After Rough Patch, Justice Gets Break
Gov. Jim Justice has had a few bad weeks with the many issues facing his businesses and even being denied an opportunity to coach the Greenbrier East High School boys’ basketball team. The last 18 months of the pandemic have been no picnic for him, with the worst likely to come. Yet, last week gave Justice some much-needed good news.
West Virginia really has been lucky as far as facing few economic repercussions of the COVID-19 pandemic.
One can point to all sorts of indicators, including tax collections, surpluses and a healthy rainy day fund, but the state’s unemployment system tells the tale. As of July, West Virginia has an unemployment rate of 5%, which is better than the U.S. average of 5.4% for July.
The state ended its participation in pandemic unemployment assistance in June, though the unemployment numbers were largely returning to pre-pandemic lows even before that. But it’s not just the employment rate that is important. Our unemployment trust fund also is a healthy indicator.
According to the U.S. Treasury Department, West Virginia’s unemployment trust fund has $101.7 million sitting in its account. On Thursday, Gov. Jim Justice announced the state had paid off its $185 million unemployment insurance loan the state took out when the fund went to zero after the influx of unemployment claims at the end of March 2020 when the economy shut down for a month.
The state used $220 million to pay off the $185 million loan, known as Title XII Advance, and to put additional funds into the unemployment trust fund. The interest-free loan was good only until Sept. 4, after which interest would start to accrue. As a result, the state will be able to reduce unemployment insurance costs by 25% next year.
“Through COVID, I wanted to protect in every way our businesses from being shipwrecked,” Justice said. “This will ensure all employers will receive a 25% decrease in their unemployment premiums in February,” Justice told business leaders at the West Virginia Chamber of Commerce’s Annual Meeting and Business Summit Thursday. “It couldn’t be any better.”
It appears some of the money came out of the remaining federal CARES Act funds, which was always a goal of state revenue leaders. Dave Hardy, secretary of the Department of Revenue, explained to lawmakers last winter the reason the state was still holding onto nearly half of the $1.25 billion in CARES Act funds in case the day came when the interest-free loan wasn’t extended.
At the end of July, the state had $578 million in CARES Act funds left, according to the State Auditor’s Office. As of the end of August, that amount dropped to $388 million, a $240 million reduction. Some of that funding covered the costs of the first vaccine incentive lottery.
Speaking of COVID-19, public opinion appears to be on the governor’s side as to his handling of the pandemic in the age of delta and his overall job approval is the highest of any state official or institution.
According to the WV MetroNews West Virginia Poll conducted by Research American poll guru Rex Repass between Aug. 20-25, 71 percent of respondents were satisfied with Justice’s current pandemic response, with 43% saying they were somewhat satisfied and 28% saying they were very satisfied
There are obviously loud voices amplified by social media on the left and right who probably disagree. The left wants indoor mask mandates for public places and schools brought back. The right (traditionally the party of smaller government) wants to use the power of the state to ban not only mask mandates at the local level, but even mandates by private businesses and groups to require COVID-19 vaccines for employees.
With Justice’s high approval for his handling of the pandemic, if I were one of the Republican lawmakers clamoring for a special session to prohibit various mandates, I’d be thinking hard as to whether there is truly support for doing that.
The same would go to Attorney General Patrick Morrisey, who popped off at the Legislature in one of his infamous late-night social media rants. House Speaker Roger Hanshaw and Senate President Craig Blair basically told him to put his money where his mouth is and asked for an advisory opinion on the legalities of vaccine mandates and vaccine passports. I have a feeling that what Morrisey wants and what the law says are two different things.
Justice also enjoys high job approval numbers. Of those polled, 61% said they approved of the job Justice was doing with 25% disapproving and 14% unsure. According to the poll report, Justice’s job approval began increasing in 2019 and continued to rise over the last two years, including during the COVID-19 pandemic.
Lastly, it appears the fight between Justice’s companies and Virginia-based Carter Bank and Trust has been put to bed and the status quo returned. Loans were coming due and the two sides were fighting over terms. The governor and his family personally guaranteed more than $300 million in loans. Both sides filed lawsuits and a war of words followed.
Now with that matter settled, Justice’s companies still have to contend with the fallout of the Greensill Capital collapse and the resulting $700 million in personal loan guarantees that Credit Suisse, Greensill’s sugar daddy, now want Justice to pay. The last I heard, those negotiations are still ongoing, but expect an agreement, especially as metallurgical coal prices are up, helping Justice be able to start repaying these loans.
To paraphrase an old quote: when you owe the bank $100, that’s your problem. When you owe a bank $700 million, that’s the bank’s problem.