Thank you for the opportunity to respond to what I believe is the most important issue that we have in West Virginia.

Let me start by saying that no government of any kind has ever taxed its way to prosperity.  I repeat, ever!  So what can West Virginia’s elected officials do to improve the plight of the West Virginia worker?

There are multiple answers to this question…

Fix the Constitution:  The West Virginia Constitution is a huge hindrance.  We must remember that our constitution is a direct result of the Great Depression era.  Our constitution erects barriers that are difficult to overcome legislatively.  For instance, the current tax reduction efforts will do little to attract business.  The recent reductions will be instituted too slowly to have any real impact on future businesses looking to locate in West Virginia.  (Business has what’s called a “ten year cost of doing business assessment plan,” which takes into account the slowness of the changes and the potential that these changes could easily be reversed by the legislature.)  Our constitution forces the legislature to use flawed methods to avoid constitutional violations.  Methods like tax credits, rebates, and purchase/lease agreements to avoid personal property taxes on manufacturing equipment and machinery.  These avoidance methods are creative but have very little impact on job creation. 

Our economic development authorities are also handicapped and their funding would be better spent on true tax relief.  (Remember, the ten year plan.)  In essence, recent legislative tax changes will have little effect on job creation.  We must give true tax relief to existing West Virginia businesses as well as those locating here.

As a side bar, the best way to increase West Virginian’s average salary is to place a greater demand on the overall West Virginia work force.  The Eastern Panhandle is a good example.  Employees who work at convenience stores make on average $10-12 per hour, where in many other parts of West Virginia these wages are much lower.  The same applies to all sectors of the work force…it’s all about supply and demand.

While I’m referencing the Eastern Panhandle, it would serve the rest of West Virginia well to use the Eastern Panhandle as an “economic barometer.”  West Virginia’s tax structure has done an excellent job of preventing businesses from locating here.  Manufacturing jobs are located just across our state line in Virginia, Maryland and Pennsylvania.  Simply stated, “The Eastern Panhandle is a bedroom community for our surrounding states with few job opportunities within our borders.”

Next issue, our Tort Laws.  Our judicial system is sending out negative signals to Corporate America.  Non-Partisan or Merit Selection of judges should have occurred decades ago.  Our state is perceived by the corporate world as a judicial hell hole.  That image needs to be changed! 

The residents of our state will also have to change the collective mindset of the lottery mentality when it comes to being rendered “whole” pertaining to punitive awards.  The West Virginia Attorney General also should be reined in from trolling the corporate waters for large, lucrative settlements.  I’m all in favor of holding bad corporate players accountable, but the West Virginia Attorney General’s efforts have hurt the average West Virginia worker where it hurts most - right in their pocketbook.  All forms of justice must maintain a degree of balance and fairness.

Finally, it’s said all the time, “You want to cut taxes, but how are you going to replace lost revenues?”  Again, the answer is quite simple:  Reduce government and spend taxpayer dollars wisely.

Government is West Virginia’s largest employer, while the population has remained basically static since 1940.  Do you see the correlation?  Real taxable wealth comes from manufacturing jobs, that is raw materials turned into marketable products and this includes “energy”.  State agencies must operate with greater efficiency, just like “surviving” West Virginia businesses currently do.

Now, let’s segue way into Prevailing Wage.  Prevailing wage is calculated county by county on all government works projects such as roads, bridges, water lines, sewer lines, school buildings, government buildings, libraries …. anything that may have tax dollar funding.  Statistics show that on average, the Prevailing Wage adds an additional 30% percent to the overall cost of these projects.

West Virginia already has the highest per mile highway cost because of terrain.  Eliminating the Prevailing Wage would produce a combined expected yearly savings exceeding $300 million.  Take $150 million and eliminate the business Franchise Tax, reduce the Corporate Net to 6.5%, eliminate the inventory tax and eliminate the personal property tax on manufacturing equipment and machinery. 

Take the other $150 million and increase state employee and teachers’ wages.  It’s incomprehensible to me that the state would pay thirty (30%) percent more for these projects when over half of those receiving these artificially high wages live outside of our state.  We need to pay our resident employees better wages first.

West Virginia will continue to have budget surpluses as long as the price of crude remains over $60 dollars a barrel and I think that will continue into the foreseeable future.  The Severance Tax on coal, oil and gas makes this possible.  Currently the Rainy Day Funds A & B have balances over $650 million.  I applaud the Governor for maintaining a ten (10%) reserve which in effect improves bond ratings and saves on interest, thus freeing up greater tax dollars. 

However, these funds are at fourteen (14%) percent.  These excess funds are job opportunities wasted.  Recent budget surpluses have given government leaders an excellent window of opportunity to make real “job creating” changes.

In closing, fix the constitution, fix the courts, reduce the taxes, and reduce spending, and do it with conviction.  Corporate America will take notice!  More jobs in our state will create a greater demand on our workforce thus increasing wages so that our worker’s wages will be on par with our surrounding states which on average receive $10,000 dollars more a year than the average West Virginian.

There’s more, but this would be one hell of a great start.