Gov. Justice on first 10 months in office: "I think we’re just really starting on our way"
By RUSTY MARKS
The State Journal
CHARLESTON, W.Va. — Throughout his 2016 campaign, West Virginia Gov. Jim Justice said it would take him about 10 months to put the Mountain State back on the road to recovery.
Ten months into his term, Justice’s predictions might not be far off, even if things didn’t always go as the governor planned.
“In my life I try to put everything into 10-month windows,” Justice said from behind a massive wooden desk in his wood-paneled office at the state Capitol. “I can’t see beyond 10 months; that’s how I operate.”
“We’ve taken money out of (the) rainy day (fund) to the point where our bonds are being de-rated,” Justice said. Coal severance taxes were at their lowest level in years, and lawmakers had no real plan for generating extra revenue.
Justice said he saw only two ways of balancing the state budget.
“One is to take a meat axe and start cutting to the bone,” the governor said. The other was to come up with some sort of short-term revenue measures to “buy some time” until Justice’s grander plans could start bringing money into the state.
Justice proposed a series of temporary tax increases, combined with some modest budget cuts, to tide the state over until his plans for a massive road building program could start to bear fruit. The governor had decided that tackling West Virginia’s neglected road system would put thousands of people to work and spur economic growth.
Lawmakers didn’t necessarily see it that way. Throughout the 60-day regular session of the Legislature and into a drawn-out special session, Republicans and Democrats wrangled over some tax increases, no tax increases, income tax reform and massive budget cuts.
Justice, elected as a Democrat, thought he could get the Legislature’s Democratic minority to stand behind him if he could talk enough Republicans into signing off on his temporary tax increases. It didn’t happen.
“At the end of the day, the Dems said no,” Justice said. “When the Dems said no, the whole house of cards fell.”
In the end, lawmakers passed a budget based on the assumption that the rebound of the coal industry and road construction activity would bring in about $129 million in new revenue. The majority of Justice’s revenue ideas fell flat.
With the failure of Justice’s initial plan, the governor decided to try a different approach.
“When everything went haywire and we lost everything we lost in the (legislative) session, I knew right then what I probably had to do,” Justice said. “I’m not going to do that again. I’m not going to run that same play.”
Justice switched his party affiliation from Democrat to Republican. The change not only put him in better graces with the Mountain State’s Republican majority, it also helped Justice’s access to President Donald Trump, whom the governor has said he knows personally.
Things went more smoothly after that. Justice called the Legislature back into special session and fairly quickly got lawmakers to pass a series of increases to DMV fees, combined with a hike on the tax for wholesale gasoline, intended to fund the governor’s $3 billion road construction program.
He then went to voters for a constitutional amendment allowing the state to float a $1.6 billion road bond to pay for the work.
“Everybody said that it was impossible to pass,” Justice said. Lawmakers told him to wait until the road bond passed before raising the taxes and fees to pay for it.
“I knew exactly what I was doing,” Justice said. With the taxes and fees already in place, “you’re going to pay the taxes anyway,” he said.
“You either want your roads fixed or not,” he said. “You’ll either have the new jobs or not.”
Justice predicted the road bond would be approved by an overwhelming margin. It passed with 73 percent of the vote.
Several of Justice’s predictions have turned out to be accurate.
“Our metallurgical coals are the best coals in the world,” Justice said. He said he thought steel production — which requires metallurgical coal — would start to increase, and it did.
He also predicted a rebounding of the state’s coal industry. “I felt that severance taxes on coal were really going to move, and they did,” he said.
The latest feather in his cap is a recently announced $83.7 billion memorandum of understanding signed with a Chinese energy company to develop the Mountain State’s petrochemical industry. Justice was aware that negotiations with the Chinese were ongoing, but considered a deal a “long shot.”
Then Trump started complaining about the trade imbalance with China. With the president planning a trip to Asia, Chinese officials saw an opportunity to help even out that imbalance.
After more negotiations, the Chinese agreed to make West Virginia part of a $250 billion U.S. investment commitment.
“We have two cards that are going to make this a reality,” Justice said.
“Donald (Trump) is not going to let West Virginia get shafted, and Donald is not going to let China off the hook on this trade imbalance.
“Do I know it’s going to be $83 billion?” he asked. “No. But I know it’s going to be a lot of money that’s invested here.
“If even $1 billion gets invested, it’s two Procter & Gamble plants,” Justice said. “The magnitude is off the charts.”
Justice said there is still work to do, particularly in improving the state’s education system.
“It’s been viewed in the past like it’s a necessary evil that we have to fund,” the governor said. “We’ve never looked at education like it’s an economic driver.”
Justice predicts that within the next three years the changes that have begun in the state will start paying off.
“We’ve been conditioned to be beat-down,” the governor said, “and we’ve accepted it.
“I think we’re just really starting on our way,” he said. “In the next 2.5 years, we’re going to see this state on the cover of the Rolling Stone.”