Thursday, August 18, 2005

Political Pandering Not an Acceptable Response to High Gas Prices

Attention fellow politicians and political aspirants, repeat after me: I will not use sky-high gas prices to engage in cheap political pandering. Repeat until this message sinks into that gray matter inside your skull.

We've all seen the Democrats continuously call for tapping the Strategic Petroleum Reserve despite the miniscule impact it would have--and a short one at that, as it has less than a 90-day supply of oil--as well browbeating oil company executives--which may give a lot of pleasure to politicians who parade these people before their legislative or congressional committees and, before the TV cameras, call these people the lowest form of human scum. We know what to expect from a party of anticapitalist demagogues who have kowtowed to radical tree huggers and contributed to the astronomical oil prices we now face.

So why are Republicans now trying to pander as well? Just as much as I despise these cheap shots by the Dems, I also equally despise attempts by some Republicans at proposing things like gas tax holidays. When gas is almost $3 a gallon, a nickel or dime doesn't mean much. Gas taxes don't affect the fact that crude oil costs $65 a barrel because of high demand from the Red Chinese and futures market speculators that have inflated oil prices by pricing oil today based on what it might cost in the future.

Today's installment of pandering from my side of the aisle comes from state Senator Vic Sprouse and Delegate Ron Walters, both of Kanawha County. Today's Charleston Daily Mail reports that they would like to suspend increases in the state gas tax based on the wholesale gas sales tax formula, which is 5% of the average wholesale price of gas. Since the wholesale gas sales tax formula was enacted by the Legislature in 1983 it has been 4.85 cents a gallon except for 2002, when it increased to 5.15 cents, and this year when it increased to 6.5 cents.

Another reason why any cut in the gas tax is a bad idea is that gas taxes are the primary source of highway funding in West Virginia and most other states. We have decided to fund highways with gas taxes, registration fees (which, in this state, are quite a bargain at only $30 per year for most cars), etc., because these taxes and fees closely represent a user fee for the service of public highways. Article VI, Section 52 of the state Constitution provides that all gas taxes and vehicle registration fees must be used for highways.

In West Virginia, our state highway funds are spent not only for new construction (most of which receives a 4-1 federal match) but also maintenance of over 40,000 miles of existing roads--most of them small local roads. Unlike some other states, we don't perpetrate the charade of low state taxes for highway purposes only to shift the responsibility of local road maintenance to county and other local governments who must then impose their own taxes for such purposes. Nor do we do like Kentucky and let the snow melt naturally and close the schools for 2 weeks at a time when it snows. Except for local streets in municipalities, the state Division of Highways paves the roads, plows the snow, mows the weeds, and digs the ditches. On most of these routes, the entire cost is paid by the state (federal funds only pay for Interstates, US numbered routes, and select state routes, and only part of the cost when they do).

West Virginia is not awash in gas tax revenues. According to the state's Comprehensive Annual Financial Report for 2003 (Adobe Reader required), gas tax collections increased from $275 million in FY 1994 to $296 million in FY 2003. Indeed, the total increase over this ten-year period was only 7.6% while the Consumer Price Index--the official measure of inflation in the United States--increased by 24%. Essentially, the state's gas tax collections fell by 14% when adjusted for inflation over this period. Had our gas tax collections increased just at the rate of inflation, we should have had $45 million more in FY 2003, not to mention other years.

The sad truth of the current gas price situation is something no politician wants to say for fear of an opportunistic opponent loose with the truth: Short of discovering practices in the futures markets that have significantly inflated oil prices and halting those practices--something which, if possible, could only be done at the federal level--there is virtually nothing that the political class can do to bring short-term gas price relief. Gas tax cuts will likely only be consumed by future gas price increases. In the long term, we should be producing more oil and gas, as the current prices are the product of increased demand. Current technologies permit oil drilling in virtually any place, even environmentally sensitive areas like offshore along the California cost and Florida gulf coast. Until the fuel of the future, cars that can use it, and a reliable and efficient production and delivery system are all developed, oil is here to stay.

Wednesday, August 17, 2005

In W.Va., Crime Really Does Pay

Today's Charleston Daily Mail had an excellent editorial (unfortunately, they only publish articles from the last 14 days online) condemning the $50,000 verdict recently returned by a Kanawha County jury in favor of Mark Allen Harris--murderer, jail escapee, former star of America's Most Wanted, and child molester--because the state was somehow negligent in an incident in which Harris fell out of the back of a paddy wagon.

The award included $30,000 for mental and physical pain and suffering; $10,000 for annoyance and inconvenience, and $10,000 for loss of enjoyment of life. How does a convict serving a life sentence for a sexually violent offense committed while he was on parole for murder and escape lose enjoyment of life?

Let's review this man's rap sheet: murder, jailbreak, got paroled at the first possible opportunity, raped a 12-year old three years after getting paroled, then this little incident en route from the jail to the courthouse. In the process, Harris landed an appearance on America's Most Wanted while he was at large. It's just too bad the jury in this civil case didn't get to hear why he was in that paddy wagon to begin with.

How did a convicted murderer who escaped from jail get paroled? And why does our Legislature continue refusing to strengthen this state's sex offender and Three Strikes laws to protect law-abiding citizens from the most serious criminals out there?

Also, check out Hoppy's commentary on this issue and Don Surber's comments.

Monday, August 15, 2005

WVGOP Launches Campaign to Include Eminent Domain Reform on September Special Session Agenda

WVGOP Action Alert: Help Protect Homeowner Rights

The state Republican Party today launched a petition drive to encourage Governor Joe Manchin to include eminent domain law reform on his agenda for the special legislative session scheduled to begin September 7. Current West Virginia law is, like those of many other states, relatively liberal regarding when state and local governments may seize private land.

In the wake of the Supreme Court's 5-4 ruling in Kelo v. New London (in which conservative justices Rehnquist, Scalia and Thomas and recently-retired moderate Justice O'Connor dissented), a groundswell of public support has sprung across the political spectrum demanding that eminent domain laws be reformed to protect private property owners from the confiscation of their property for expropriation to another person simply because that other person would make the property more valuable or useful in the eyes of the condemning agency. Unlike most bad decisions issued by the US Supreme Court, the Kelo decision leaves state and local governments the room to change their own laws to correct this injustice. In this decision, the court held that, despite over 200 years of history to the contrary, the US Constitution did not prohibit such transfers of property from one private owner to another.

Currently, at least eight states have state constitutional provisions or state supreme court rulings interpreting their state constitutions to prohibit the forced transfer of property from one private owner to another. If you'd like to know more about the movement to reform eminent domain laws nationally, I highly suggest the Institute for Justice's Castle Coalition project. Also, if you would like to download a copy of the state Republican Party's petition, click here. To contact Governor Manchin, click here.

Can WV Afford Some Modest Tax Cuts? You Bet

If you are one of the millions of Americans who suffer from insomnia, may I commend for your nocturnal reading pleasure the Comprehensive Annual Financial Reports of the State of West Virginia? These reports are punished annually by the Department of Administration's Division of Finance and include data from the most recent ten fiscal years summarizing various state revenue sources and spending categories.

According to the 2003 CAFR--the most recent edition published online (direct link to stats used in this paragraph, Adobe Reader required)--total revenues from the sales tax grew from just under $690 million in FY 1993 to over $917 million in FY 2003. Over the same period, personal income tax revenues grew more rapidly, from just over $666 million to just over $1 billion. Both of these taxes saw no rate changes or other major changes in their structure. Total state revenues from all taxes combined have grown over the same period from $2.2 billion to $2.9 billion. Over the same period, the state's population fell by 1% and public school enrollment fell by 11% (even though overall education spending increased by over a billion dollars.

Why do all these figures matter? If you believe the Ruling Party's legislative leadership, if not for the pension debts we need to pay, we still have many unmet spending needs. Of course, they have jettisoned the latter line from their talking points since they now know how volcanic the response would be at election time if they just said, "Sorry, we're not going to give you any tax breaks because we need to spend that money a lot more than you need it." It is quite ironic that one of the largest areas of increased spending, education, received a cumulative increase in its annual appropriation of over $1 billion--representing a 77% increase, from just over $1.3 billion to over $2.3 billion--even though public school enrollment fell by 11% over the same period--combining for a per student increase of over 85%. Even though we are the poorest state in the country, we rank 12th in total education spending per pupil in daily attendance, at just under $10,000 annually. Adjusted for per capita income, West Virginia is second only to Connecticut in education spending. The product we are receiving is scandalous, but I will comment more on that later.

These figures are also relevant because most tax cut plans that have been proposed by the Republicans over the years have involved phased-in cuts over varying periods of years that would allow the present levels of government services to continue by using each year's revenue increases for cutting taxes instead of increasing spending. Don Blankenship is advocating an immediate, full repeal of the food tax since it was reinstated in one installment. However, the whole purpose of the phased-in nature of the various tax cuts legislative Republicans have offered is to try to show some good faith with the Ruling Party and also demonstrate how unreasonable the Ruling Party has been in their blanket rejection of these proposals.

Sunday, August 14, 2005

Does Helmick Really Think We Have "STUPID" Written on Our Foreheads?

WV Senate Finance Committee Chairman Walt HelmickSenate Finance Committee Chairman Walt Helmick just can't help himself. Day after day, he repeats the same self-contradicting talking points in opposition to any and all tax cut proposals: Pay the pension debts first--all of them--then and only then even consider cutting taxes. Today, his message appears in the Beckley Register-Herald (article no longer available online). Do Helmick and his cohorts in the legislative leadership of the Ruling Party really think we, the people of West Virginia, believe them? Or do they think we all have "STUPID" written on our foreheads and will buy this load of male bovine excrement, let the Legislature forego cutting taxes with a promise of appropriating that money toward accelerated debt reduction, and then watch as the Legislature passes spending increases with the money they said they would apply to accelerated debt reduction?

The Ruling Party cannot be trusted to keep a promise like the one they would like you to think they're extending. Of course, that would only be the case if they were actually making such a promise. The fact, however, is they're not even making such a promise but have cleverly phrased their talking points to make us think they're doing so. They have made no promise to forego new spending--as the flip side of foregoing tax cuts--to pay for accelerating the paydown of the pension debts. As I said Wednesday, the state is proceeding under a 40-year structured amortization of this debt based on a schedule of annual payments that we are meeting and will continue to meet even if our economy remains as it has been, for the next 30 years.

It would be one thing if the Ruling Party was asking us to forego tax cuts and them to forego more spending by adopting a constitutional amendment restricting the growth of state spending other than debt payments. However, they are not doing that and would not be permitted to do that by their own constituencies. Do we really think they're planning to do something responsible and pay for the proposed public employee pay raises by identifying and cutting other excesses in government? Or is it really the case that these raises plus whatever other programs are on the drawing board are to be financed with the money we're being led to believe would be applied to accelerating the payoff of the pension debts because the leadership of the Ruling Party knows that if the people are offered the option of tax cuts or more spending (and no other options), we would overwhelmingly choose to keep some of our tax dollars?

The people of West Virginia are yearning to keep more of their own money. Our economy suffers from high taxes, a complicated tax code, and lavish corporate welfare that excessively meddles with the economy. We would be willing to accept some tax cuts and some acceleration in the debt payoff if the future growth of government is constitutionally limited as Colorado has done and Ohio may do soon. Until then, the Ruling Party's rhetoric is nothing more than a ruse to try to prevent us from demanding they reduce the amount of money we're now spending to finance a state government that is larger per capita than 47 other states and all 10 Canadian provinces.