Control spending to cut taxes
Phasing out West Virginia’s personal income tax is a wonderful idea. It would attract more people and, even more important, businesses to our state.
But the tax feeds about $1.9 billion a year into state government. That is nearly half the general revenue fund. So, what to do about that gap in the budget?
State Senate leaders and Gov. Jim Justice have an idea on that. It is to increase the sales tax by one percentage point and boost revenue from a few other sources. The additional money would be used to begin phasing out the income tax.
That just isn’t workable because it would send many residents of border counties into other states with lower sales taxes to do at least some of their shopping. Ask business owners in counties adjoining Ohio, Pennsylvania, Maryland, Virginia and Kentucky how much they like that idea.
So, back to square one on doing away with the income tax? Not really. An old idea ought to be resurrected to lay the foundation for trying again next year.
For some time, I’ve been asking why legislators and governors allow the state bureaucracy to ambush them every year. Annually in December or January, just before lawmakers begin their regular 60-day session, there’s brave talk about insisting that state agencies reduce spending.
And every year, the bureaucrats vow that if they’re told to tighten the purse strings, the sky will fall. Important programs will be eliminated. College tuition will go up. Some public schools will close. State Police troopers will be as scarce as hen’s teeth. Forest fires will rage uncontrolled. And on and on.
At which point legislators back off and most agencies avoid any real spending discipline.
Let me pass along a story I was told about one state office. There, a woman had been employed by the state for years. She continued to process forms on paper, even as most people doing similar work switched to computers.
Asked by supervisors to at least try doing the job on a computer — and thus, eliminating something of a logjam in the office — she refused. Let me repeat that: She wouldn’t even try to learn how to use a computer. She survived on the state payroll for years.
Why is that? We all have compassion for people who have held down their jobs for many years. But as taxpayers, we have a right to expect something in return, namely, willingness to try to learn new, better ways of doing things. Most of the time, if people in that position try but just can’t get the hang of it, employers cut them a break. But telling one’s employer to take his request and shove it shouldn’t work.
How much of that sort of thing — inmates running the asylum, we used to say — goes on in state government? How much does it cost taxpayers? Justice and legislators need to find out.
Regardless of what happens with the budget this year, the governor and lawmakers should put out the word: State agency heads have eight months, until the next annual session of the Legislature convenes, to cut spending by a certain percentage without eliminating any services.
Think about it. Last fall, then-Gov. Earl Ray Tomblin ordered several agencies to reduce spending by a total of $59 million for the current year. They did, and I’ll bet you didn’t notice any decline in services. Yet now, the same people say terrible things will happen if they don’t get more money than they were initially budgeted for during the current year.
It is as if they hope no one noticed they managed to get things done during the last seven months of the current fiscal year with less than they now say they must have next year.
Divide $59 million by seven, then multiply by 12. That $101 million would be the savings if the Tomblin cuts were enforced for a full year.
Then add, say, 4 percent more in cuts. That’s another $150 million to $160 million, for a total of as much as $260 million. That happens to be about what it would take to begin phasing out the income tax.
I can hear the bureaucrats now. “It won’t work.” How would we know that? We’ve never tried.
Mike Myer is the executive editor at the Wheeling Intelligencer and Wheeling News-Register. Myer can be reached at email@example.com.