One theory, and a plausible one, as to why U.S. Sen. Joe Manchin backed off on a run for governor is that he can read the economic tea leaves as well as anyone else.
I’ve covered state government long enough to recognize that the state economy consists of a series of down stretches punctuated by periodic upturns.
As a graphic of state revenue trends released last week by the Pew Charitable Trust shows nicely, state tax collections saw a downturn beginning in mid-2015, bottoming out at the end of 2016, then made a partial recovery peaking earlier this year, before falling into the current three-month losing streak — a downturn that Gov. Jim Justice blamed on falling coal production and natural gas prices.
Last week, the omens got worse, as Moody’s Investors Service downgraded the U.S. coal industry outlook from “stable” to “negative” based on a sharp recent drop in coal production and exports, as well as a key tipping point for power generation, with renewable energy sources on pace to generate more electricity than coal-fired power plants — all despite of the terms of surrender ending the War on Coal.
Meanwhile, the trade publication HIS Markit last week blamed overproduction and huge natural gas stockpiles nationally for a plunge in natural gas prices to a near 50-year low.
Additionally, for those who believe the state’s economic rocketship ride of the past 15 months has been artificially propped up by natural gas pipeline construction, the West Virginia Center for Budget and Policy’s Ted Boettner alerted me to a potential cautionary tale in Jackson County.
Data from Workforce West Virginia shows that with construction of the $2.1 billion Mountaineer Xpress pipeline through the county, construction employment in the county jumped from 2,633 in the 2nd quarter of 2018 to 6,309 in the 3rd quarter, with a jump in payroll from $66.84 million to $199.13 million.
In the 4th quarter of 2018, there were 4,858 construction jobs in the county, with payroll of $166.68 million. The pipeline project was completed in November of that quarter.
Result? In the 1st quarter of 2019 — and obviously, the first quarter of each year is the slowest period for construction jobs — construction employment in the county dropped to 898, with payroll of $17.64 million.
Last December, Deputy Revenue Secretary Mark Muchow said pipeline construction was a major contributor to double-digit growth in income tax and sales tax collections in 2018, and warned legislators to expect a noticeable drop in tax collections as those projects wrapped up this year.
Manchin — who enjoyed a relatively stable economy for much of his tenure as governor, until the 2009 national recession hit, forcing state budget cuts and freezes — understands full well that governing is much easier (and more fun) during economic up times than downturns.
Last week, when assessing potential Republican candidates for governor, I surmised that Secretary of State Mac Warner would probably be sidelined, since voters are unlikely to look kindly on his costing them $3.4 million of taxpayer dollars to settle wrongful termination lawsuits.
On Thursday, however, Warner sent out email letters requesting campaign contributions to fend off what he said is an attack from the Democratic Party and “liberal special interest lobbyists” whom he said want to pass “progressive electoral reforms” designed to influence the outcome of future elections.
As evidence of the attack, the email includes a link to a video from the Democratic Association of Secretaries of State, which calls on voters to “flip” six states in 2020 that currently have Republican secretaries of state.
The video states: “Republican secretaries of state are helping Trump wage a Jim Crow-style assault on our voting rights, targeting students, seniors, and people of color with what a federal court called ‘surgical precision.’”
The latter is a reference to a U.S. 4th Circuit Court ruling striking down a North Carolina Voter ID law that the court said was designed to “target African Americans with almost surgical precision.” Other Republican voter suppression tactics the video references include shuttering polling places, purging voter registration lists and opposing open voter registration.
Warner, who in 2016 called open registration a George Soros plot to provide more voters for the Democratic Party, and who 33 months into his tenure has yet to implement a 2016 law authorizing automatic voter registration at DMV offices, contends that he is being targeted “because of my party affiliation, nothing more, nothing less.”
Hmmm … I seem to remember 16 dedicated career government employees who were fired because of their party affiliation, nothing more, nothing less.
By the way, in his precandidacy filing, Warner has not declared what office he intends to seek.
It’s encouraging that the public hearing in Charles Town regarding the pending decimation of MARC commuter rail service into the Eastern Panhandle drew an overflow, 300-plus person crowd that spilled out into hallways and outside of the public library — a crowd that made clear their support for maintaining MARC service.
Chuck Riecks, an officer in both the national Rail Passengers Association and the local Friends of the Cardinal, went to Charles Town for the hearing, and also scoped out the MARC stations at Martinsburg, Duffields and Harpers Ferry.
He found conditions of the Duffields station — actually, just an open-air shelter — and parking to be in a significant state of disrepair. (Maintenance and upkeep of the property is the responsibility of the state Rail Authority.) Meanwhile, he found parking at the Martinsburg and Harpers Ferry stations (which are also stops for Amtrak’s Capitol Limited) to be entirely inadequate.
Riecks’ conclusion: “Why has ridership declined? People have no place to park that they consider to be safe.”
Parking is obviously part of it, but a prior reduction in service and the imposition of a $2 per passenger “hillbilly tax” for West Virginia riders probably hasn’t helped ridership either.
To contrast, Rail magazine recently reported that Metrolink, the commuter rail service in arguably the most car-centric place in the U.S., southern California, had set a ridership record of nearly 12 million boardings in 2018-19, marking the fifth straight year of ridership growth.
In a tweet, the magazine noted, “In a shocking plot twist, transit operator reports that when you provide more service reliability and frequency, you attract more riders.”
Currently, two of the three panhandle MARC trains leave Martinsburg before 5:30 a.m., which is great if you start work by 7:30 or 8, but not ideal if you’re a 9-to-5er.
If we had forward-thinking leadership in West Virginia, when Maryland said asked for $3.4 million to continue six trains a day to the panhandle, our counteroffer should have been: “We’ll make it $6 million, but we want 12 trains a day, including two westbound in the morning, and two eastbound in the evening.”
Currently, all the trains on the MARC line that serves the panhandle run eastbound to Washington in the morning and all run westbound in the evening. That’s unlike the other two MARC lines, and unlike Virginia’s commuter rail service, where trains run to and from Union Station throughout the day.
Service in both directions would allow workers in suburban Maryland to commute to the growing number of jobs in the panhandle, and more importantly, would allow visitors to Washington to take the train for day trips to Martinsburg or Harpers Ferry.
Instead, the narrow-minded in the Legislature are focused on per-passenger costs of the subsidy, ignoring the reality that all forms of transportation are subsidized.
No one, for example, looks at the I-70 bridge project in Wheeling and says it should be scrapped because it will cost $75,000 for every commuter who uses it to get to Wheeling. We recognize that the I-70 project, like the MARC service, has value beyond simply serving daily commuters.
And, as folks who remember when Clarksburg and Parkersburg had Amtrak service can attest, once passenger rail is lost, it almost never comes back.
Finally, regarding last week’s item on U.S. Attorney Mike Stuart‘s conspicuous launch of a self-aggrandizing public service ad coinciding with Manchin’s announcement that he would not run for governor, colleague Jake Zuckerman reminded me that in 2011, as chairman of the state Republican Party, Stuart had a decidedly different opinion of public figures doing PSAs.
Stuart put out a news release criticizing then-Attorney General Darrell McGraw for “shamefully wasting taxpayer dollars in what is a thinly veiled effort to build his name ID in advance of next year’s election” for airing radio spots that promoted the attorney general’s consumer protection hotline.
Stuart called on McGraw to pull the ads, and to reimburse the costs of the “shameless and embarrassing self-promotion.”
McGraw ignored Stuart’s demands, but when Republicans took control of the Legislature in 2015, they passed the so-called trinkets law, which among other things, effectively prohibits state officials from using PSAs to promote themselves.
The ads that drew Stuart’s wrath featured a twangy country singer with the lyrics, “Darr-ell McGraw/Enforces the law,” which in and of itself probably should have been grounds for banning the ads.