The Mercatus Center at George Mason University released a study this week that rated states' financial conditions. West Virginia, which has done relatively well in the past decade, actually rates as one of the worst states in the nation in terms of solvency.
This study does not rate what has been done in the past, but speculates on both the near future and the next several years. It asked:
Can a state easily access enough cash to pay its bills?
Can it consistently create enough revenue to pay its bills?
Can it cover long term obligations?
Can it continue to provide an adequate level of services?
According to Mercatus, West Virginia's financial position is fairly fragile. Some of the reasons stem from the severe drop in coal production due to Obama Administration policies. The state also shot itself in the foot by signing up for the expansion of Medicaid encouraged by the federal government. Initially federal money would cover the costs, but eventually the state must assume the burden.
Revenues are dropping but the state has expanded its entitlement burden without considering the cost. Obama's bad policy and state Democrats' poor judgment threaten to undo the financial security West Virginia has enjoyed for the past several years.
Clearly the state needs leadership that is not tied so tightly to the Democratic Party.
Showing posts with label Medicaid. Show all posts
Showing posts with label Medicaid. Show all posts
Thursday, January 16, 2014
Tuesday, October 22, 2013
West Virginia Keeps Doing It Right
Good news, West Virginia! State leaders continue to make strides to make the area more attractive to investors and residents.
The State Journal reported that a recent Tax Foundation study rated West Virginia as having the 23rd friendliest tax climate. This places it slightly ahead of Virginia, Pennsylvania, and Kentucky yet far ahead of Ohio and Maryland who ranked a dismal 41.
The Mountain State scored best in corporate taxation at 20. Property taxes scored at 27. Individual income and sales taxes rated between the two.
This makes West Virginia an average state, but also shows improvement. Under Governors Manchin and Tomblin, the state has looked at gradually reducing tax burdens anticipating a payoff in better economic growth.
In other words, counting on a Laffer Curve type of result. Laffer was one of President Reagan's chief economic advisers early on, arguing that lower taxes brought better economic returns.
One must give credit to Democratic governors who don't shy away from an idea because it came from Reagan.
The State Journal also noted that recent administrations have focused on making the overall tax climate more friendly to all levels of business growth, instead of offering drastic temporary tax breaks to lure investment. This results in a more evenly developed economy with more opportunities for in state entrepreneurs.
Governor Tomblin, however, warned that the state's expected expenditures next year would outstrip revenues. He said that either taxes would have to rise or spending be cut. With Republicans pushing hard at taking over at least one house of the Legislature next year, most likely spending will drop.
Certainly increased federal demands of states under Obama have pushed many states to have to stretch their budgets. West Virginia is no exception. Just last week a state official warned that the state expansion of Medicaid would likely force a funding cut to higher education.
West Virginia has done very well in making the tax regime more entrepreneur friendly. If it makes equal strides in reducing regulation and establishing a state court of automatic appeal, the Mountain State could grow into a serious competitor for attracting business from anywhere.
The State Journal reported that a recent Tax Foundation study rated West Virginia as having the 23rd friendliest tax climate. This places it slightly ahead of Virginia, Pennsylvania, and Kentucky yet far ahead of Ohio and Maryland who ranked a dismal 41.
The Mountain State scored best in corporate taxation at 20. Property taxes scored at 27. Individual income and sales taxes rated between the two.
This makes West Virginia an average state, but also shows improvement. Under Governors Manchin and Tomblin, the state has looked at gradually reducing tax burdens anticipating a payoff in better economic growth.
In other words, counting on a Laffer Curve type of result. Laffer was one of President Reagan's chief economic advisers early on, arguing that lower taxes brought better economic returns.
One must give credit to Democratic governors who don't shy away from an idea because it came from Reagan.
The State Journal also noted that recent administrations have focused on making the overall tax climate more friendly to all levels of business growth, instead of offering drastic temporary tax breaks to lure investment. This results in a more evenly developed economy with more opportunities for in state entrepreneurs.
Governor Tomblin, however, warned that the state's expected expenditures next year would outstrip revenues. He said that either taxes would have to rise or spending be cut. With Republicans pushing hard at taking over at least one house of the Legislature next year, most likely spending will drop.
Certainly increased federal demands of states under Obama have pushed many states to have to stretch their budgets. West Virginia is no exception. Just last week a state official warned that the state expansion of Medicaid would likely force a funding cut to higher education.
West Virginia has done very well in making the tax regime more entrepreneur friendly. If it makes equal strides in reducing regulation and establishing a state court of automatic appeal, the Mountain State could grow into a serious competitor for attracting business from anywhere.
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