Last week, a Mercatus study forecast ominous signs for the West Virginia state government's future finances. It articulated concerns about the state's ability to pay its obligations in the near and long term future. West Virginia, however, sits on a much more secure position than many other states, including some of the nation's largest and most prosperous.
A Washington Examiner study shows that the Mountain State's economically conservative policies of gradual tax reduction and paying down liabilities have benefited. The state sits at 39th in unfunded pensions and total debt. For debt per person, the state ranks higher, at 29th.
This is a ranking where being lower is better.
Credit, in part, goes to Governors Manchin and Tomblin for imposing common sense. Manchin to a great extent and Tomblin to a lesser kept the lid on spending and gradually reduced the taxes that harmed the least able to pay.
They also took advantage of a boom in coal production and revenues that started under Bush, but is now grinding to a halt under the onerous policies of Obama's EPA. Gas production continues to rise, but not fast enough to replace falling tax revenues from coal.
Mercatus concerns center around the state's need to address the problem of prosperity. Manchin and Tomblin rightly deserve credit for helping to keep the state's financial position sound, but they did not take the opportunity to enact enough needed reforms. The state needs to change its business regulation and tax regime so that small business has opportunity to start and a fighting chance to survive. Economic observers praise the state's personal liberty, but blast the lack of economic freedom.
A state that ranks near the bottom for business friendliness and freedom cannot prosper. With the federal government assaulting the state's main industry, the Governor and Legislature need to look at ways to unleash West Virginia's entrepreneurial spirit.