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Spirit of Jefferson Farmers Advocate
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July 24, 2013

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t0irit o, JEFFERSON and FARMER'S ADVOCATE O p inio n Wednesday, July 24, 2013 A7 JOE MANCHIN On Capitol Hill recently, I was asked: If coal is so controversial, why don't we, as a nation, just use more electricity? I'm not usually at a loss for words, but I didn't know how to respond to such an uninformed question. What I should have said is this: When you surf the Internet, watch TV, play a video game, turn on the AC or charge a cell phone or your hybrid car, you're using electricity. And there's a good chance that electricity came from coal. That question convinced me it was time to lay out the facts about coal, be- cause 'in the weeks and months ahead - maybe even for years to come - we are going to be debating President Obama's latest global climate propos- al. And it's crucial that this debate be based on crystal clear facts and not clouded by political ideologies on ei- ther side of the aisle. So, starting last week, I began a se- ries of speeches on energy. And I start- ed with a look at the history of coal - how it fueled the Industrial Revolu- tion and made America what it is to- day: the richest and most powerful na- tion in human history. I think it's important for me to ex- plain the facts about coal for several reasons. The coal industry and its supporters have been falsely portrayed by their detractors as monsters that value mon- ey over health and the environment. And as the question about using electricity instead of coal illustrates, the American public has some basic misconceptions about coal and just how important it is to keeping our economy growing and our nation se- cure. But the foremost reason for my speech last week was the fact the Obama Administration's global cli- mate plan is rooted in provisions aimed at regulating the coal industry out of existence. The Administration's plan is short- sighted, ignoring the fact that coal is America's most abundant, most re- liable and most affordable source of energy, and it will be for decades to come. Coal is responsible for 37.4 percent of all the electricity-generated in the United States today, more than any other source of energy. And the De- partment of Energy projects it will re- main the dominant fuel for electric- ity generation in our country at least through 2040. Despite the Administration's at- tempt to kill it, coal is critical to meet- ing the future energy needs of Amer- ica. In other words, we can't make it without coal. And yet, the Administration is push- ing ahead with its global climate plan, which is a true declaration of war on coal, with the Environmental Protec- tion Agency at the vanguard of that war. I voted against Gina McCarthy, President Obama's nominee to be Ad- ministrator of the EPA. But my fight is not with Ms. McCa- rthy. My fight is with the EPA and the President who nominated her to head the regulatory agency that has already done so much to kill the jobs that coal mining families depend on. That fight will continue until the EPA stops its regulatory rampage and until the President comes up with fea- sible policies that achieve real energy independence for America. Every President for the last 40 years has talked about how to end our coun- try's addition to foreign oil in order to achieve energy independence. Today, we have it within our means, if we pursue an "all-of-the-above" en- ergy strategy that includes all of our American-made energy resources, in- cluding coal. If we stop demonizing one energy source and start using all our resourc- es, we can - oncee and for all - end our dependence on foreign oil within this generation and keep our country more secure and our economy produc- ing jobs for generations to come. -- Joe Manchin is a U.S. senator from West Virginia TOM MILLEi{ A group of West Virginia legislators will travel to North Dakota soon to learn more about a state Legacy Fund there -- a 2-year-old trust fund creat- ed with oil and natural gas tax reve- nue that already contains more than $1 billion in assets. State officials there can't touch that money until 2017 when interest generated from the ac- count will start flowing into the state's general revenue fund. Senate President Jeff Kessler, D- Marshall, wants to start a similar fund here in West Virginia, using tax rev- enues from natural gas production in the state. He hopes the delegation can learn not only how successful the Leg- acy Fund has been there but also con- sider the problems that state experi- enced during the first two years of its existence. The first problem was that voters in North Dakota rejected a proposed con- stitutional amendment in a statewide 7 election in 2008, with nearly two of every three voters rejecting the idea. It would have directed 50 percent of the state's tax revenues from all oil and natural gas production to the new Legacy Fund. But when lawmakers there went back to the drawing board and sug- gested only 30 percent of these tax revenues be diverted to the new Leg- acy Fund, nearly, two of every three voters endorsed the idea. Originally, the North Dakota Leg- islature established a "permanent oil tax fund." It had the same basic goal as the current Legacy Fund, but be- . cause it was only a state law -- unlike the Legacy Fund, which was created as an amendment to the state's consti- tution--a simple majority vote of the Legislature could remove money from the account. So the legislative leaders of the movement decided to make the cre- ation of the Legacy Fund plan a part of the state constitution. Voters rati- fied that idea in 2010, so now the Leg- islature would need voter approval be- fore any of the money can be spent. This still didn't stop some legisla- tors there earlier this year from trying to pass a bill to take $10 million in in- terest earned in the Legacy Fund to be used for a college scholarship pro- gram. But the proposal was eventually defeated. Kessler has been getting a lot of phone calls from members of both the House of Delegates and state Senate from both political parties, who would like to be chosen for the trip to North Dakota. Those chosen and when the trip will occur are expected to be an- nounced soon, according to Kessler spokeswoman Lynette Maselli. West Virginia collected $74.7 mil- lion in natural gas severance taxes last fiscal year, a slight increase from the $68.8 million that was received in the 2012 fiscal year. Coal severance taxes, meanwhile, dropped $73.4 million be- tween the 2012 and 2013 fiscal years from $460 million to $386.6 million. Kessler has tried to set up a natural gas "Future Fund" during each of the last few regular legislative sessions. This year's proposal would have set a baseline of natural gas excess tax revenue and then funneled 25 percent of any additional money into a trust fund. The bill died in the Senate Fi- nance Committed. Meanwhile, many of the pensions paid to individuals who have worked in state or local government and are now retired are in the six-figure range, according to recent newspaper re- ports. And the largest individual pen- sions are in the Teachers' Retirement System. Olen (J.E) Jones, a former Marshall University provost and pres- ident of the West Virginia School of Osteopathic Medicine, has a pension of $169,674 a year. Former Braxton County Superin- tendent Kenna Seal, who has also served as head of the state Office of Education Performance Audits, gets $116,955 per year from the same pen- sion plan and former state superin- tendent of schools Jorea Marple -- fired last year -- has an annual pen- sion $107,062 a year. Her predecessor as state superintendent, Steve Paine, has a $101,063 annual retirement pen- sion. some judges have six-figure pen- sions as well. Prior to 2005, state law required that retiring judges were to receive 75 percent of their current sal- ary. So former justices of the State Su- preme Court of Appeals Elliott May- nard, Thomas McHugh, Richard Nee- ly, George Scott and Larry St,arch- er each receive $102,000 annually in their retirement, according to a recent newspaper report. Altogether, there are more than two dozen retired state employees who draw pensions in excess of $100,000 a year, and there are 79 more who re- ceive an annual pension of more than $80,000 a year. No wonder the state had to allocate about 12 percent of last year's gener- al revenue fund budget on retirement benefit plans for teachers and public employees alone. Finally, the governor,s special blue ribbon panel that is conducting a se- ries of nine regional meetings around the state to gauge public opinion about potential tax increases to help pay for much,needed repairs and improve- ments of West Virginia's existing highway system began its tour in the Eastern Panhandle at Keameysville on July 11. Members found at least one East- ern Panhandle lawmaker who rec- ommended cautious consideration of higher taxes. Delegate Larry Kump, R-Berkeley, Said it was "troubling that one of the first agenda issues . . . is a smorgas- bord menu of ways for more taxing and spending." He pointed out that West Virginia is still one of the few states that as- sumes responsibility for county roads and bridges. And he also noted that despite neighboring Maryland's recent boost in its gas tax, West Virginia's per gal- lon tax is the highest in the region. And he pointed out that many residents in the Eastern Panhandle -- so close to neighboring Maryland, Virginia and even Pennsylvania -- have out-of- state license plates on their cars when they drop off their children at school. LLIAOq SIMON Last week the city of Detroit filed for bankruptcy, reportedly with an indebt- edness of more than $18 billion. The city has a staggering pension liability as well. This has called into question the "blue model," a label that has been ap- plied to what are called "progressive" municipalities such as Chicago, Santa Fe and Oakland. Chicago's credit rating was lowered three notches at the same time that De- troit filed for bankruptcy. Could they be next? hi 1960, Detroit had a population of approximately 1.8 million, more than two and a half times its current popu- lation. It also had the highest per capita income in the nation. There are many who trace the decline of the city to the "blue model" and machine politics. As Washington Post columnist Rick Plumer observes: "Detroit has been a one-party city mn by Democrats since 1962." West Virginia has been straggling under the "blue model" for even longer than Detroit. We've been under one- party rule since the 1930s. Over that time period, our state's economic re- cord is abysmal and the path we are on is as unsustainable as Detroit's. In 1934, West V'irginia ranked 30th in the nation in per capita income; today we are 49~, just ahead of Mississippi. In 1950, our population was over 2 mil- lion; today it is 1.85 million. According to Forbes' list of The Top 10 States Peo- ple Are Fleeing in 2013, West Virginia ranked 3rd, behind New Jersey and Il- linois. According to the CNBC survey, America's Top States for Business 2013, West Virginia ranked 48th. We ranked last in the "business friendliness" cat- egory, the measure of the state's legal and regulatory climate. Dtkdng the 10- year census period ending 2010, West Virginia was the first U.S. state in his- tory to record more deaths than births. That is the abysmal part. Here is the, unsustainable part. Like Detroit, West Virginia has a huge unfunded pen- sion liability. In spite of what you hear, that problem has not been fixed. Then there's the growth of our state's bond debt, which according to an article by West V'wginia Watchdog published in February of 2010, is growing at an alarming rate. In 1991, the state Legislature creat- ed a new agency called the Division of Debt Management. The agency only reports on debt; it does not create com- prehensive plans as required by the leg- islation that created it. You can't make this stuff up. According to the article, from 1991 through the end of 2009 our bond debt increased by a staggering 158 percent. You can be sure that it has increased since then. Our local sewer bonds will add $100 million alone. The growth of our state government is just as alarming. Back in the ear- ly 1990s our state budgets were run- ning around $3.5 billion. Today they are running $11.5 billion. That's a threefold increase, Adjusted for infla- tion, the budget has doubled in constant dollar terms. Yet, over that time frame the population of West Virginia has in- creased by less than 2 percent. So, over a two-decade time span, the population of West Virginia has remained almost stagnant while gov- emment spending doubled in constant dollars and the state's indebtedness increased by more than 150 percent! This is clearly unsustainable and begs the question: Why do we need a gov- emment that is twice the size it was 20 years ago to serve the same numl~er of people? If we're going to spend twice as much for something, shouldn't the quality be better? That's just not how it works under the "blue model?' The price goes up, the quality goes down. Against this backdrop, the Gover- nor's Blue Ribbon Commission dog and pony show has been traveling throughout the state promoting a pro- posal to raise as much as $1.3 billion in additional revenue for highways. It ar- rived in Keameysville on July 12th. Let's put this into perspective. The current state budget is around $11.5 bil- lion. That is an expenditure of $6200 for every man, woman and child in West Virginia -- almost $25,000 for every family of four. And we can't af- ford to maintain our roads? Where is all that money going? Are you getting your money's worth, dear taxpayer? The median household income in the state is around $38,000, so there aren't many families paying $25,000 per year into the state's coffers. It's simple math, it doesn't add up and it's not sustain- able. An additional $13 billion would mean an additional $700 from every living soul in West Virginia, or $2,800 for a family of four. Can your family af- ford that? The entrenched political machine in Charleston is constantly working on ways to expand the size and scope of state government at our expense, and to our detriment. If more money is needed for highways, it needs to come from ex- isting sources. Otherwise all roads lead to Detroit. -- Elliot Simon writes from Harpers Ferry