The taxman cometh, The people goeth

The facts are all around us if you choose to look at them. John Adams said it best,”Facts are stubborn things and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence.” Of the Potomac Highland Counties, Mineral has the highest tax levy rate and lost 0.2% in population in the 2005 census estimate, Hampshire County which has the lowest levy rate gained 9.0%. If not for Mineral County’s proximity to Allegany County, MD it would have been worse. Mineral is the lesser of those two evils.

Migration reflects the dissatisfaction of the populous with the policies of the local government. Those that don’t like the current policies with the means leave, those that like them arrive. With that migration comes a change in influence. As Hampshire County grows in population it will pull in more voters in its senate and house districts. This obviously will increase Hampshire County’s influence in Charleston, and Mineral County’s will wane.

The counties seeing a reduction in population are saddled with an increasing burden of providing services with a reduction of tax base. The tendency is for political pressure to increase taxes, as is the case in Mineral County. This increase tax will increase the rate of migration out of the county. This migration is higher with the better educated residents as their skill set is more easily transferred draining the local economy of its highest income earners.

With the facts in evidence a clear course of action emerges for sound growth, cut the taxes. A counties budget increases should be limited to a combination of inflation and population growth. This will keep tax rates low and encourage economic growth for the benefit of all residents.

Department of Higher Expense..er..Highways

The DOH complains of not having enough money to maintain the roads in the state, or to build the new ones we need. That is nothing new or for that matter normal for any government department in any government. At the US 50 Association meeting held in Petersburg Wednesday the discussion turned to getting the funding to make improvements.

The ultimate goal of the group is to get US 50 upgraded to 4-lanes from the Virginia state line to I-79 at Clarksburg. This remains the only 2-lane section of US 50 from Ocean City, MD to well into Ohio. The cost for the complete upgrade is estimated at 2 Billion Dollars, but that is because of a WVDOH policy. They have a policy that states all new 4-lane roads are to be built on all new alignments, basically use nothing of the old road. In Virginia US 50 was upgraded to 4-lanes by using the original 2-lane as one half. This cost on average about 70% of building on all new alignments. Now this would turn the WV project from a 2 Billion project into a 1.4 Billion project. Last time a checked six hundred million was a nice savings.

Lets face it, even at 1.4 Billion the US 50 project is a long ways off. But it does bring up the question; of all the projects around the state a change in policy could build current 4-lane projects cheaper. This would free up a lot of money for other road improvement projects in the state, allow more 4-lanes to be built in any given year, or build the same and lower the gas tax. All or any would help the states economy.

Government agencies concentrate too much on increasing funding, and not enough of saving money. Ben Franklin had it right, a penny saved is a penny earned. That penny of course is a tax penny that belongs to you and me, so we should insist it be saved.

Exporting Coal eliminates West Virginia jobs

Think about it. Think about what happens to every truckload or trainload of coal that leaves the state. Where does it go? What is it used for? For the most part it goes to power plants in other states, but why?

For years our state politicians have been trying to increase our coal exports to retain jobs in the coal industry, but at what expense? That expense has been the loss of new jobs and tax base of the state of West Virginia. The fact of the matter is we can use our coal to both retain jobs in the coal industry and to create new high paying jobs in the coal consuming industry.

When a trainload of coal leaves the state it goes to a power plant in say Arkansas, Michigan, or Georgia it took our jobs with it. Those power plants employ workers and they pay those workers well. Instead of sending our coal and jobs to Arkansas, Michigan, or Georgia lets keep our coal and jobs, and send them electric power. The reason this is possible is because the entire country is wired into a power grid. This grid is a big web that distributes power throughout the country, and within reason the grid doesn’t care where the power plant is, so lets put new ones in WV.

Let us create new jobs in West Virginia by building power plants in the state. We already have one major advantage; we have the coal here. That gives WV a cost advantage to the power companies to build here. There is already an example of how this works in Mt. Storm, WV. The power plant in Mt. Storm sits close to the coal, thus reducing coal transport cost making the coal cheaper allowing the power company to generate cheaper power here, than say a plant in the tidewater Virginia area where coal must be trucked in.

Let’s encourage our state to government to overhaul the tax code to create incentives to build here. This will continue to pay us back for years to come through construction jobs, workers at the plants, contract maintenance jobs all of which will increase the state and local tax base.

We as West Virginians should work with and encourage our government to use West Virginia’s resources to the advantage of West Virginia. Next time you see a load of coal leave the state, think of it not just as load of coal leaving, but as WV jobs leaving.

Story about a story?

Yesterday I got a call from a friend stating Congressman Alan Mollohan was going before the Grand Jury. I’m thinking this is big news, so I immediately search the net, and find nothing. Not Fox, not Matt Drudge, not anywhere. After a few days the announcement this shows up.

WSAZ News Story

I would have thought this would have been bigger news. Many watch dog groups are looking into Congressman Mollohan's activities. Citizens Against Government Waste on March 9th named Mollohan Porker of the year. Citizens for Responsibility and Ethics in Washington named him one of the 20 most corrupt officials in Washington, this same group nailed Congressman Randy "Duke" Cunningham (R) who is now surviving time.

All I can find is a story about a story, I find that strange. We have a high profile congressman for all the wrong reasons. It seems outside West Virginia this is known, but inside West Virginia it seems to be a big secret.

Reading Mollohan's record in congress he is a very ineffective leader, on March 28th, 2006 he introduced bill H.R. 5031 and got no co-sponsors. H.R. 5031 is an extension of Corridor O of the ADHS. This bill could have had strong bipartisan support from both Roscoe Bartlett (R) of Maryland's 6th District and Shelley Moore Capito (R) of West Virginia's 2nd Congressional District as both their districts would have directly benefited from Corridor O.

2007 Bills introduced according to Thomas.gov
Alan Mollohan - 0
Nick Rahall - 5
Byrd - 7
Rockefeller - 15

To me that indicates.... well the numbers speak for themselves about how he is doing his job.

Free Market Forces versus Central Planning

Right now the Mineral County Planning Commission is in the mist of developing its Comprehensive Plan under Section §8A-3 of the West Virginia code. The county is spending $20,000 with the WVU Extension office to prepare the plan, a bargain compared to what other counties have spent. Knowing the complexity of the economy, I have to ask the question, beyond planning what government will do as far as libraries, parks, water, etc; can government effectively plan Economic Development and Land Use in the private sector as outlined in the state code?

Governments have tried to plan economies and land use for hundreds of years, and I can think of none that ever found success. Starting in 1607 over the course of 2-years 604 people were sent to the centrally planned Jamestown settlement in Virginia, all but 98 died of starvation 6 months after their arrival. In 1611 Sir Thomas Dale took charge of the Virginia Colony, eliminated central planning, instituted private property and within a few years the colony that lost 80% of its population to starvation was trading excess food to the Native Americans. Central economic planning and loss of property rights in the Soviet Union led to the starvation deaths of millions in 1932 and 1933, in China 20 to 30 million starved between 1959 and 1962. The Soviet Union collapsed under a centrally planned economy, and China survives by restoring private property rights and switching to a free market system.

Economic Development and Land Use are linked to prosperity, yet they are two separate sections of the state code on developing a comprehensive plan. That alone speaks volumes of the government’s ability to effectively plan that which it doesn’t understand. While local WV governments do not have the power to centrally plan production, they can restrict the economy through removal of property owner rights more commonly called Zoning. Let’s make no mistake zoning is only a restriction; it can never enhance the economy. A free market needs choices to operate, remove those choices through zoning and you create inefficiencies that slow or reverse economic growth.

The first looser is the entrepreneur, which create most of the jobs in the state and usually start those businesses at home. A good example is Thermo Gauge located in Fort Ashby, WV, which is currently operating out of a home while they finalize plans to move into the Fort Ashby industrial park and expand. Residential zoning would have killed this West Virginia success story before it got started. Removing the choice of starting a business in the home through government imposed land use restrictions raises the barrier to entry. It forces an entrepreneur to rent elsewhere or give up. The free market will also give the homeowner that does not want to live next to a business an option, an another entrepreneur will fill the need with a subdivision with deed covenants restricting home businesses. The free market will restrict itself on sound economic principles. Wal-Mart is not going to build a super center 6 miles down a county road that has little traffic just because land is cheap, and unrestricted. Wal-Mart knows they need to locate on a major thoroughfare to be competitive. Industry will locate were it can get is goods to market easily usually where rail, interstate or barge shipping is an option.

The dark sides of zoning are they create a class of public officials with the power to restrict the self-determination of land owners with no consequences for themselves. This power favors those with political and monetary clout at the expense of the original land owners and less affluent. Land use restrictions also create regulatory takings, this happens when a governing body restricts the use of private property so that the value is lessened. The victim of a regulatory taking still holds deed to the property, but much of its value will have been removed without compensation.

The answer to my question is government should stay out of central planning as much as possible. While not perfect, the free market will always be smarter and fairer than the bureaucrats when deciding economic and land use issues.