By Phil Kabler
Throughout their reign, the GOP legislative supermajority has treated public school and public employees as adversaries, perhaps because they are the literal personification of the party’s failure to achieve a core goal of drastically shrinking the size of government and government services.
Certainly, two successful statewide walkouts by public school teachers exacerbated that feeling, as massive protests in Capitol hallways day after day left members of the Republican Party humiliated and angry.
Ever since, the GOP has been out to exact revenge, enacting measures to hamstring the state teachers’ unions and to systematically shift state funds from public education to private, parochial and charter schools.
Which brings us to PEIA, the state-managed health insurance coverage for public school and public employees.
When I first set foot in the Capitol many years ago, state public sector salaries were notably lower than similar positions in the private sector, as they continue to be. But the low pay was offset by a generous benefits package, including good pension plans and affordable, high quality health insurance.
However, the long-term financial viability of PEIA has been an issue going back to when I was still punching the clock as a full-time statehouse reporter.
Gov. Jim Justice himself appointed an expert panel in February 2018 to come up with a “permanent fix to the long-term stability of PEIA.” Less than a year later, the task force mysteriously vanished, never to be heard from again, just as it was beginning to make proposals for stabilizing PEIA, including eliminating a requirement that premiums be split 80-20 between employers and employees.
The 80-20 split had initially been put into place as a protection for public employees at a time when private-sector employers were adopting 70-30 or even 60-40 splits. However, in practice, that meant when the state put more money into PEIA, employee premiums had to go up proportionately. .Justice and the Legislature briefly got around that requirement by putting money into a PEIA reserve fund rather than directly toward funding the employer share of premiums.
That permitted PEIA to go four consecutive years without employee premium increases (against the advice of health insurance experts), and allowed Justice to claim as late as October 2021 that there would be no PEIA premium hikes on his watch as governor — even as PEIA’s own long-term forecast projected premium increases totaling 37% would be needed over the upcoming three years.
“No PEIA hikes” turned out to be another broken promise from Justice.
Instead, with no success at finding a long-term funding source for PEIA, the legislative supermajority brought the hammer down in the 2023 regular session with legislation requiring enforcement of the 80-20 premium split, effective July 1, resulting in premium hikes of 24% for public school and state employees.
Justice and the Legislature softened that blow with an across-the-board 5% pay raise, which worked out to be a wash for many employees.
Now, PEIA needs another 10.5% employee premium increase, effective next July 1, and Justice is again promising to soften the blow with another 5% pay hike.
Not so fast, Big Jim.
The thoroughly unpleasant Sen. Eric Tarr, R-Putnam, state Senate Finance Committee chairman, told MetroNews (I don’t believe Tarr talks to the Gazette-Mail) that it will be mightily difficult for the Legislature to find the $170 million needed to give pay raises in 2024 without making an equal amount of spending cuts elsewhere in the budget.
This after the GOP supermajority blew an $830 million-a-year hole in the state budget by cutting income and personal property taxes, and as severance tax collections have tanked.
For the first four months of the 2023-24 budget year, the state has taken in $210.7 million less than it did at the same point last year, a drop of 10.4%, while base budget obligations are projected to grow by $610 million in the 2024-25 state budget – an amount that includes the projected increase in PEIA employer premiums.
The West Virginia Center on Budget and Policy noted, “With looming costs and shrinking revenues, West Virginia faces a potentially challenging budget future. The revenue surpluses used to justify expensive tax cuts are starting to evaporate, and the state will soon start to feel the squeeze of the flat budgets.”
That could be interpreted as a polite way of saying, “We’re screwed.”
As the Budget and Policy report went on to note, years of flat budgets are already putting the financial squeeze on state agencies and institutions. Adjusted for inflation, the current fiscal 2023-24 state general revenue budget is $591.2 million less than the 2018-19 budget.
The impact of that financial squeeze is being felt everywhere from Corrections, to foster care, to emergency services, to the state’s flagship university, and beyond.