The WVCBP Legislative Wrap-Up
The 2018 regular legislative session was certainly one to remember. West Virginia saw its first-ever statewide teachers strike, a host of bad bills introduced, and a governor often missing from the statehouse at critical times. Let’s take a look back at what happened and how low- and moderate-income West Virginians fared under the capitol dome this past session.
West Virginia’s teachers dominated much of the session after legislators initially failed to hear their demands for a permanent fix to the Public Employee Insurance Agency (PEIA) and competitive pay. Going into the strike West Virginia teachers made less than their counter parts in all neighboring states, with the 4th lowest pay in the nation and faced rapidly rising health care costs.
Teachers and public employees filled the capitol halls, galleries and legislators’ offices day after day. Their persistence paid off. The strike ended on March 6th, four days before the end of the regular session with a compromise deal between the House of Delegates, Senate and Governor Justice.
Gov. Justice signed House Bill 4145 that provided all state public employees with a five percent pay raise. In an effort to address rising health care costs of PEIA and a projected funding gap of $50 million next year, the governor established a 26-member PEIA taskforce. To be successful in the long-term the taskforce must identify a dedicated revenue stream to fund the program. Increasing the severance tax on natural gas or raising the corporate net income tax are two options to fund PEIA and address the state’s consistent revenue woes should be considered.
A Closer Look at the Bad Bills of 2018
Taking Food Away from People in Deep Poverty– A watered-down version of House Bill 4001 was signed into law by Governor Jim Justice this week. The introduced version of the bill was eerily similar to Senate Bill 60 that was defeated last session thanks to coalition efforts. The initial version of HB 4001 provided a financial incentive for third party vendors to kick West Virginians off of food assistance (SNAP), temporary financial assistance (TANF) and Medicaid. The introduced version also implemented a federal asset test on SNAP recipients, and tied SNAP and Medicaid benefits to child care support. Thanks to a crescendo of voices from coalition partners these items were taken out. However, the final legislation would prevent the state from asking for a waiver to not implement a 20-hour work requirement or three-month time limit on childless unemployed adults, as well as an enhanced verification test. The changes were made after a public hearing in which the vast majority of speakers spoke in opposition to the bill. Coalition opposition to the bill continued with expert testimony as well as a number of reports, blogs, and opinion pieces that pointed out the bill doubles down on a failed policy and will cause harm to our people and economy.
Enacting Special Interest Tax Cuts– Senate Joint Resolution 9 proposed a constitutional amendment to eliminate the business personal property tax for certain industries. SJR9 would have benefitted the coal, natural gas and manufacturing industries while costing the state $140 million annually once fully phased in. It was the state’s latest effort to spur job and economic growth through business tax cuts as well as the most recent attempt to eliminate business personal property tax. The proposal came on the heels of legislators telling the public the state could not afford to pay its teachers more. The SRJ9 price tag was enough to fund an 11 percent teacher pay raise. Academic research largely does not support the claim that state and local business taxes significantly affect economic growth. This piece by WVCBP executive director Ted Boettner notes that these business tax cuts help primarily help out-of-state corporations, not West Virginians.
Reducing Health Care Access– In November 2017, West Virginia Department of Human Health officials announced their intent to follow in the footsteps of neighboring Kentucky and implement harmful and ineffective Medicaid work requirements through a waiver under Section 1115. West Virginia officials backed off the idea of Medicaid work requirements as the law in Kentucky is now being contested in court and pressure continued to mount against the bill from coalition partners. Ensuring people have consistent access to food and health care increases the likelihood of a person finding and maintaining work.
- Limiting Local Government Control– Senate Bill 458 died in the House. The bill would have would have preempted local government by effectively taking away a municipality’s ability to do what is best for its people across a broad range of policies. WVCBP communications director Caitlin Cook notes in this opinion piece passing this bill would end the ability of local mayors, councils, and commissioners to represent their communities’ unique values, views, and needs. They would be powerless to impact local matters like wages, paid sick time, fair scheduling, employment history — even bans on plastic bags.
Holding a Constitutional Convention – Thankfully Pandora’s box was not opened and the Constitutional Convention bill did not advance. House Bill 2114 would set up a slippery slope providing a procedure for West Virginia to select delegates for an Article V Convention to propose amendments to the United States Constitution. The convention process is too broad and states cannot limit the agenda of a Constitutional Convention. The gathering would open up the constitution to whatever amendments were proposed by delegates selected to attend. While proponents argue they can limit the scope of an Article 5 convention, the best legal evidence showsthere are no established ground rules for how this would transpire and it could open up the Constitution to radical and harmful changes.
Passing a Balanced Budget – In a break from the past two legislative sessions, the budget was passed early with little controversy. While every year, the budget undergoes some changes from the governor's proposal to the final product, this year most of the changes to the budget were part of the deal to pass the five percent state employee pay raise. Increased natural gas severance tax collections lead to higher revenues than originally projected, however, state employee pay raises will be paid through budget cuts. Areas that took the largest hits include commerce and tourism.
- Securing Pay Day Lending Protections – An anti-consumer bill, Senate Bill 398, died in the House after passing the in the Senate. This is a repeat of the bill’s fate last year. SB 398 was a copy-cat bill used in other states that would have enabled non-regulated lenders to increase the loan amounts for which they already charge high interest rates. Thousands of West Virginians' hard-earned income already provides a steady stream of income for Wall Street investors in the form of interest payments on their loans. For example, One Main has $192 million in outstanding consumer loans in the state, which they have sold off to Wall Street, just like what used to happen during the mortgage crisis. Additionally, lenders like OneMain note that a high-level of their loans, as high as 60% of their loan volume, is due to repeat reborrowing to existing customers, thus signaling the loans' unaffordability. Allowing them to increase their loan amounts to people already struggling to repay them would pull borrowers more deeply into a dangerous debt trap. Thanks to David McMahon with Mountain State Justice for testifying before the Senate Banking Committee and educating legislators on this bad bill. His efforts have kept this legislation from progressing in the House for the past two sessions. Thanks also to the folks from the Center for Responsible Lending for providing data on the harm this bill would have caused and giving us valuable support.
The nine-day teachers strike helped ensure the following bills that hurt low- and moderate-income families didn’t surface:
- Implementing charter schools
- Introducing education saving accounts
- Allowing school vouchers
- Reducing pay check protection
WVCBP anticipates fighting a number of the above bills during interims and next session.