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Politics, Government, Election

Jim’s Promise Tour Launches

Justice: New roads, new jobs, and hope are on the way

The Free Press WV

Governor kicked off the Jim’s Promise Tour to highlight specific road construction projects that fulfill Governor Justice’s pledge to fix the state’s roads and bring tens of thousands of jobs to the Mountain State.

Justice and Transportation Secretary Tom Smith visited Hurricane, WV to discuss the new work that’s going to occur on I-64 between Hurricane and Milton, and then they went to Clarksburg to give an update on the action happening on local roads in North Central West Virginia.

Transportation Secretary Tom Smith said, “Jim’s Promise Program is historic because it’s the most significant investment West Virginia’s ever seen in its roads and will make such a difference for our state.”

“This is only the start of immediate jobs, immediate opportunity, and immediate hope,” said Governor Justice.  “These road projects that are going on now are just the beginning of West Virginia making a real comeback. It’s the first step to bringing West Virginia the greatness we deserve. Let’s roll!”

Smith added, “In just three months, we’ve already leveraged $350 million worth of work thanks to the Governor’s plan and it’s one and a half times larger than the Obama stimulus spent on West Virginia’s roads. This is just the beginning of a new chapter for West Virginia’s infrastructure. Jim’s Promise means fixing roads in every corner of our state and thousands and thousands of new jobs.”

Trump Is No FDR: Public Electricity Proves it

The Free Press WV

Trump is no FDR, no matter what he claims. To see why, we need look no further than his efforts to dismantle one of FDR’s greatest achievements: public investment in electric power.

I live in the Pacific Northwest, where the Bonneville Power Administration (BPA) sells electricity from 31 federally owned hydroelectric dams along the Columbia River Basin. This publicly-owned utility also operates three-quarters of the Northwest’s high-voltage transmission lines.

Thanks to the BPA, electric rates for Northwest families and entrepreneurs are more affordable than in many other parts of the country. And like many of the New Deal’s public-sector programs –  which successfully lifted this country out of the Great Depression, and still meet the needs of millions of Americans – the BPA is now under attack by the Trump administration.

The Trump budget specifically singles out the BPA for sale and privatization, reasoning that “Ownership of transmission assets is best carried out by the private sector where there are appropriate market and regulatory incentives.”

Selling off the BPA, the budget says, “would encourage a more efficient allocation of economic resources and mitigate risk to taxpayers.”


The New Deal’s Legacy

The BPA owes its existence to Roosevelt’s commitment to federal investment in publicly owned electric infrastructure, one of the New Deal’s most popular programs. This program contained two key elements that directly improve the lives of rural communities:

Rural Electrification

The Rural Electrification Act created a system of low-cost loans that allowed farmers and rural communities to develop member-owned rural electric cooperatives that would build transmission infrastructure. This was necessary because private energy companies were failing to meet the needs of the more geographically dispersed rural populations.

Generating Additional Supply with Publicly Owned Hydropower

In order to generate additional electricity supply, as well as for “development” of water resources, the Roosevelt Administration facilitated building a network of hydro-driven turbines and dams on many rivers. The dams and generating capacity were also tied to a series of publicly-owned electric delivery lines. This system of electricity production and distribution, known as the Power Marketing Administrations, remains in operation today generating approximately 7 percent of U. S. energy supplies.


Keeping the Power On

With respect to the BPA, a bipartisan coalition of Senators is speaking out against the proposed selloff of the publicly owned Power Marketing Administrations. My Representative in the House, Derek Kilmer (D-WA), also understands that privatizing the BPA is a bad idea, as he wrote in an email to constituents.

For decades, the Bonneville Power Administration has provided affordable and reliable power to over 12 million people and businesses. As a guy who worked professionally in economic development, I’ve seen firsthand what that’s meant to the effort to grow jobs in our region. Dismantling the BPA as the Trump administration has proposed would hike up electric bills for homeowners and local employers, and would hurt jobs in the Northwest. That’s why Democrats and Republicans have said that we intend to work for a smarter budget that isn’t built on the backs of local ratepayers.

Trump’s proposed sell off of the BPA contains some very specific, and odd, numbers. Ted Sickinger, of the Oregonian, reports that the Trump budget undervalues the BPA assets compared with industry experts by a huge number: a sale price of $4.9 billion compared with a value of $15.2 billion on the BPA balance sheet.

Energy economist Robert McCullough of Portland told Sickinger the BPA valuation in the Trump budget is “an unheard of low price” and asked the question:

“Why would they discount it below minimum market price out of the chute?” he asked. “Has the negotiation already happened? If it was any other president I wouldn’t fall into this conspiracy, but given what we’ve seen in the first 100 days, I’m far less trusting in common sense than I was when I started.”


Trump’s Budget

In looking for answers to these valid questions, it’s instructive to dig into the details of the budget proposals to understand where the President and his team are headed. it’s also important to remember that President Trump outsourced his budget to right-wing “experts” that stand behind the principles of privatizing public resources to further bolster the super-rich.

The Republican-allied Cato Institute and Heritage Foundation have long called for privatizing the BPA and other public resources. The Republican Study Committee also lists BPA privatization as one of its key proposals. Given these advisors, selling off the BPA for a fraction of its value is a predictable outcome.

It’s not that the BPA and other public energy developments are perfect. Damming rivers is an environmental mess with serious impacts to fish and riparian ecology. Siting and accessibility of resources has been an historical challenge. The BPA has had an often-contentious relationship with our region’s Native American tribes. Still, despite these challenges, the BPA and other public sector infrastructure projects have successfully met the needs of many Americans.


Learning from Our Grandparents

I grew up in an agricultural family in West Missouri in the 1980s. We farmed and worked in a small-town butcher shop that my grandparents owned. My grandparents had direct interactions with “the government,” as we described it, who operated daily meat inspections. While normally not a problem, the sometimes inconsistent and arbitrary manner in which the regulations were applied was a consistent thorn in my Grandpa’s side.

As this was the 1980s, Grandpa and his sons were solid Reagan Republicans, in the small-business mode.

That said, nearly all of the members of my grandparents’ generation spoke with deep reverence about the Democrats of old. West Missouri is Harry Truman country, after all, and the memory of the New Deal and President Roosevelt’s track record for supporting rural communities was still alive and well.

As we move forward with developing the next generation of energy assets, hopefully from wind and solar production feeding an updated energy transmission system, we’ll learn from our grandparents.

We’ll embrace public infrastructure so that affordable, clean energy becomes a reality. And we’ll reject the Trump administration’s pro-privatization agenda that sells off public resources for a pittance.

~~  Bryce Oates ~~

WV Pastor Plans Hunger Strike Against Health-Care Repeal

The West Virginia minister famous for telling a senator how the Affordable Care Act saved her daughter’s life now says she plans a hunger strike to oppose the ACA’s repeal.

Reverend Janice Hill of Parkersburg met with Senator Shelley Moore Capito to testify against the Senate health-care legislation last month. Video of their meeting drew nationwide attention after Hill credited Obamacare with saving her daughter’s life by making sure she got cancer treatment.

Hill now says if and when she knows the repeal bill is to be up for a vote, she’ll start a water-only fast.

The Free Press WV
A West Virginia minister says she’ll do anything she can
- including going on a hunger strike -
to get senators such as Shelley Moore Capito to vote against healthcare legislation.


“When I know it’s going to go for a vote, then I will make my stand,“ he says. “And this isn’t a stunt for me. These are people’s lives, including my daughters.“

The Senate vote has been delayed. Capito has not clearly said if she will vote for or against the bill. If she votes no, most observers expect the repeal to fail.

The Senate bill’s supporters argue the Affordable Care Act offered too much - that it created unsustainable, generous government health-care promises. But many of the act’s insurance rules have been very popular.

Hill says her daughter has a rare form of cancer that is very expensive to treat. She says before Obamacare, her daughter’s insurance company would likely have cut off her coverage because she hit an annual cost cap or because she had a pre-existing condition.

“So the fact that there wasn’t a cap and the fact that there’s not pre-existing conditions really and truly is what’s keeping her alive,“ she explains.

Hill says Capito should vote no, and negotiate with Democrats like Sen. Joe Manchin who want to fix the parts of Obamacare that aren’t working and keep what is.

“Cross that stupid aisle - to be a leader, to be working with Sen. Manchin, and be one West Virginia,“ adds Hill.

Hill and other clergy were to deliver letters and petitions to Capito’s Charleston office Tuesday.

~~  Dan Heyman ~~

Mulvaney’s MAGAnomics Mix of Groundhog Day and Flat Out Lies

The Free Press WV

Office of Management and Budget Director Mick Mulvaney had a Wall Street Journal column highlighting the benefits of “MAGAnomics.” The piece can best be described as a combination of Groundhog Day and outright lies.

In terms of Groundhog Day, we have actually tried MAGAnomics twice before and it didn’t work. We had huge cuts in taxes and regulation under both President Reagan and George W. Bush. In neither case, was there any huge uptick in growth and investment. In fact, the Bush years were striking for the weak growth in the economy and especially the labor market. We saw what was at the time the longest period without net job growth since the Great Depression. And of course, his policy of giving finance free rein gave us the housing bubble and the Great Recession.

The story of the 1980s was somewhat better but hardly follows the MAGAnomics script. The economy did bounce back in 1983, following a steep recession in 1981–1982. That is generally what economies do following steep recessions that were not caused by collapsed asset bubbles. Furthermore, the bounceback was based on increased consumption, not investment as the MAGAnomics folks claim. In fact, investment in the late 1980s fell to extraordinarily low levels. It is also worth pointing out that following both tax cuts, the deficit exploded, just as conventional economics predicts.

By contrast, Clinton raised taxes in 1993 and the economy subsequently soared. It would be silly to attribute the strong growth of the 1990s to the Clinton tax increase; other factors like an IT driven productivity boom and the stock bubble were the key factors, but obviously, the tax increase did not prevent strong growth.

The outright lies part stem from the comparison to prior periods’ growth rates. Mulvaney notes that the 2.0 percent growth rate projected for the next decade is markedly lower than the 3.5 percent rate that we had seen for most of the post-World War II era.This comparison doesn’t make sense.

We are now seeing very slow labor force growth due to the retirement of the baby boom cohort and the fact that the secular rise in the female labor force participation rate is largely at an end. MAGAnomics can do nothing about either of these facts. Slower labor force growth translates into slower overall growth.

Mulvaney also complains about government benefits keeping people from working. The idea that large numbers of people aren’t working because of the generosity of welfare benefits shows a startling degree of ignorance. The United States has the least generous welfare state of any wealthy country, yet we also have among the lowest labor force participation rates. The idea that we will get any substantial boost to the labor force from gutting benefits further is absurd on its face.

Mulvaney apparently missed the fact that energy prices have plummeted in the last three years. Oil had been over $100 a barrel, today it is less than $50. While it is always possible that it could fall still further, any boost to the economy from further declines will be trivial compared to what we have seen already. It would be amazing if Mulvaney was ignorant of the recent path in energy prices.

In short, there is nothing here at all. Mulvaney has given us absolutely zero reason that Trump’s policies will lead to anything other than larger deficits, fewer people with health care, more dangerous workplaces, and a dirtier environment.

~~  Dean Baker ~~

Center for Economic and Policy Research

America Leaves Future Generations with Massive Debts, Obligations

The Free Press WV

The United States is heading down the path to becoming an insurance company with a really big army.

Let’s start with Medicaid.  The most recent report shows that federal and state spending on health care for lower income Americans rose nearly sixteen percent from 2014 to 2016, to $576 billion. Much of the rapid rise is attributable to the Medicaid expansion under Obamacare.

If nothing changes—and we don’t know yet what, if anything, Congress will do—Medicaid spending will approach $1 trillion by 2025.  Congressional Republicans are trying to curb the rise in Medicaid spending, but that’s politically difficult.

Nearly lost in the healthcare debate is a new release on the status of Social Security and Medicare programs. The annual report quantifies the worsening threat to the long-term fiscal soundness of both programs.

“Both Social Security and Medicare will experience cost growth substantially in excess of GDP growth through the mid-2030s due to rapid population aging caused by the large baby-boom generation entering retirement and lower birth rate generations entering employment,” the report said.

That’s the essential problem for all three of the programs; they are growing faster than the economy. If no changes are made, they will swamp the country in debt and generate an even larger drag on the economy.

The report says the combined retirement and disability programs under Social Security are okay for now, but by 2034 the trust funds will be depleted. At that point, benefits will need to be reduced or taxes will have to be raised.

(One additional note: Trust fund is a misnomer. The federal government has already spent that money and replaced it with special treasury bonds that amount to I.O.U.s from Uncle Sam.)

Investor’s Business Daily reports, “Waiting only makes the problem worse.  Putting off fixes would require a payroll tax hike of nearly 4 percentage points or across-the-board benefit cuts of 23 percent.”

Medicare is also in trouble.  The report says the hospital insurance trust fund portion of the program will be depleted in 2029. “At that time, dedicated revenues will be sufficient to pay 88 percent of HI costs.”

Our policy makers have willingly indebted future generations, and Americans have been complicit because we recoil against more taxes, benefit cuts and increases in retirement age—anything we fear will impact our quality of life.

Future generations will not look back fondly on us. They will wonder why, for all the talk from us about wanting a better life for our children and grandchildren, we spent their retirement and burdened them with debt that made it harder for them to achieve their dreams.

Justice Company Debts Damage Governor’s Credibility

The Free Press WV

When it comes to money, Jim Justice is a paradox.

He is incredibly wealthy. Forbes estimates his net worth at nearly $1.6 billion dollars. Justice is often generous with his money.  He saved the historic Greenbrier Resort from imminent closure, protecting hundreds of jobs.  Lord knows how much it cost to rebuild the Old White TPC for the PGA Tour event earlier this month.

Yet Justice can also be miserly. Stories abound of vendors and tax collectors who have had difficulty getting Justice companies to pay their bills.  National Public Radio reported last October, “His mining companies owe $15 million in six states, including property and mineral taxes, state coal severance and withholding taxes, federal income, excise and employment taxes, as well as mine safety penalties, according to county, state and federal records.”

Just last week, the Charleston Gazette-Mail reported that the state Tax Department has four liens against the Justice family owned Tams Management Inc. for nearly $1 million unpaid taxes, mostly coal severance taxes. MetroNews’ Brad McElhinny also reported on the story. 

The Justice family owns and operates dozens of companies.  They employ a lot of people and no doubt write huge checks to governments and vendors.  If I was Justice and I was questioned about taxes, my first response would be, “Do you want to hear how much I do pay?” That has to be a huge number.

We probably wouldn’t hear much about the bill and tax-paying habits of some of Justice’s companies were he not Governor. The court system is kept busy with disputes over debts, while private business owners often have issues with the state tax department or the IRS over tax liabilities.

However, Justice is a public figure now, so the additional scrutiny should be expected.  But more importantly, the still-new Governor’s credibility is damaged by the tax debts.  The political juxtaposition is too obvious to ignore: How can he ask West Virginians to pay additional taxes or criticize the Legislature for not putting more money toward drug treatment when his companies have outstanding tax liabilities?

That’s a trump card too easy for his critics to play.  Just last week Senate President Mitch Carmichael, who was in a tiff with the Governor over planned upgrades to eight Capitol bathrooms, said, “Pay your taxes–$4.5 million in taxes for drug treatment.”

Ask people who know Justice why he has a history of foot-dragging on his bills and they say the same thing; they don’t know, but naturally there is speculation.

Perhaps he has cash flow problems, especially given the difficulties in the coal industry and the expense of keeping the Greenbrier open and operating. Or maybe it’s just a way of doing business; hold back on payment and then settle for a lesser amount on the dollar.

Yes, since becoming Governor Justice has turned his companies’ operations over to others, but these payment issues will continue to be linked to him, especially if they are nonpayment of state taxes or fees.  They erode his ability to ask other West Virginians to do their fair share.

What the Gutting of Sears Tells Us About America

The Free Press WV

Sears is fading. Fast. The 124-year-old retailer — the place where all America once shopped — is tumbling into a shopping horror.

At some Sears stores, recent news accounts report, ceilings are collapsing, rats are racing, and toilets aren’t working “for weeks on end.” Job cutbacks and a decade of under-investment have left store shelves bare — and customers on their own.

“You could fire a cannon in any direction and not hit one salesperson,” Michael Looney, a former Sears employee in California, recently told Business Insider.


Lampert’s Way

Meanwhile, the hedge-fund billionaire who’s been running Sears the last dozen years is keeping up a brave front. Eddie Lampert is sticking to his story that Sears is wondrously transforming itself into a “member”-oriented retailer for the online age.

But business analysts have been ridiculing these claims ever since Lampert started making them. They see the Ayn Rand acolyte as an ideologue who’s left Sears “ravaged by infighting.” In 2014, one business media survey found that Lampert had more negative ratings from employees than any other major top exec in America.

By standard bottom-line yardsticks, Lampert’s reign at Sears has been one of the biggest disasters in modern business history. Between 2011 and 2016, the giant retailer’s revenues plummeted by almost half. The company lost $8.2 billion over that span. Over the last decade, meanwhile, Sears stock price has sunk from nearly $200 per share to under $10.

Lampert’s colossal failure at Sears, some observers believe, simply reflects a broader trend, the epochal economic shift from bricks-and-mortar to online retail. Few major enterprises built for success in one business epoch, the argument goes, have ever been able to prosper in another.

But Sears as an enterprise has, ironically, already pulled off an epochal transformation. That epochal shift came in the middle of the 20th century under Robert E. Wood, the West Point-trained, former Army general who led Sears from just before the Great Depression into the 1950s.


What Wood Would Do

Wood understood early on that the automobile had changed the retail landscape. Before the auto age, average Americans had shopped by mail-order catalog, a retail category Sears dominated. With cars a mass phenomenon, Wood realized, shoppers could now drive to shop. The future belonged to general merchandise department stores, and Sears, under Wood, would open up hundreds of them. By Wood’s 1954 retirement, Sears towered over American retail.

Why did Wood succeed where Lampert fails? Sheer genius on Wood’s part? Hardly. The more important factor: Wood understood a basic element of enterprise effectiveness. Successful enterprises share, he believed, both credit and rewards.

Wood didn’t prance about Sears as a self-styled savior. Nor did he tolerate pomposity from anyone else in Sears management. During Wood’s tenure, editors at the Sears employee newspaper regularly ran articles that irreverently teased top Sears execs.

Sears execs would also receive no special perks. Seniority at Sears, not corporate rank, determined benefits like vacation and sick days. General Wood also kept management salaries below their level at other retailers. Wood wanted Sears known as the “workingman’s friend.”

The Sears profit-sharing plan bolstered that reputation. The plan applied to Sears workers who stuck with the company more than a year. Those who worked 15 years would see the company put into the “Savings and Profit Sharing Pension Fund of Sears, Roebuck and Co.” a sum that equaled five times the employee contribution.

These dollars would be invested in various assets, mostly Sears stock, and the assets would pay dividends than went to profit-sharing participants. Veteran employees would routinely receive more from profit-sharing payouts than their wages. Janitors making $40 a week could waltz into retirement with $2,500 in savings.

During Wood’s tenure, current and retired Sears employees would end up holding a third of the company’s shares, the highest employee-share percentage anywhere in Corporate America.

What explains Wood’s readiness to share? Did he grow up in abject poverty? Did he come from a family of progressive political activists? None of the above.

Wood had a conventional, conservative business political outlook. By 1938, he had emerged as a strong critic of Franklin Roosevelt’s New Deal. After World War II, he moved into America’s right-wing fringes.


Unions and Taxes Matter

So why did this right-winger share the wealth at Sears? He had little choice. Robert E. Wood operated in an America where two major institutions — the tax system and the labor market — were combining to make a sharing of sorts the national default.

The federal income tax throughout the mid-century Sears golden years subjected individual income over $200,000 to a tax rate that hovered around 90 percent. That left top executives like Wood with little incentive to feather their own nests. Why bother? They had little personally to gain from squeezing workers or cooking corporate books.

Trade unions, meanwhile, dominated the labor market. In major metro areas outside the South, most private-sector workers carried union cards. But not at Sears. Unions in the mid-century United States represented less than 8 percent of the Sears domestic workforce.

Wood liked things that way. He kept unions away, notes historian James Worthy, by having Sears match the gains unions at other companies were bargaining to win. Sears offered life and health insurance, sick pay, vacations, and separation allowances “long before they became common practice in American industry.”

Sears would be an outlier in the nonunion private sector. Few nonunion concerns worked as hard as Sears to provide economic security to their employees. But most all major nonunion companies — outside the South — made some effort to ratchet up worker pay and benefits. With unions representing such a significant share of the workforce, nonunion concerns had to try to approximate union-level wages and fringes or go without workers.

The result? The bottom 90 percent of American families would see their incomes soar in the post-war years, from a $10,513 average — in current dollars — in 1940 to $20,036 in 1950 to $26,665 in 1960.


Fast Forward

Sears chief Eddie Lampert, by contrast, is operating today in an entirely different economic environment. In huge swatches of the private sector, unions have no presence at all. Lampert has been able to shortchange workers left and right and not worry about any consequences.

And the tax system? The top federal tax rate on income has, over the past three decades, bounced around between 28 and 39.6 percent, less than half the top rate that Wood faced.

In other words, power suits like Lampert can keep, after taxes, the vast bulk of whatever income they can grab. That gives them a powerful incentive to grab, by any means necessary, as much as they can. Lampert has been free, in effect, to run Sears into the ground — and enrich himself in the process.

The most arrogant instance of this enriching? Two years ago, with Sears already on the ropes, Lampert and the hedge fund he also runs created a real-estate investment trust, then engineered a deal that had Sears sell to the trust over 200 of its best brick-and-mortar stores.

Lampert’s real-estate trust then rented space in the stores back to Sears, retaining the right to rent to other retailers as well. The deal guaranteed Lampert’s trust $135 million in rent money the first year and 2 percent annual hikes starting in the second.

Sears does get to cut the lease short on stores that prove “unprofitable,” but only if the Lampert-run retailer pays the Lampert-run trust an extra year’s rent and a year’s worth of operating expenses.

This maneuvering understandably outraged a good many Sears shareholders. They subsequently filed a lawsuit charging that Lampert was stripping Sears of its most valuable assets for his own personal gain.

The Lampert-friendly Sears board of directors vigorously denied that charge, then, this past February, agreed to pay out $40 million to settle the shareholder lawsuit.

Various other shifty moves have left Lampert well-positioned to survive any Sears bankruptcy and continue his lush luxury life. Should Sears go under, Lampert figures to be able to spend more time at his $40-million waterfront getaway on South Florida’s ultra-exclusive Indian Creek Island, a 32-home enclave that has its own mayor and full-time police force.


The Trump Connection

Eddie Lampert, living large at the expense of hard-working men and women of modest means, may just personify almost everything wrong with the modern American economy. He seems like just the kind of “swamp” creature Donald Trump once railed against.

But Eddie Lampert isn’t worrying about anybody draining his particular chunk of swampland, and he has some excellent reasons to feel confident.

Here’s one: Trump Treasury Secretary Steve Mnuchin didn’t just room with Lampert at Yale and didn’t just get his wheeling and dealing start in life, like Lampert, as a mover and shaker at Goldman Sachs. Mnuchin, before stepping down this past December to join the Trump cabinet, had spent the last 12 years sitting on the Sears board of directors.

~~  Sam Pizzigati ~~

U.S. Stock Market Soars While WV Sputters

The Free Press WV

Following the news that the Dow Jones Industrial Average reached a new high and the stock market is surging, Governor Jim Justice issued the following statement:

“Wall Street is booming and the people of West Virginia aren’t sharing in the boom because our state Legislature refused to support the economic development tools I proposed. The Legislature said NO to the Save Our State fund to attract new businesses here, rejected any new money to promote tourism, and slashed prospects for a prepared workforce — all which would bring some of this national prosperity home to us in West Virginia.  While the rest of the country is on a tremendous rocket ride, West Virginia has hit rock bottom thanks to the Legislature.

“Until the Legislature can learn to think big, like I do, we’ll never see the economic comeback the people of West Virginia deserve. I hope and pray to the Good Lord that we all see the wisdom to vote ‘YES’ on the road bond in October to create tens of thousands of jobs as part of our road building program.

“I just got here, but the lack of progress from the Legislature and this terrible situation has been years in the making.”​

Justice Was Right, Revenue Collections Way Off Mark

June revenue numbers are $18.7 million below estimate

The Free Press WV

The Governor’s office reported final General Revenue Fund collection numbers for Fiscal Year 2017 were $120.7 million below original estimates. Several gap-filling measures, including taking $40.4 million from the Rainy Day Fund, effectively closed the revenue shortfall for the year.

The Governor’s chief of staff, Nick Casey, highlighted that the Legislature presumed there would be $11 million in surplus from FY17 to be used in the Fiscal Year 2018 which began on July 1.  There was no such surplus but this $11 million in fake money was inserted in the state budget by the Legislature. Casey noted that the $11 million in hocus pocus money has to be made up from cost cuts somewhere such as fall trout stockings, volunteer firefighters, DHHR or fairs and festivals.

“Thank goodness that Governor Justice accurately predicted that West Virginia’s severance tax revenue would continue to increase,” said Nick Casey, the Governor’s chief of staff. “Coal and gas severance taxes are the only real bright spots and have been up in March, April, May and June. Increase in severance tax is coming to pass just like the Governor said it would in his State of the State address.”

Casey continued, “The people of West Virginia are getting hurt unnecessarily due to the cuts the Legislature made in the Governor’s proposed budget. The taxpayers must know that their lawmakers could’ve stopped this pain but they turned their backs on the Governor’s budget. West Virginia is only on the move because of the Governor’s road bills and his vision on severance tax even though he has had to drag a do-nothing Legislature along for the ride.”

The anticipated revenue gap for FY17 was originally projected to be as high as $192.2 million, but the combination of one-time special revenues along with mid-year budget reductions of nearly $60 million closed that gap and a raid on the rainy day fund and the increases in severance tax the Governor predicted not only filled the gap but resulted in a year end surplus of roughly $63.2 million.  The final number will be known at the end of July when the accounting books close for state agencies.

Half of the year-end surplus will be transferred to the Rainy Day Fund and the remaining half will be available for appropriation in FY18.  The FY18 General Revenue Fund Budget is dependent on more than $41 million of available net surplus funds at the end of FY17 but that number will be roughly $11 million short.

June General Revenue Fund collections of nearly $424.7 million were $18.7 million below estimate but 6.6 percent ahead of prior year receipts.

Highlights of the major revenue components accounting for nearly all revenue collections include:

  • June General Revenue Fund Personal Income Tax collections fell short of estimate by $31.9 million.

  • Consumer Sales and Use Tax receipts, after a 6.2 percent boost in May, rose 5.7 percent above last June. Collections also exceeded the monthly estimate by $3.7 million. Cumulative adjusted collections were up from prior year receipts by just 0.1 percent with recent gains offset by significant declines occurring in the months of July (June sales) and January (December sales). The FY17 deficit in General Revenue Fund sales tax collections was $62.7 million with nearly 80 percent of the shortfall attributable to July and January collections.

  • General Revenue Fund Severance Tax collections totaled more than $321.0 million in FY17, an amount that was $58.5 million above estimate and 16 percent higher than prior year receipts. June General Revenue Fund Severance tax collections of $47 million were nearly $18.9 million above estimate. As of May, total state and local severance tax collections for the fiscal year-to-date were up more than 20 percent from last year. Coal severance tax receipts were up 6.9 percent to $209.6 million. Natural gas severance tax receipts were up 59 percent to $97.6 million and oil severance tax receipts were up nearly 48 percent to $12.6 million.

  • Tobacco Product Excise Tax collections totaled $194.6 million for the year. Collections were $1.6 million below estimate and 94 percent above prior year receipts. The revenue gain from prior year was attributable to an increase in tobacco tax rates including an increase in the cigarette excise tax rate from 55 cents per pack to $1.20 per pack, an increase in the other tobacco products tax rate from 7 percent of wholesale price to 12 percent of wholesale price and the imposition of tax on e-cigarette liquids. June collections of $16.9 million were more than $0.9 million above estimate.​

Justice Calls Bullsnot on Politicians for Spending Money on Private Capitol Bathrooms

Governor says state Senate spending on new bathrooms should go to drug treatment

The Free Press WV

Governor Jim Justice is shining a spotlight on the state Senate’s request to spend taxpayer money to upgrade their private bathroom facilities.

Justice says the Senate should use the allocated bathroom money to fund drug treatment centers.

“Based on how poorly the Legislature did this past year, the taxpayers shouldn’t pay them for a new outhouse— much less a new luxury bathroom,” said Governor Justice. “We’ve got schools with bathrooms that don’t work and these politicians want the taxpayers to pay for gold-plated toilets? You’ve got to be kidding me.”

Justice added, “Since the Legislature passed a budget that hurt West Virginia families, there is no way they should reward themselves with new amenities in the Capitol, like a special politicians’ bathroom. When they cut the legs out from underneath our people, they should not be rewarded with a spending spree.”

Justice concluded, “I’m new to the political process, but is this what they mean by ‘live within your means’? If the facilities are so bad for our lawmakers, I’m happy to get them an outhouse delivered to the Capitol grounds.”

Warner: ‘No Intention’ Of Sharing WV Voter Data

The Free Press WV

West Virginia Secretary of State Mac Warner has no intention of releasing personal information of West Virginia voters to a White House commission investigating President Donald Trump’s allegations of voter fraud, a spokesman said.

Warner’s office received a request from the commission on July 3 requesting voter information as a part of the investigation, said Michael Queen, Warner’s deputy chief of staff for external affairs and director of communications.
Warner, a Republican, has been consulting with legal counsel and Republican West Virginia Attorney General Patrick Morrisey before responding to the commission’s request, and he’s expected to make a decision Wednesday or Thursday, Queen said Monday.

“We’re not going to do anything that would cause West Virginia voters to lose confidence in our ability to provide fair and fraud-free elections,” Queen said.

Queen said names and addresses that the office routinely releases to candidates, political parties and grassroots organizations may still have to be made available to the public.

At least 16 other states and the District of Columbia have said they will refuse to provide the information sought by the commission. The other states are undecided or will provide some of the data, according to a tally of every state by The Associated Press.

The White House commission investigating President Donald Trump’s allegations of voter fraud and heightened concern about Russian attempts to interfere in U.S. elections requested data from all 50 states starting late last month.

The Department of Homeland Security said last fall that hackers believed to be Russian agents targeted voter registration systems in more than 20 states. And a leaked National Security Agency document from May said Russian military intelligence had attempted to hack into voter registration software used in eight states.

Queen said Monday that Warner and his staff take the care of voter registration and voter files as a serious matter.
“We believe that the West Virginia State Code protects Secretary Warner from having to release Social Security numbers, phone numbers, email addresses, driver’s license numbers and other personal information,” Queen said.

Trump has repeatedly stated without proof that he believes millions of fraudulent ballots were cast in the November election, when he carried the Electoral College but lost the popular vote to Democrat Hillary Clinton.

The commission was launched to investigate those claims and is being chaired by Vice President Mike Pence and Kansas Secretary of State Kris Kobach, who sent the information requests.

“I do think that this is an odd time to be forming a national database of some kind if we’re so concerned about security,” said Connecticut Secretary of State Denise Merrill, a Democrat.

The U.S. does not have a federalized voting system, relying instead on 9,000 different voting jurisdictions and more than 185,000 individual precincts. Officials believe that makes it difficult for hackers to have any major effect on the vote. If Kobach succeeds in obtaining the information he seeks, it could gather voter data for the entire U.S. in one centralized place.

JUSTICE SPEAKS WITH DEVOS ABOUT FEDERAL GRANT PROBLEMS AT WVU, WVSU

Discussion centers around loss of program funding due to minor clerical errors in applications

The Free Press WV

Governor Jim Justice spoke with U.S. Secretary of Education Betsy DeVos on Tuesday about the loss of federal funding for scholarship programs at West Virginia University and West Virginia State University that serve low-income students in undergraduate and graduate programs at those two institutions.

Both WVU and WVSU had minor clerical errors in their applications and were denied federal dollars they both have received for several years. WVU’s oversight totaled $2 and now puts at risk more than $200,000 for its McNair Scholars program. WVSU made a $104 mistake that will cost it funding in excess of $500,000 for its Upward Bound program. Officials at both institutions have said that if the decisions stand both programs will be eliminated.

“Obviously these programs at WVU and WVSU have been successful and productive for many years and to see small mistakes on an application jeopardize these programs for our neediest students is disheartening,“ said Governor Justice. “I urged Secretary DeVos to try and work this out and I am certain she understands what is at stake here for our West Virginia students.“

“Since the State Legislature whacked our higher education institutions with significant budget cuts this just compounds the problem,“ Governor Justice said. “This irresponsibility by our State Legislators could lead to more unnecessary pain.“

“We want to make sure we do everything possible to keep these programs up and running smoothly,“ Governor Justice added. “They are far too important to be eliminated, especially due to a small, unintentional human error.“

At WVU, the McNair Scholars program has been in existence for 18 years and annually pairs 25 low-income and first generation college students, with a professor in their field of study, to assist them in pursuing graduate school and/or a doctoral degree.

WVSU has operated the Upward Bound program for more than 50 years. It assists low-income and first generation students in secondary schools by allowing them to take classes earning free college credits and establishing a pathway to attend college upon graduation from high school.

Manchin Embracing 2018 Challenge

The Free Press WV

When asked about what is expected to be a brutal 2018 re-election battle, a wide smile spread over Joe Manchin’s face.  “I love campaigning,” Manchin said, showing no hint of sarcasm or falsity.

The West Virginia Democrat is a relentless retail campaigner, perhaps the best the state has seen since Arch Moore.  Manchin can talk policy, but he’s hardly a wonk.  His strengths are personality and likeability, which still make a difference in the minds of voters.

His 2018 re-election effort, however, will provide one of the biggest tests of his political career.

Since arriving in Washington, Manchin has sought to avoid the extreme partisanship that forces elected officials into camps with hard boundaries. The middle ground is his preferred space, which he seeks to reinforce at every opportunity.

The Great Middle, once the safe zone for many politicians, is now a political no-man’s land. The country and its leaders have migrated away from each other to areas where the ideology is more rigid and, more importantly, the generous donors abound.

The middle ground leaves Manchin with problems on his flanks.  Paula Jean Swearengin, who is backed by Brand New Congress, an organization founded by former Bernie Sanders supporters, is challenging him in the Primary Election next year.

Manchin has always had issues with the more liberal wing of the Democratic Party in West Virginia, but other than his 1996 loss to Charlotte Pritt in the Democratic Primary for Governor, Manchin has been able to avoid a first round defeat.

The real challenge for Manchin will come in the General Election.  Two Republicans are already in the race—3rd District Congressman Evan Jenkins and former coal miner Bo Copley, who famously confronted Hillary Clinton to explain her comments about putting coal out of business.  West Virginia Attorney General Patrick Morrisey is also expected to enter the race.

All three are part of the conservative Republican wave that has swept over West Virginia in the last generation.  The state has voted for the Republican nominee for President every election since 2000 and Donald Trump beat Hillary Clinton by 42 points last November.

Manchin strongly supported Clinton, but he quickly embraced Trump after the election and was even briefly considered for a position within the administration. He has tried to set himself up as a potential bridge in Congress between Democrats and Republicans.

In my conversation with him last week, Manchin dismissed the expected opposition attacks linking him to Clinton, noting that opponent attempts to connect him at the hip with Barack Obama didn’t work.  Those failed efforts give him confidence that his personal brand is strong enough to withstand the hyper-partisan antagonists.

“My brand is to be Joe Manchin—common sense, centrist,” he told me on Talkline last week.

The Cook Political Report agrees, rating Manchin as “likely” to hold the seat.  But to do so, Manchin has to buck the trend in West Virginia, and that’s still new territory for Democrats here.

Graceless President Betrays Nation’s Heritage

The Free Press WV

For leaders as well as friends, spouses and colleagues, grace is a precious characteristic. Whatever one thinks of Donald Trump’s policy choices, our nation has never had a president more lacking in grace.

Whether or not Abraham Lincoln was the greatest American president, he was certainly its most gracious. Here’s the close of his brief Second Inaugural, delivered toward the end of the Civil War, when the nation was a house divided:

“With malice toward none, with charity for all, with firmness in the right as God gives us to see the right, let us strive on to finish the work we are in, to bind up the nation’s wounds, to care for him who shall have borne the battle and for his widow and his orphan, to do all which may achieve and cherish a just and lasting peace among ourselves and with all nations.“

On the eve of victory, Lincoln avoided triumphalism or crowing. Instead he rejected malice and called for charity. He backed his firmness with both humility (“as God gives us to see the right”) and tenderness (“to care for him who shall have borne the battle”).

Ronald Reagan was usually a model of grace, with a strong preference for gentle humor and a touch of indirection. Asked at 73 if he was too old to be president, Reagan responded: “I will not make age an issue of this campaign. I am not going to exploit, for political purposes, my opponent’s youth and inexperience.“

At critical moments, Reagan chose understatement and humility, which are part and parcel of grace. A former Democrat, he liked to say, “I didn’t leave the Democratic Party, the Democratic Party left me.“ In his final speech at a Republican convention, in 1988, he began: “[B]eing only human, there’s a part of me that would like to take credit for what we’ve achieved. But tonight, before we do anything else, let us remember that tribute really belongs to the 245 million citizens who make up the greatest – and the first – three words in our Constitution: ‘We the People.‘ “

In any competitive activity, gracious losers are easy to identify: They give credit to their opponent and never make excuses or blame referees. Because vanquished opponents (and their supporters) often feel horrible, it’s even more important to be a gracious winner, showing respect and admiration after victory, and emphasizing that things could have gone the other way.

Grace breeds reciprocity. If a friend, a colleague or a spouse is gracious to you, you feel like a creep if you don’t respond in kind. That’s one reason that Reagan was such an effective debater: He disarmed his opponents. Reagan’s grace also helped him to work with committed political adversaries, most notably House Speaker Tip O’Neill.

Gracelessness shows bad character, but it is also an obstacle to success and often a recipe for failure. Humiliating people is a terrific way to reduce the likelihood of cooperation. Graceless leaders produce graceless followers and graceless opponents. Gracelessness is stupid, because those who lack grace inflame their adversaries – and turn potential friends into enemies.

Gracelessness is an absence of grace, but the English language lacks a word for the opposite of grace. One candidate is “ugliness”; another is “cruelty.“ Every human heart is drawn, on occasion, to what is ugly and cruel, and even rejoices in them. Prominent Democrats are fully capable of displaying both. Of course, politics is a dirty business, and, as both Lincoln and Reagan knew, you sometimes have to hit back.

But in modern history, no White House has ever been more graceless. Put political differences to one side. That’s a betrayal of our nation’s heritage, and an insult to our deepest traditions.

~~  Cass R. Sunstein ~~

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