By Stephen Smoot
Last week, Governor Patrick Morrisey took to the podium for the first time as chief executive of the State of West Virginia.
Morrisey opened by greeting statewide officials both experienced and newly elected, as well as a Japanese diplomatic delegation invited to observe.
He then thanked “everyone in State government who makes this place tick.”
One of the dominant and recurring themes on Morrisey’s address centered on opportunity and prosperity. He opened by sharing that when he speaks at the American Legion’s Mountaineer Boys State Conference annually, he always asks who will attend college. Morrisey follows that by inquiring how many expect to work in the Mountain State when they graduate.
Whikle almost all, Morrisey states, raise their hand at the first question, about one on five do so with the second. He remarked “we’ll only really know we’re successful when every one of those kids raise their hand.”
“We are, and always will be, America’s energy state,” asserted the Governor.
With the Biden Administration and an often hostile United States Environmental Protection Agency in the rear view mirror, Morrisey expressed that West Virginia energy reserves can both provide prosperity for the Mountain State and help America keep and even expand its edge against Communist China.
Morrisey then brought up an issue discussed late last year in a Seneca Rocks Regional Development Authority meeting in Franklin. Board members and officers heard a presentation outlining the need for more West Virginia energy to power data centers. The needs of artificial intelligence use, research, and development require much more electrical power than the United States currently produces.
Moreover, West Virginia currently supplies most of the power to the world’s largest data center hub in Ashburn, Virginia. Virginia environmental regulations hinder development of added energy infrastructure.
As the Governor explains “China already generates half of the world’s coal fired power, which gives it a huge advantage in the arms race for computing power and intelligence.” Failing to expand production capacity will ensure that “China will eclipse our nation in a technological battle that will determine our national security.”
For Morrisey, “that means using even more coal and gas,” but he also gave a nod toward “utilizing our rich water resources, and developing nuclear-powered small modular reactors.
According to the International Atomic Energy Agency, these reactions have three characteristics that differentiate them from conventional nuclear power plants. They take up a fraction of the space, can be prefabricated and assembled on site, and use heat generated by nuclear fission to create energy.
They can also either supplement the electric grid or be self-contained and used for specific purposes.
Morrisey also announced the creation of the POWER Tech Center, combining the efforts of West Virginia University, Marshall, Shepherd, Blue Ridge CTC, and perhaps others as well. The acronym stands for “Powering Our Workforce through Energy and Revolutionary Technology Center.”
The center will collaborate to enhance the energy extraction and production workforce in place, support research and development, and “slash the red tape and bureaucracy that have kept our energy in the ground for far too long.” It will also facilitate partnerships with entities around the nation and around the world to help develop “the intersection between energy and technology.”
He also explained that it will “create new opportunities for the type of advanced manufacturing jobs that provide long-term economic security for the state while fostering a “vo-tech renaissance.”
The optimism expressed about the future of energy and its ability to power the state’s economy on difference fronts served as the sugar to help the medicine in the next section of the speech go down.
As diplomatically as possible, Morrisey shared the short-sightedness of State spending in recent years. “The most basic rule of budgeting,” the Governor explained, “is that you can’t spend more money than you make.”
He told that the budget that he inherited would leave the state $400 million behind in 2025 with $550 to $600 million in shortfalls every year after.
“We inherited a deep structural deficit,” he explained, then added “it was papered over with one-time money that’s now running out.”
Like some local governments, the State spent funds it only expected to receive one time on initiatives that would impose recurring expenses. For example, some county school systems used American Rescue Plan Act funds to pay for added employees with no provision for providing for those salaries once ARPA monies ran out.
Prudent government entities used that money for one time expenditures, such as maintenance or major purchases.
Evidently, the State did not follow that guideline.
Morrisey ruled out tapping into the $1.3 billion Rainy Day Fund, saying it must be kept for “the most severe of emergencies,” sharing examples such as a major flood or economic depression.
Even more significant, “if you dip into this emergency fund, you begin to jeopardize the state bond ratings, which would cause our interest rates to go up.”
To attack the problem, Morrisey proposed a budget that “will not propose new ongoing programs without new ongoing revenue,” and “plan on over two percent of general budget reductions.”
In his first year, the Governor expects that “we will have even bigger challenges and some really tough choices remaining.”
One of the priorities lies in rolling back the plethora of Cabinet level departments established under Governor Justice.
Morrisey also spoke to State employees’ fears that the new fiscal restraint may leave out helping correct financial problems with the Public Employees Insurance Agency. He placed $45 million in his proposed budget to help PEIA meet its legal needs, but asked the State Legislature to help “develop short and long-term solutions to PEIA and find ways to help retirees on fixed incomes.”
He criticized the fact that “this is a problem that, quite frankly, has been kicked down the road. And now we must deal with it.”
Morrisey mentioned that lowering taxes remained on the table as an option, but spent much more time discussing how to bring “efficiency our state has never seen before.” This will focus on business relationships with government. Morrisey hopes that initiatives such as expedited permitting, especially for projects in transportation, manufacturing, and energy will help to expand the state’s economic competitive advantage vis-à-vis bordering states.
He added “we need universal licensing reciprocity” that the Governor claimed in other states “increase (d) their workforce population by thousands.” Reciprocity would allow those licenses in other states to have their credentials recognized by the State of West Virginia immediately.
Morrisey also proposed to improve state health care access by ending “big government activism at its worst.” He called for a repeal of Certificate of Need laws that require State permission to open new health care facilities and said CoN “hands over power to unelected bureaucrats and major healthcare providers who decide which communities ‘need’ new or expanded health care services.”
In his opening address as Governor, Morrisey outlined the differences between himself and the previous administration, pledging a return to restrained spending and recommitting the Governor’s office to free market reforms.
