| By Bob Weaver
Readers could be startled by Pew Center's 'real deal' research about West Virginia's problems.
West Virginia ranks below the national average in a study of state governments, receiving a C+.
The Pew Center on the States ranked the states based on how well they manage their budgets, staffs, infrastructure and information.
West Virginia was one of 19 states to score below the national average, which was a B-minus.
The Mountain State did receive a B for money management, but Cs for policies dealing with public employee hiring and retention, information services and infrastructure.
For more than a decade, the Pew Center's Government Performance Project has been the nation's premier source for comprehensive and independent information about state management.
The center's mission is to improve service to citizens by strengthening government policy and performance.
The Project systematically evaluates how well states manage their money, people, information and infrastructureâfour areas critical to ensuring that states' policy decisions and practices actually deliver their intended outcomes.
SUMMARY OF REPORT ON WEST VIRGINIA
Skeptics have long labeled West Virginia as
a governmental lost cause.
The coal industry
has been in decline for decadesâespecially
when it comes to providing jobsâand
while the economy suffered, a long series of
state administrations saddled the treasury
with budget-busting pension bills.
These
have had an obvious constituency: The
number of West Virginia residents aged 75
and over has exploded in the past 30 years,
at a time when the state's birth rate was the
lowest in the nation.
No one is predicting a full-scale economic
renaissance for West Virginia anytime soon.
But there's some reason to be hopeful. Coal
prices have doubled since 2003, and largely
as a result of this, the state saw double-digit
growth in revenues for fiscal 2005 and 2006.
What's especially encouraging is that the
state didn't blow this extra cash on pork-barrel
extravagance.
One of the first things it did
was to address its pension woes.
The Teachers Retirement System was by
far the worst problem. Many years of inadequate
funding had left it with an unfunded liability
of nearly $5 billion.
"Teachers were getting
out of teaching because they were unsure
of retirement," says state Budget Director
Mike McKown.
But since the pension's low
point in 2005, the state has been pouring
money into the system, including $673 million
this year.
That doesn't mean that TRS
isn't still a big problem. The state will need to
spend about $289 million per year until 2034
just to fund teacher retirement.
West Virginia also is gradually moving
back from the brink in workers' compensation.
For years, the state-run and stateowned
system deteriorated, and it reached
near-bankruptcy by 2003.
Two years ago,
however, West Virginia turned to a private
insurance company to operate the system.
At the same time, it dedicated a severance
tax worth more than $90 million each year
to workers' compensation.
West Virginia
still has about $2 billion in unfunded workers'
comp liabilities, but by 2016, McKown
insists, "this debt will be retired."
While pensions and workers' comp represent
clear areas of progress, many of the
state's long-standing management problems
remain.
West Virginia has never done
much long-range planning and needs to
begin addressing this.
In the coming years,
agencies are going to be hit with a huge
number of retirements, but little work has
been done toward evolving a strategy to
cope with the departures.
The failure to plan applies equally to transportation.
The Department of Transportation
gets no money from the state's general revenue
fund; it is funded largely by a state fuel
tax.
A small increase in that tax several years
ago contained a sunset provision, and the
DOT has had to fight just to get it renewed.
The state's roads and bridges have been so
badly neglected that transportation officials
don't even try very hard to put a dollar figure
on maintenance needs.
"We're not going to
get the dollars," says Alice Taylor, the DOT's
budget director, "so why spend precious staff
time on calculating deferred maintenance?"
Even in this field, however there are
small signs of improvement. This year,
West Virginia will activate a new pavementmanagement
system, and it is in the process
of hiring a contractor to begin collecting data
on the many thousands of miles of highways.
West Virginia, unlike most states, has
responsibility for all of its roads, save city
streets.
Officials say it should be ready to go
by this spring, and then the department at
least will have information at its disposal on
such details as the number of cracks or potholes
in a given mile.
One last piece of good news: The state's
energy-fueled economic gains haven't induced
any misplaced euphoria among its
leaders.
They point out that the price of coal
in futures markets has been sinking. To
help prepare, they have stocked their rainy
day fund at 15 percent of average general
fund revenues, making it one of the
strongest in the nation.
For additional data and analysis, go to pewcenteronthestates.org
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