week. Exaggerating the Employment Impacts of Shale Drilling: How and Why reports that the gas industry claimed inflated job growth in communities where drilling is occurring. For more, here’s Charleston Gazette coverage of the report. Look for more research from the Collaborative early next year.
Senator Manchin Votes No
This week Senator Joe Manchin voted against the appointment of Janet Yellen to be chairwomen of the Federal Reserve. Back in September the Institute for Women’s Policy Research – a strong ally of the WVCBP – sent a letter signed by 505 economists in 48 states (including West Virginia) in support of Yellen because of her desire to play an active role in creating jobs instead of just placating narrow banking interests. Fortunately, Yellen received enough votes in the Banking Committee and it appears she will be the next chair of the Federal Reserve. This is good news for working families in West Virginia.
Obamacare to Help Many in West Virginia, Especially Minority Populations
Thanks to Obamacare, many uninsured West Virginians will have access to affordable health care, especially racial and ethnic minorities. In fact, nearly all of West Virginia’s uninsured minority population is likely to qualify for assistance. Read much more in this report.
More Calls to Reform the Fiscal Note Process
In reaction to our paper on fiscal notes, two more West Virginia newspapers, the Martinsburg Journal and the Huntington Herald-Dispatch, support the creation of an independent legislative fiscal office to provide an unbiased look at the state’s fiscal note process.
The lead editorial that ran in the Charleston Daily Mail on Monday was…well, a bunch of malarkey. Or maybe it was hogwash. Either way, it was an inaccurate and misleading piece of partisan hackery (yes, I made that word up*) that was better suited for late-night talk radio and had no business being run in a reputable news source.
Through a number of suspicious and baseless claims, the editorial’s message was that the Affordable Care Act, or Obamacare, is “doomed to failure” because there was no Republican support of the bill when it was passed. The editorial starts by citing several historical pieces of legislation that had bipartisan support and then points out that the ACA did not receive a Republican vote in either chamber. This is the point where the facts end and the misleading begins.
The first claim was that the ACA has cost 5 million people their insurance coverage rather than reducing the nation’s uninsured. There is no basis in fact or actual evidence here because the truth is that the ACA will reduce the uninsured by an estimated 30 million Americans. The Daily Mail is probably referring to the recent media attention regarding insurers who are discontinuing plans that do not meet the minimum standards required by the new law. The ACA requires that all health insurance plans cover certain benefits like emergency room visits, hospitalizations, and preventive care while removing annual and lifetime benefit caps and limiting the amount that a policy holder can spend out of pocket in a given year. All of the plans being canceled now were not up to snuff and did not contain some or any of these minimum standards. However, these canceled policies do not mean that 5 million people will become uninsured. In fact, all of these people will be able to shop for better health plans in the insurance Marketplaces and the majority of them will actually end up paying less! West Virginia is a great example of the impact that the ACA will have on the rate of uninsured as we expect the number of uninsured West Virginians to drop from around 246,000 to about 76,000, a decrease of nearly 70 percent.
The next claim was that the ACA is making health insurance premiums “skyrocket in many areas.” Again, the Daily Mail ignores reality here and is making a completely baseless claim considering that premiums are expected to drop on average while healthcare cost growth is at a historic low. Moreover, they are overlooking the fact that health insurance premiums increase annually and have for decades. In fact, before President Obama was even the junior senator from Illinois, insurance premiums increased at a rate of nearly 10 percent per year on average. Rule changes in the ACA are expected to increase premiums for some people, typically young healthy males, while decreasing premiums for others, typically older people and women. On the whole, however, premiums in West Virginia are expected to drop 1.5 percent on average for people who get their insurance from a large employer and by over 40 percent for people who buy insurance on their own. This claim also overlooks another inconvenient fact – three years after the passage of the ACA, the growth rate of healthcare costs in the United States is currently at an all-time low. Data released earlier this year showed that healthcare costs are growing at the slowest rate they have since the data was first collected in the 1960s. While there is no consensus among health economists attributing this slowdown to the ACA, it is still clear that this fact completely disproves the Daily Mail’s assertion.
The final, and probably most laughable, claim was that the ACA is causing people with pre-existing conditions to be dropped from their health plans. Not only is this inaccurate, it’s actually the opposite of what is happening in reality. This claim goes back to the previous inaccurate assertion about 5 million people losing their health insurance. As we discussed, there are people who currently have a health policy that will be canceled because it does not meet the new minimum standards required by the ACA, and yes, some of those people are going to have pre-existing conditions. However, it does not mean they will become uninsured and, in fact, they will be guaranteed a health insurance policy wherever they want to purchase one. For the first time in United States history, the ACA explicitly forbids any insurer from denying a person insurance due to their health status. Estimates show that currently 13 to 20 percent of people applying for health insurance are denied policies because of a pre-existing condition yet beginning January 1, 2014, that rate will drop to zero. ZERO. Hundreds of thousands of West Virginians have a pre-existing condition, from asthma to cancer to diabetes to heart disease. Thanks to the ACA, none of them will ever be denied health insurance because of their condition, nor will they be charged more for it.
There is absolutely nothing wrong with disagreeing with something if you can support your stance with facts and evidence. Within the ACA there are undoubtedly aspects with which you could argue and there are even some that I personally would challenge. However, making up false and misleading claims to support your position is disingenuous.
Had I decided to stoop to the Daily Mail’s level in this response, I could’ve just summed it up this way: “Liar liar pants on fire!”
*Update: @kenwardjr pointed out that “hackery” is indeed an acceptable word, although Merriam-Webster defines it as an “Indian bullock cart” and Microsoft Word doesn’t believe it exists. However, dictionary.com has my back, defining it as “journalism: hackwork.” Couldn’t have said it better myself.
Fiscal Notes Lacking in Accuracy, Not a Reliable Tool for State Legislators
Fiscal notes are intended to give legislators information on the financial impact of a particular bill and how much a new law will cost (or benefit) the state. They are the price tags attached to legislation. But do legislators rely on fiscal notes? This week the WVCBP released its results of survey on how lawmakers perceive West Virginia’s fiscal note process. Many did not have favorable feedback on the current system.
Coverage of the report this week: the Charleston Daily Mail, the Charleston Gazette, the Washington Post, the State Journal, and the Beckley Register-Herald. The Wheeling Intelligencer ran this endorsement saying that a Legislative Fiscal Office, an impartial agency to oversee the fiscal note process, would quickly pay for itself.
Levy Failure Holds Economy Back
Last Saturday Kanawha County voters shot down an increase of the excess school levy that would have helped fund schools and libraries. Opponents of the levy ran a very successful No New Taxes campaign but, per capita, West Virginians pay well below the national average in property taxes. Read more in Sean’s blog post.
Clearing Up Obamacare Confusion
This week the Charleston Daily Mail reported on the number of West Virginians who will lose their current health insurance coverage due to the Affordable Care Act. If you are confused by the latest on the Obamacare roll-out, and want to know how it’s all affecting West Virginia, check out Brandon’s blog posts on what the first enrollment numbers look like and why there’s still plenty of time for people to sign up.
Unemployed Workers in West Virginia Losing Earned Benefits
In another blow to those hit hard by the Recession (on top of cuts to SNAP): cuts in unemployment benefits scheduled to take effect December 18. Read more here about how 16,000 workers in West Virginia would be affected.
Families are starting to feel the impact of state budget cuts. Residents in the Northern Panhandle this week had a chance to let their legislators know how their families are being directly affected.
The Affordable Care Act (ACA) enrollment figures released yesterday have apparently taken some people by surprise (which is a bit mystifying to me considering the absolute media saturation about the poorly functioning healthcare.gov website for weeks). Enrollment numbers were low across most of the country, they were very low in West Virginia as well—only 174 people have selected a plan in the Marketplace. Before people get all into their Chicken Little freakout mode, or opponents begin jumping up and down with glee squealing “I told you so!” like some 8 year old trying to get his little brother in trouble—here’s a bit of advice, take a step back, take a deep breath, and really think about what these numbers mean.
Oh no, no one’s here! Let’s all freak out!
In September before the Marketplaces even went live, Christine Ferguson, the Rhode Island insurance exchange director, compared early ACA enrollment to layaway, saying the “idea that people are going to do layaway purchasing three months out goes against the American way.” Personally, I wouldn’t and I’m far from the worst procrastinator that I know. I’ve also been to Wal-Mart late on Christmas Eve to see hundreds of people finishing (maybe even starting) their Christmas shopping! Ms. Ferguson has a great point, but I think there’s an even better metaphor.
Obamacare is a football game that has yet to kickoff, but we’re still trying to guess how big the attendance will be hours before the game starts. Judging the success or failure of Obamacare months before the insurance policies officially begin is like counting the people already in their seats at 9am for a noon kickoff. It is insane to flip out (or celebrate) hours before gametime because there are only 174 people in the stands.
Here’s what we do know, though. If Obamacare were Mountaineer Field, healthcare.gov is the Blue Lot, busting at the seams with tailgaters waiting to head to the gate once gametime nears. In its first 24 hours, healthcare.gov had over 2.8 million unique visitors, that’s more than Twitter had users in its first 2 years!
We also know that the ticket takers have been very disorganized and slow since the gates opened and only a few people that are in line to get in are able to do so at the moment, although there’s word that they’re already speeding things up. Plus, you have until the end of the first quarter to get into the stadium, which is great for us procrastinating tailgaters who may want an extra hot dog or beer before heading into the game.
What we haven’t even considered yet either is the 55,000 or so people in West Virginia who have already been enrolled in West Virginia Medicaid. This alone will have reduced the number of uninsured West Virginians by almost 25 percent. (I couldn’t really figure out a way to include them in the football metaphor so let your imaginations run wild—one way or another, they’ll be helping to fill up that stadium.)
The U.S. Department of Health and Human Services (HHS) released the enrollment figures for the Affordable Care Act (ACA) for the first time today. Across the country, nearly 850,000 applications have been completed through the health insurance Marketplace, around 106,000 of which have enrolled in a health plan. In West Virginia, 174 individuals have selected a plan through the Marketplace, although nearly 4,000 applications have been completed. These numbers do not include the nearly 60,000 working-age West Virginians who will be newly enrolled in the expanded Medicaid program beginning January 1, 2014.
Source: Health Insurance Marketplace: November Enrollment Report. November 13, 2013
The figures released by HHS today represent the first month of data from the opening of the Healthcare.gov website on October 1. The rollout of the Marketplaces has been quite rocky to say the least and for several weeks HHS and the Obama administration have been trying to lower expectations for the initial enrollment numbers. Originally, it was estimated that around half a million people would enroll in the first month. The majority, around 75 percent, of those who enrolled in a Marketplace plan did so through one of the 14 state-facilitated insurance exchanges, whose rollouts have generally gone much smoother than the federally run exchanges that West Virginia is a part of.
Although the number of enrolled plans in West Virginia is low, it is not very surprising considering the small individual market in West Virginia, in addition to the myriad problems with the website. Nevertheless, open enrollment continues through March 31 of next year and anyone who is already insured or who enrolls in a plan by that date will not face a penalty.
According to a report from the Committee on Ways and Means Democrats, 16,000 long-term unemployed workers in West Virginia could lose their unemployment benefits in the coming months if Congress does not reauthorize the Emergency Unemployment Compensation (EUC).
EUC was created in response to the Great Recession and was extended under the American Taxypayer Relief Act. EUC has increased the number of weeks an unemployed worker can collect unemployment benefits while looking for work in a slowly recovering economy. Without reauthorization from Congress, EUC will expire on December 18, 2013. If that happens, 6,300 West Virginians will lose their benefits immediately, while another 9,700 would lose their benefits by July 2014.
The expiration of the extended benefits comes at a time when millions of workers are still struggling to find work. The average worker is unemployed for nearly 37 weeks before he or she can find work, 20 weeks longer than before the recession. More than one in three unemployed workers has been without a job for more than six months, while there is still only one job opening for every three unemployed workers. The length of time an unemployed worker in West Virginia can receive benefits has already fallen from 93 weeks to 54 weeks since 2011.
Ending the EUC will not only hurt the workers and their families who rely on the support, but it will also have a negative impact on the economy. The Economic Policy Institute estimates than the expiration of EUC will cost 310,000 jobs in 2014, due to the loss of income and reduced consumer demand.
The potential end of the EUC comes on top of recent cuts to SNAP, as well as the sequester’s impact on child-care subsidies and other support for vulnerable and low-income West Virginians.
The recent defeat of Kanawha County’s proposed education excess levy has put the spotlight on property taxes, creating an opportunity to discuss how West Virginia’s property taxes compare to the rest of the country. While adding up the number of specific levy rates is a poor way to measure tax burdens, actually comparing property taxes between states can be complicated. Rates are expressed in different ways (in West Virginia they are expressed as cents per $100 of assessed value), property can be valued differently (West Virginia assesses property at 60% of its market value), and not all states tax the same property (West Virginia taxes both real and personal property). With that in mind, let’s try to make some comparisons.
One simple way to compare property taxes among the states is on a per capita basis. The Census Bureau collects data on how much each state collects in state and local property taxes. Divide that by each state’s population, and you have how much property taxes are paid per person. West Virginians pay an average of $770 in property taxes per person, ranking near the bottom at 45th lowest among the states and D.C., and more than 45 percent lower than the national average of $1,423.
While measuring property taxes on a per capita basis tells us about the taxes paid by individuals, it doesn’t exactly tell us about whose property taxes are the highest, in the sense of who has the highest property tax rates. For example, a state with high property tax rates might not rank highly on a per capita basis, because those high rates could be being applied to low property values, which wouldn’t bring in much revenue. To get at that question, we can try to measure effective rates, by dividing total property tax revenue collected by the total value of all property. However, measuring the total value of property in a state is harder than it sounds. Fortunately the New England Public Policy Center did it for us in 2002.
When it comes to overall effective property tax rates (property tax revenue as a percent of total property value), West Virginia ranked 37th lowest among the 50 states at 1.09%. This was 18 percent lower than the national average. And, as it turns out, per capita rankings align pretty closely with effective rate rankings, meaning that measuring property taxes per capita does a reasonably good job of telling us which states actually do have high rates.
Yet another way to compare property taxes is to take a hypothetical piece of property, and apply each state’s tax system to it. That is what the Lincoln Land Institute did for its comparison study. For example, for a $150,000 home, West Virginia ranks 48th lowest (note: the Lincoln Land Institute study uses two rates for NY and IL, because of dramatic difference in taxation within those states, so the ranks are out of 53, including D.C.) at 0.74%. This was 44 percent lower than the national average of 1.2 percent.
When it comes to commercial property, with $1 million in property and $200,000 in fixtures, West Virginia ranks 31st lowest at 1.64% or 16 percent lower than the national average. It’s not surprising that West Virginia ranks higher on this measure, since a number of states do not tax business personal property.
Finally, when it comes to industrial property, with hundreds of thousands of dollars in personal property, West Virginia ranks above average, but not all the way at the top. For $1 million industrial in real property and another $1 million in personal property, West Virginia ranks 18th at 1.64%, about 12% higher than the national average. And in a state like West Virginia, it’s increasingly natural gas drillers who are paying.
No matter which way you slice it, West Virginia’s property taxes are below average, unless you are a natural gas driller with several hundred thousand dollars in equipment. And even then, you are still paying less here than in a state like Texas, which also has a large energy industry. But for everyone else, West Virginia’s property taxes are pretty low.
Another Week, Another Reason Why the State Has a Budget Deficit
The number of reasons for West Virginia’s budget deficit keeps growing. This week’s culprit is a decrease in personal income tax collections which fell almost $8 million below projections. Read more in the Charleston Gazette. Add that to the self-inflicted problem caused by business tax cuts and eliminating the food tax without providing for new sources of revenue.
On the other hand, the state’s property tax base has increased by nearly 50% since 2005. The reason? The boom in natural gas production. Some counties, like Wetzel, where gas production has seen huge growth, have seen their assessments more than double. Read more in Sean’s blog post.
Will people in West Virginia lose their current health care plan thanks to Obamacare? Not the case for 99.4% of us and the 0.6% who do are likely to end up with better, cheaper coverage. Read more in Brandon’s blog post.
We told you last week about a series of forums taking place on funding for higher education. At the South Charleston event this week, two Marshall University professors were not impressed by legislators’ reasons to avoid raising taxes on coal and soda to pay for higher education: powerful special interest groups. Read what they had to say to legislators in Ted’s blog post.
We hear a lot about how cutting business taxes creates jobs but there is no evidence to suggest this is a truism. In fact, this mindset has sent West Virginia to the bottom of the list of the most innovative states. As it turns out, low-tax states are not highly innovative. And new ideas are just what the state will need to prepare itself for the decline of the coal industry.
In today’s Charleston Gazette, two Marshall University professors should get a slap on the back for speaking truth to power. In a forum on cuts to higher education spending, the two professors had the following reactions when Delegate Nancy Guthrie and other legislators said they couldn’t raise taxes on coal and soda to fund higher education budget gaps because of powerful corporate interests:
“These meetings are supposed to be a way for you to get input from us — you said explicitly that you need our ideas — and some fairly reasonable, straightforward ideas have been presented here, and the reaction is, ‘well, we can’t do that. That’s not possible politically,’” said Dan Holbrook, chairman of Marshall’s history department.
“I guess I’m saddened that our elected representatives find this sort of thing impossible because they’re — let me put this harshly — ‘held hostage’ by some lobbyists, when the vast majority of the population, if it’s presented correctly, would absolutely support paying slightly more for goods and services if we got some broad-based future economic development that included support for higher education.”
Eldon Larsen, faculty senate chairman at Marshall, said the state’s decision for an across-the-board cut showed an inability to prioritize, and a future fund for education does nothing to bolster students and educators hoping to improve futures now.
“We have to decide what’s most important in this state. Nobody in the legislature is willing to make the hard decisions because it’s ‘too political,’” he said. “When are you going to stop being political — and I know you can’t — and start making the hard decisions about what’s important, instead of treating everything the same when it’s not.”
Not sure I could have said it better myself (minus the Future Fund statement, we need that!).
For the last couple of years we have been a lone voice on the issues surrounding state budget cuts, so it is nice to see someone else pointing out the truism that the state budget is all about our state’s priorities. And, as we’ve pointed out time and time again, these budget cuts were never necessary. In fact, they were self-inflicted.
The good news is that our elected leaders can reverse course by either ending these tax cuts or by finding additional revenue. Of course this won’t happen if they fail to grasp that you can’t have a strong economy without a an educated workforce. And that you can’t have an educated workforce by continuing to cut business taxes and hiding behind lobbyists.