Acting Gov. Earl Ray Tomblin said he will propose a flat statebudget for next year with no increase in taxes, no cuts. Our five-year projections show us having some problems in 2012, especially inthe Department of Health and Human Resources, with a potential $200million deficit, he said. But I think if we manage responsibly, wecan spread that out over three or four years and not have to comeback and ask taxpayers for a tax increase. Tomblin was the keynotespeaker Tuesday at a luncheon meeting of the West Virginia Business& Industry Council at the Charleston Marriott. Over the years wevemade some great changes, Tomblin said. We are one of four statesthat ended the past year with a surplus. I was on a talk showrecently, and the fellow was talking about what Virginia and Ohiowere doing and asked why West Virginia wasnt doing those things. Isaid, Those states are broke! West Virginia hasnt had a general taxincrease for 16 years, Tomblin said. Were paying our debt. Thats theposition weve taken. Were trying to be responsible for the peoplesmoney. I think thats where people want us to go. He noted that thestates bond rating has increased in recent years; the West VirginiaInfrastructure Council has rationalized the funding of water andsewer projects; and the work of the state School Building Authorityhas resulted in West Virginia having some of the best educationalfacilities in the country. Tomblin noted that the state is on a 40-year plan to pay down the unfunded liability in the teachersretirement plan and has not missed a payment. While all that ismoving in a positive direction, we do have some problems, he said.The last 1,000-pound gorilla in the room is other post-employmentbenefits, an unfunded liability estimated to total about $8billion. Im disappointed that in the last two years we havent comeup with a plan, but that hasnt stopped us from working on theproblem, he said. He said his goal is to at least stop thehemorrhaging in the next legislative session. Every day we dont doanything, the liability grows, he said. If we dont stop it now, ourchildren and grandchildren will have to pay. When new employees arehired by the state, we simply cannot afford the kinds of benefits wegranted employees in the past, he said. This didnt happen overnight,and it wont be solved overnight. But if we could stop thehemorrhaging, I think that would be a great improvement for thestate of West Virginia. Tomblin noted that a special session earlierthis year did not make any headway on education reform. But I thinkwe did have all of the players around the table, and I think theteacher organizations, the leaders of the state House and Senate, weall realized were not doing what we need to do, he said. I think fora good business climate we absolutely must have an educatedworkforce. For K through 12, we have one of the highest dropoutrates. We still have one of the lowest college graduation rates.Weve got to improve on that. Tomblin said hes pleased with thestates community college system. It took us nearly 15 years toseparate them out from higher education, he said. I think this iswhere the future is, to supply a trained workforce. If you needtraining for your employees, they can quickly have a program up andgoing. Were seeing that in the natural gas and coal industries. Ifwere going to have an educated workforce, there can be no stigma,nothing wrong with not having a four-year degree. Everyone doesntneed a four-year degree. During a brief question-and-answer session,Tomblin was asked whether he plans to try to reduce or eliminate theproperty tax on business inventory and equipment. The Logan CountyDemocrat said West Virginia is one of the few states that stilltaxes inventory. It has been estimated that elimination of the taxwould result in at least $172 million in lost revenue for schoolsand local governments. In March the Legislature failed to act onthen-Gov. Joe Manchins request to ease such taxes through aconstitutional amendment. Tomblin noted that schools and localgovernments raised a lot of concern about the loss of revenue. Wevegot to come up with a better answer than we had last year, to showhow were going to keep local governments and school systems solid,if were going to do away with the inventory tax, he said. RuthLemmon, executive vice president of the West Virginia Automobile andTruck Dealers Association, asked for Tomblins thoughts on how we cancontinue to improve the legal climate in West Virginia for thebusiness community. Weve made progress, Tomblin said. Theres stillroom to make the state more business friendly. Tomblin, who becameacting governor on Nov. 15, said he couldnt offer a concreteproposal, but if we can take a little bite at a time and addressthese individual problems, well probably have better success than ifwe try an overhaul of the legal system. About 75 business leadersand state legislators attended the luncheon. They gave Tomblin astanding ovation when Jan Vineyard, the councils chairwoman,introduced him. After his speech Vineyard said, You hit on a lot ofthe things we are concerned about. If business thrives, we employpeople and they spend money in West Virginia. Fiscal responsibilityhas been key to your success. She said the council advocatestransparency in government, improvements in education, a trainedworkforce and, in the court system, the right of appeal. She saidthe council has adopted the same theme Tomblin expressed in hisfirst public address as the states chief executive: Putting WestVirginia First in 2011. Contact writer George Hohmann atbusiness@daily
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