By Lawrence Messina
Gov. Earl Ray Tomblin says he would stay the course if re-elected, including continuing tax cuts for businesses and consumers. Republican nominee Bill Maloney is telling voters he’ll pursue changes such as creating an intermediate appeals court and providing medical benefits to public employees through individual health savings accounts.
Each plans to act on a recent audit that found the state’s public school system choked by bureaucracy and regulation, and is second-guessing calls to expand Medicaid. Both support finding new ways to fund the state’s aging roads and bridges, fueling vehicles with West Virginia’s ample natural gas and devoting more resources to battling drug addiction. But the candidates otherwise outlined contrasting agendas during separate interviews with The Associated Press.
Nov. 6 will be a rematch between the two men. After acting as governor while state Senate president, Tomblin narrowly defeated Maloney in an October 2011 special election to complete the term of now-U.S. Sen. Joe Manchin. Tomblin and Maloney, a longtime drilling engineer and successful business owner from Morgantown, are running along with several third-party and write-in candidates for a full four-year term.
Tomblin, 60 and a Democrat, credits West Virginia’s strong emergency reserves and its recent back-to-back annual surpluses to a conservative handling of state finances developed during his more than 30 years in the Legislature. He plans to continue the gradual cuts that by 2014 will repeal the business franchise tax and reduce the corporate net income tax rate to 6.5 percent — it had been a regional-high 9 percent in 2006. Under Tomblin, the state is also on course to eliminate sales taxes on groceries on July 1, 2013, after methodically paring down its rate.
“For every penny we cut in the consumer sales tax on food, that’s in the neighborhood of $26 million that goes back into the taxpayers’ pockets in West Virginia,” Tomblin said, adding that the other cuts “are things that help businesses decide how much they can invest in the state of West Virginia, to create jobs. Our whole goal is to have a tax system that is competitive with our sister states.”
Maloney seeks the immediate repeal of the business franchise tax, which is based on a company’s net equity. The 54-year-old also advocates allowing counties and municipalities to levy more taxes. State law now limits local taxes, with counties and their school systems relying mostly on property taxes.
“We need to have some ways to make it easier for local government — county, city — to fund things that they need to get done,” Maloney said. “They know what they need and they can figure out how to generate the revenues they need to fund those needs.”
Maloney believes that expanding local taxing power would allow for greater breaks from the tax on non-real estate property. The state constitution tightly controls property taxes, and attempts to amend that language have bogged down in the Legislature.
Tomblin secured an additional property tax exemption this year, as part of the state’s so-far-unsuccessful quest for a “cracker” plant that can convert a chemical left over from natural gas drilling into compounds widely used by industry. He questions whether state voters are ready to amend the constitution, given how property taxes fund public schools.
“As much as we’d like to see those taxes lowered or eliminated, you cannot do that in a vacuum,” Tomblin said.
The West Virginia Constitution also mandates a balanced annual budget, and the state faces a projected funding gap for the budget year that begins July 1. Tomblin has called on most state agencies and programs to reduce their spending by 7.5 percent as a result.
Maloney said that if he must order cuts, he will reduce his salary as governor by the same percentage. He cited his experience as a business owner.
“If I had to force employees to take a cut, I took a cut. You lead by example,” Maloney said. “That’s something I think we need to look at. A lot of times, I didn’t pay myself for months on end.”
Tomblin noted that the governor’s office is among the affected agencies, but that the cut applies to budgets and not salaries.
Maloney echoed budget-paring steps frequently cited by candidates: running the state like a business, for instance, and targeting waste and abuse. His more specific ideas include increased drilling for natural gas and other natural resources beneath state parks and other public lands.
Maloney also proposed tackling costs from the Public Employees Insurance Agency, which provides health care to active and retired public employees, by covering them through health savings accounts. Each employee would get a set amount annually for their health care.
“If you don’t go to the doctor, at the end of the year, it’s yours,” Maloney said. “We need to promote people thinking about their health care decisions. I don’t think there is a lot of thought right now, especially with folks who have insurance like PEIA.”
PEIA already offers health savings accounts to employees who choose its high-deductible coverage option. Around 200 employees have that plan, according to PEIA officials.
Tomblin opposes touching benefits for current active employees and retirees. He said he would consider changes to benefits offered to future hires, and cited his recent legislation that will gradually close a funding gap projected for retiree health costs.
The two candidates differ on whether West Virginia needs an intermediate appeals court. Tomblin cited how the Supreme Court recently revised its rules for handling appeals, to address complaints from businesses about the fairness of West Virginia’s judicial system.
“The court has agreed to give an opinion on every case that comes before it, as to what their reasoning is,” Tomblin said. “I think we need to let those changes operate. Let’s see how they work before we go in and put in another multimillion-dollar layer in our court system.”
Maloney believes the revamped rules fall short.
“A law clerk will tell you why you lost, pretty much. That’s what it is,” Maloney said. “You really don’t have an automatic right of appeal.”
Besides creating an intermediate appeals court, Maloney also advocates further changes to the way defendants are assigned shares of jury damage awards to pay in civil cases.
Maloney cited how pro-business groups rate West Virginia poorly for its courts, and said the state’s poor rankings for work force, education and income helped spur him to run. Tomblin counters that the state has seen its tax climate improve, has become a leader among other states for growth in economic output and exports, and has been credited for expanding pre-kindergarten education, among other areas.