Sunday Sit-Down: Dr. Tom Witt

— You’ve been at West Virginia University for the past 42 years, which encompasses the administrations of seven different state governors. What are some of the more interesting economic policies or changes that have come out of Charleston over those four-plus decades – both on the positive and negative end?

Witt: I think one of the more positive is the realization that in particular higher education needs to be freed from some of the restrictive constraints that other state agencies have to labor under. I think we’ve seen a major devolution of authority to in particular West Virginia University but as well as the other colleges and universities. Related to that, I think finally the state recognizes the importance of a free-standing community college system. It always struck me as odd that many other states that were enjoying growth had free-standing community colleges that were very responsive to the changing economic climates in which they were participants with industry and they could rapidly move to meet those needs. Here, our community college systems were really embedded in state colleges that had a different mission. I think that’s probably one of the long term, major changes that we’ll be seeing is how those community colleges react to the emerging economic realities that we’re going to face.

… One of the policies that we’ve inherited is embodied in our West Virginia Constitution. In the 1930s we had constitutional changes, and one of those changes was to basically restructure the relationship between local governments and state government. They did that in the way which we find at the local level, very little government authority for raising a variety of different taxes and having independence from some state control. So now, when a locality like Ohio County or Monongalia County or Mingo County wants to engage in some type of economic activity or an activity to enhance the quality of life, everyone has to go hat in hand to Charleston.

When you look at local versus state finance, we really don’t have a true partnership there, we basically have most of the decisions being made in Charleston. In contrast, when you look at Ohio, Ohio local governments are a lot better funded, better organized, leadership is better developed at the local level, and they take responsibility for a lot of things that we defer to the state. So I think the structure of our governments going forward is going to have to change to reflect the reality that what’s important in Ohio or Monongalia County is different in Gilmer or Mingo or other counties. We’ve got to provide more autonomy, more responsibility so that we have a true partnership between local and state government instead of having everything come through Charleston.

— Currently in West Virginia, power is centralized in Charleston, which means cities don’t have the authority to govern themselves. The state has embarked upon a Municipal Home Rule Pilot Program, which runs through next June. What are your thoughts on that program and on home rule in general, and is home rule the answer for West Virginia?

Witt: I think home rule is the answer for West Virginia … and it has to go a lot further. Still, home rule is controlled by the state. Some municipalities looked at the options provided to them – they were rather limited, you could replace one funding source with another funding source, but … the fact that it’s temporary means at the end of this experiment, you’re not sure what the outcome’s going to be. By their very nature in the way in which local governments are organized today, they’re very risk averse – maybe except as it relates to granting pension increases. … This uncertainty for a five-year time horizon probably led some not to experiment as much. I really think we ought to give them true home rule, give them a variety of different types of local options, encourage through incentives the merger of city and county governments, because right now it’s very difficult to bring together all the players and see that it’s a win-win. … Basically, we have disincentives at the current time, and no one wants to take responsibility and so therefore, nothing gets done.

I think when you see the cities that have been very progressive in development, they have been innovative and have involved the local private sector in that growth and development. Certainly you see it in spades here in Monongalia County, particularly in Morgantown, but Morgantown is still constrained because we have other municipalities operating with their own perspective, and we have a county government that has a different perspective, and trying to get everyone together is difficult at times.

— You touched on the concept of metro government. There was much talk of this in Ohio County a number of years back, but city officials in Wheeling and the Ohio County commissioners were not willing to discuss the matter. What are your thoughts?

Witt: I personally believe metro government makes a lot of sense in Ohio County, which is one of the most densely populated counties. … The only reason why we have local government is that people want certain types of services that are not provided by the federal and the state. The one thing that we really have working against us in West Virginia is the fact that we believe, at the state level, that everyone ought to have the same level and amount of local services, when in fact willingness to pay, and taste and preferences vary amongst communities. One size fits all does not work well in the complex economy that we have today.

— Sticking with the state’s one-size-fits all plan. One your areas of expertise is in the financing of public education. Here in West Virginia, the defining public school funding measure has been the Recht decision, issued 30 years ago by retired Ohio County Circuit Judge Arthur Recht. In your opinion, has the model set forth in that decision been a success?

Witt: The problem in the Recht decision was that it was designed to treat all systems equally in terms of the amounts expended by individual students, regardless of whether they were in urban or rural environments, whether they came in with a lack of educational attainment because of previous experiences or whether they were really truly stellar students. So they nature of equality of funding on the input side does not guarantee the resulting outcomes on the output side in terms of student success. Increasingly you see changes … when you look at other states in terms of providing funding based on outcome-based measures. And if the outcomes are not adverse, then you figure out where the problems are and you allocate more funds, and if the outcomes are right on target, you don’t have to spend those monies.

Individual’s tastes and preferences toward education also vary considerably around the state. You have some regions of the state that have low levels of educational attainment, and I suspect although some families there would want more for their children, their level of expectations in terms of educational experience their children would receive is far different from someone here in Monongalia County whose parents may be associated with the university, and they have high expectations on their child succeeding and going forth into a profession. We need to tailor our system more toward one based on outcome-based measurements, and probably more consolidation across counties. We’ve done studies with the Legislature on public school finance, and of course what you have are 55 independently operating school systems which don’t generally share resources. Why does a school bus have to stop at the county border, turn around and go back? Why are we not pooling our transportation systems across counties more to take advantage of economies of scale? We need to really think more about that, and I think the recently released assessment of the school systems that was initiated by Gov. Tomblin is a step in the direction of basically redrawing our public school system and seeing where we can really achieve some successes, because on national measures, we are at the bottom. … That tells you something’s broken.

— Many of West Virginia’s most economically diverse counties are its border counties. There has been some talk over the years in the Northern Panhandle about county commissions from Ohio and West Virginia working together on economic development. Do you see that as a good idea or a bad idea? What can be done to help those border counties tap into the economic engines in states such as Ohio, Pennsylvania and Virginia?

Witt: We have to recognize that these political boundaries are just that, they’re not economic boundaries. They’re political boundaries within which the respective elected and appointed officials have to provide certain levels of public service. I think when you look at economic development, you have to look at it as a collaborative effort on the part of all the parties that are associated here, because really the benefits accrue to the broader community. For someone who lives in Uniontown, Pa., and commutes down to Morgantown, certainly it makes an economic contribution to Morgantown but it also increases the viability of a place like Uniontown. We have a lot of this cross border commuting. In fact, in Monongalia County, one out of every four workers comes from outside the county. … We have to get beyond the parochialism of thinking about how do I simply get jobs in my … political boundary. It’s jobs in the region that really count. And when employers are looking for new site locations, they look at the natural commuting patterns of the pool of individuals that they would want to employ in that area. They don’t look at a specific county and how many people live in that county. And sometimes I think we have too many blinders thinking about we only need to look at the people in our county. If we look at most of West Virginia’s counties, they have an inadequate population base to support economic development in terms of new manufacturing. But when you look at it on a regional basis, and you look at the distance people are willing to commute, it paints a different picture in terms of the labor availability and the willingness of employers to move into an area to take advantage of those job skills.

— Royal Dutch Shell has announced a site in Monaca, Pa., for its ethane cracker plant. That location is in close proximity to the Northern Panhandle. How should developers in the region look to take advantage of this plant?

Witt: The important thing about the cracker being located in this general area is it’s being located in this general area. The cracker’s going to need certain types of ethane feedstocks for them to efficiently break it down into the resulting petrochemical product, but it’s the downstream opportunities that are created – and they can be serviced through either pipeline or barge on the Ohio River or even in some cases trucking – to plants that are in close proximity (to the cracker). … If I were the state of West Virginia, if I were the local economic development organization …. I’d be trying to get a better understanding of the downstream opportunities and making sure that I have the available sites that could accommodate those types of activities. Luckily, the Northern Panhandle has been one of our industrial sites in West Virginia. … It has a workforce and site locations that are really acceptable if we can make sure that we identify and promote those locations for the downstream users of that ethane cracker. So I think the opportunities are very positive.

— What possibilities does the Marcellus Shale hold for the state’s economic future?

Witt: One of the things we see in West Virginia is coal production is declining. With the advent of cheap natural gas, we’re seeing the utility consumption move toward gas generators and away from coal generators. And as long as natural gas prices remain low, that’s going to be a driver effecting the level of coal demand. … I think we’re going to continue to see this game-changing view of the energy industry in which natural gas prices will not always be at the low levels they are today, but they’re less volatile. … That’s going to put a very positive long-term perspective for the growth of natural gas as a feedstock, as an end-user stock, possibly with a great advance in the transportation industry as we get into compressed natural gas vehicles.

In the Ohio County area and over into Pennsylvania, you have the wet gas, and you’re also finding that fracking particularly in the Utica Shale is yielding oil. Unfortunately, the problem we see right now in oil markets is that oil is trending down. … That’s starting to put some damper possibly on oil exploration using fracking. … It’s been announced because of fracking in North Dakota, they’re now the No. 2 oil producer in the United States. One of the advantages of all this development is we are rapidly moving toward energy independence. … I view this as a very positive area for additional growth and development, and I think astute development organizations are going to be trying to attract in those ancillary businesses that service those areas.

— In your opinion, has the state done enough to diversify its economy over the past 30 years?

Witt: The West Virginia economy has gone through some diversification, but we still have some degree of dependence upon our natural resources, in particular coal and natural gas. But we’re probably better prepared today than we were 20 years ago. The employment has declined over a long period of time directly in the mines, and in the extraction of oil and natural gas until recently. But the rest of the sectors have tended to grow.

The problem we see in terms of long-term growth and development of the West Virginia economy is our human capital stock is not adequate to really accommodate the needs of business and industry today. We have low levels of educational attainment, low labor force participation rates, the oldest average age population. … This is not the basis on which you grow a modern economy. Modern economies … today are young, bright, hard-working people that basically have the types of skills and flexibility that employers want. We do not have that in many parts of West Virginia.

One of the challenges we’re going to have going forward is how do we attract and retain young talent in the state. Efforts like Generation West Virginia is one way of doing that, but recognize that’s only going to work in areas of the state which have … the quality of life and opportunities that attract young adults. That’s why Morgantown has been so successful. Some would say it’s because of the university, but Mylan Pharmaceuticals is here and they provide over 2,000 jobs. We have other manufacturing firms, we have a major power plant (Longview) that was … constructed outside of town, close to $2 billion, that the average resident of Morgantown may not even have known about. … We have a very diversified economy, but certainly the university is the cornerstone of that.

— Up until about 20-25 years ago, Morgantown was a town that housed a nice university. Now, Morgantown is known as the home of West Virginia University – the entire town seems to identify with the school today, which wasn’t the case in the past. One, what led to the change and two, from an economic standpoint, how has that benefited the city of Morgantown as a whole?

Witt: It goes back to South University Avenue, and anyone coming to South University Avenue knew it was a slum. And we had some local business leaders … come together and develop Vision 2000. And in that community visioning process, they had different groups that came up with goals of what they wanted the community to look like in the year 2000, and in 2010. They put together a task force, came up with some achievable goals, and allocated the responsibility for carrying out those goals to a mixture of people in local government, WVU, and the business sector. As a result of that, I think you saw the development of local leadership that led to a major change in this community. You have all this growth and development along South University Avenue that was not here 15 years ago. You have major transportation planning … and initiatives, such as a regional bus system that all WVU students, faculty and staff can ride free of charge, because the university contributes a certain amount of money to that. … You had a lot of collaboration that was very effective, and they achieved goals that were achievable, not pie in the sky. As they achieved these goals, they set new goals and proceeded accordingly. I think that kind of collaboration at the local level is essential for success.

— Should other cities in West Virginia use this example as a template for success?

Witt: They have to figure out what they want to be, where they want to go, come up with achievable goals, assign responsibility, have accountability, if resources are needed identify where those resources are going to be found. Don’t necessarily rely on Charleston to figure out what your community should be, you’re better off and better aware of what you want it to be. If you choose not to grow, if you choose to stay the same, that’s what you’re going to live with. Where people see they want better opportunities for their children, for their neighbors, they need to get some skin in the game. They just can’t sit back and snipe at everyone because things can’t get done. They can get done. And I think Morgantown is a good example of that.

— Final question: other than Morgantown, what areas of the state do you see as engines for growth in the coming years?

Witt: I think you’re going to see in some of the more rural areas of our state a hollowing out of the population. One of the reasons people went to McDowell County … was simply because of the coal industry, and when the coal industry evaporated people voted with their feet. We’re going to see the area around Fayetteville grow and prosper with this major announcement of the Bechtel Summit (Family National Scout Reserve). That’s going to be a real catalyst for growing hospitality and tourism, but also ancillary businesses from entrepreneurs, possibly high-tech entrepreneurs who want to live in a rural setting that has a lot of outdoor adventure opportunities. … The Eastern Panhandle is going to continue to grow and develop, and I still think the Northern Panhandle of West Virginia will continue a turnaround, it’s been slow in coming. I think there’s a sweet spot there, proximity to the Pittsburgh airport, you see growth patterns … around Pittsburgh being to the north or to the west. … You have transportation networks, you do have some flat land up there, and these are things that not a lot of parts of West Virginia necessarily have.