Three big ideas new Gov. Jim Justice has advanced in the past week
By Brad McElhinny, WV MetroNews
CHARLESTON, W.Va. — In comments and tidbits during appearances around West Virginia, new Gov. Jim Justice has offered insight about how his administration might proceed when the legislative session really gets going next week.
Justice’s inaugural address Jan. 16 offered the first opportunity in his new role as governor to lay out ideas about issues like the state budget and education.
Traditionally, the governor’s State of the State address — which in Justice’s case will be Feb. 8 — is the governor’s opportunity to recommend legislation and give an accounting of the budget to the Legislature. In other words, it’s the governor’s shot at laying out his plans in front of both houses of the Legislature.
In between, Justice has been making public appearances in West Virginia communities, offering glimmers of his approach.
Here’s the size-up based on what we know so far:
Justice is making no bones about this. It’s going to be bad. Really bad.
The budget hole for the coming fiscal year is already estimated to be $500 million. By 2019, Justice and his administration are already projecting it to be more than $700 million, according to remarks Justice made last Wednesday during an appearance before lawmakers and business owners at the Beckley-Raleigh County Chamber of Commerce’s legislative luncheon.
“First and foremost, the depression is beyond belief,” Justice told attendees, according to coverage by the Register-Herald newspaper. “That’s where we are, like it or not. We may have bright spots right here in Beckley, but there are so many black holes that are just unbelievable.”
Pockets of the state’s economy could be so bad, Justice uses a vivid metaphor about a patient spurting blood to describe it.
“It’s going to take a while,” Justice said. “It’s going to take a while. There are opportunities in agriculture, opportunities in tourism. All of these will take a while. We have a patient laying there and blood is shooting to the ceiling. All in the world we can do is trim the toenails. Blood is shooting to the ceiling. We’ve got to do something.”
He said recent approaches to dealing with the problem — like dipping into the state’s Rainy Day Fund — will no longer work.
“Here’s the problem,” Justice said in Beckley. “Many of the low hanging fruit, we’ve already taken. The other thing we’ve done is we’ve taken $400 million out of the Rainy Day Fund and it only had $1 billion in it. … If we deplete the Rainy Day Fund significantly lower than it is, then you’re absolutely going to screw up your bond rating. You’re going to screw up everything. All your lending is going to go haywire.”
Some cuts to state government remain desirable, Justice said during his remarks in Beckley.
“There are agencies in government that have money and there are agencies in government that are so blooming wasteful that it’s just unbelievable,” he said. “People are running government wrong. We’ve got to glean off all that we can glean off, then address what in the world we are going to do. Are we going to raise revenue? Are we going to do whatever we’ve got to do? It is dire, dire, dire. It is really bad. I don’t mean kind of bad. It is really bad.”
But he followed up by saying broad, across-the-board cuts could be painful and ineffective.
“Do you realize what you would have to do to get where you need to be? You would have to cut people across the board 10 percent,” Justice said. “It would be an astronomical undertaking … if we continue to do what we’ve done in the past and look at approaches to fixing it like we have in the past, then we’re dead. We are. For real. I’m telling you, we’ve got to have new ideas.”
Justice mentioned the need for new revenue during his remarks in Beckley, but it’s not clear if that refers to tax increases or economic growth that would broaden the tax base.
If nothing is done, Justice said, “in a very short order, we will run out of money. People better realize that there is only one way and that is new ideas. We may have to bite the bullet and have revenue raises in certain areas, but if you look at it through my eyes, it’s just a challenge that I really believe we can do. If you look at it through the eyes of the past, then we’re dead but I’m very optimistic.”
On MetroNews’ “Talkline” with Hoppy Kercheval on Friday, Senate President Mitch Carmichael said that if Justice is talking about making the hard choices to decrease government spending, then the Republican majorities in the Legislature will offer support.
“I’ve had enough meetings with the governor to know he is absolutely considering all the elements necessary to balance the state budget,” Carmichael said. “Primary among those is bringing our expenditures in line with our current revenue stream.”
Carmichael said previous elected officials have made too many promises that now can’t be sustained in tough economic times.
“We’re going to be strong. We’re going to do the things you have to do to bring expenses in line with revenue,” Carmichael said on “Talkline.” “We have to cut state government.”
Carmichael said of Justice, “We will stand with you. We’re not going to be a Legislature that says ‘You get out on front with this and we won’t be there with you.’ We know these cuts have to be made.”
In his inaugural address and in his remarks in Beckley, Justice talked about gathering $225 million in state money and leveraging it on Wall Street, somehow coming out with about $1.6 billion that could be spent on infrastructure.
“If I had this, had that obligation, we could put into a financial instrument to take over as a bond or sold it directly to Wall Street and let them present a value and give me a check, they will give us a check for $1.6 billion,” he said in Beckley.
“We’ve got to do it while interest rates are low. We will take that $1.6 billion and marry that with the federal matching dollars. If we do that on a 2-1 basis, I think it takes $3.3 billion to do every highway project on the books today — every one of them.”
What Justice has not yet said is where the initial $225 million would come from, the nature of the bond — and the potential debt load that would result — and the whens and wheres of his infrastructure ideas.
At his inauguration and then in Beckley, Justice also promoted a tiered tax system for natural resources. He said a greater share of severance tax should be paid in good times, and a smaller share in bad times.
“The coal operators have lost so much money. That’s bad for people, bad for companies, bad for stockholders,” he said in Beckley. “There have been bankruptcies declared. It’s catastrophic, but if you look to the future to a good day, a day when we hope coal is selling for $150 to $200 a ton, it gets to those levels, instead of 5 percent, you pay 10 percent and at that level, you’re bringing the state hundreds and hundreds of millions of dollars.
“In so many ways, West Virginia has become like a third-world country,” Justice later said. “Our resources, whether timber, oil, gas – our resources have left and we still remain 50th. I don’t want that. I don’t want to hurt our companies. I want to stand with them and help them when things are bad but as things get phenomenally good, they need to contribute to us in climbing out of this hole.”
In his inaugural address. Justice displayed a blue folder, said it contains his education plan and vowed to release it immediately. He described it as a pathway to eliminating unnecessary agencies, to putting more control in local communities and to paying teachers more.
He hasn’t yet released a full education plan but has elaborated on what he said earlier.
In Beckley, he said his plans for streamlining involve the state Department of Education and the Regional Education Service Agencies, eight centralized offices that provide training and resources to county school systems.
“I’m talking about the state Education Department, RESAs, all agencies everywhere, putting education back into local hands,” Justice said, as reported by the Register-Herald. “I stood at inauguration and said I had a plan. All I’m doing with that plan is circulating it very cautiously internally.”
During an appearance in Bridgeport before the West Virginia Association of School Administrators winter conference, Justice reiterated his dislike for the A through F grading system for state schools that just made its debut last fall.
Justice in Bridgeport said he would replace the state’s Smarter Balanced standardized test, which weighs heavily in the A through F system, with the ACT. The state Board of Education is already considering moving away from Smarter Balanced, believing students have little incentive because the test doesn’t affect final grades or college readiness assessments.
“Not only would students be preparing for a test they take if they are college-bound, but they will take this much more serious than the state assessment,” Justice said at the association of school administrators. “We are testing these students so much that they are going through the motions with their heads down and not trying.”
Justice, who named three new members to the state school board last week, is already looking ahead to the anticipated June 30 departure of state Superintendent of Schools Michael Martirano.
Martirano, who announced his planned departure last fall because of family concerns, recently has described soul searching, although he hasn’t withdrawn his resignation.
As reported by the Exponent-Telegram in Clarksburg, Justice said Martirano’s replacement should advocate for more local control of school systems.
“An ideal candidate would share the same ideals — wanting to listen locally and put more control back into the hands of the local school systems,” Justice said.