As the Legislature discusses the West Virginia budget, I hope that they will bring a smart business approach to our budget dilemmas. Nobody like taxes but everybody wants good roads, good schools, health care, police protection and other services that require investments by our state.
West Virginia legislators should understand that upfront investments are the key to bringing business into our state and creating a stable and productive economy that can grow in the future. There is no question that our legislature faces a difficult challenge to find the new revenue to make smart investments in our state. It will require an in-depth assessment of our current revenues and needs, and the political courage to promote smart new revenue options. West Virginia’s unique budget challenges are exasperated by the decline of coal and low gas prices. However, past corporate tax cuts and the phase out of the food tax that started a decade ago has left our state budget with a net loss of more than $200 million a year.
Smart revenue options need to be widely shared across economic sectors and our tax-paying citizens, but without leaving those struggling with the least income disproportionately affected. The West Virginia Center on Budget and Policy has researched a diverse menu of new revenue options that would not be an unfair burden on any one individual or group and propel us to a more prosperous future.
Every legislator should know that the most important investments our state can make are in our children and families. Every $1 cut in health, education and social services will impact the life of a child — their performance in school, their future health status, and their collective success as the future brain trust and workforce for our state. Fortunately, many of our programs for children have a hefty federal dollar match. A small state investment brings in significant new federal dollars. Cutting these programs means losing millions of federal dollars that support children and families, create jobs, and support economic development in West Virginia. No rational businessman would say no to interest-free outside investment. Our legislators have the opportunity to not only preserve family investment programs and the federal dollars that pay for them, but the flexibility to bring in more federal dollars while making sure we invest in cost-effective programs that build on public-private partnerships.
The West Virginia Medicaid health insurance and long-term care program is a prime example of a cost-effective public-private partnership program that brings in federal dollars. Without Medicaid, our children and families still will face health problems that won’t just disappear. But without Medicaid, the state will need to respond to these problems with state-only dollars and at more than three times the cost to our state budget. Senate Finance Chairman Mike Hall, R-Kanawha, said it well: “If we cut Medicaid, we are cutting off our nose to spite our face.”
Medicaid supports the health and long term care needs of 600,000 West Virginians. It provides health insurance coverage for children and low-income families and takes care of the long-term care needs of our most vulnerable populations: people with disabilities and low income seniors. Medicaid pumps almost $4 billion into our health care system. Without Medicaid we would not have the health care services we all need. Nursing home care would not exist without Medicaid. The State Medicaid program is doing an excellent job to manage the costs in the program. The new federal dollars flowing into West Virginia because of the Medicaid expansion are expected to create 9,100 new jobs and add $1.59 billion to the state economy between 2014-17 according to the Urban Institute, the Congressional Budget Office and the Council of Economic Advisors.
If our legislators reduce our investment in Medicaid, they will be reducing the investment in the health of West Virginia children and families. Not only will we leave thousands of West Virginians without health insurance and access to necessary health services, we undermine our health care industry and reduce federal dollars that can support economic development.
I hope common sense and a realistic assessment of our current situation prevails among all state policymakers. We must have new revenues to support the services we need and put our state on a solid financial footing for the future.
Renate Pore is health policy director at West Virginians for Affordable Health Care.