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The services taxes fund

September 08, 2005

West Virginia Gov. Joe Manchin has offered legislation that would give every state employee at least a $900 raise, while teachers, state troopers and some other correctional and juvenile services workers would get $1,350.

The governor is also pledging $93 million toward the unfunded liability of the state's pension funds and is asking for a reduction in the state's food tax from 6 percent to 5 percent.

Republicans are pushing for the total repeal of the food tax this year, but aside from some rosy predictions about this year's revenues, no one is saying how the state would replace the $150 million in revenue that it brings in.

The total elimination option is being pushed by Don Blankenship, chairman and CEO of the Massey Energy Co., who put together a $500,000 ad campaign calling for immediate repeal.

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If Blankenship's name sounds familiar, it's because he was the driving force behind the defeat of a bond issue that would have stabilized contributions to the state's pension funds at $350 million a year.

With no bond issue, the payments, required by the courts, will balloon to $750 million by 2034.

In June, after the bond issue proposal was defeated, we called on Blankenship to offer a plan to replace the revenues the food tax brings in. So far, we haven't heard anything.

Nobody likes to pay taxes, but without sufficient revenue to pay them a decent wage, the state's teachers, especially those in border counties, will continue to be lured to other states by the prospect of higher pay.

The same goes for other state employees such as police and mechanics. Under the current salary situation, West Virginia taxpayers train them, then watch them leave the state. Then the cycle begins all over again.

The argument in favor of lower taxes is that the more money that is in circulation, the faster the economy will grow. But there is also an argument to be made that if the government doesn't provide basic services delivered by skilled people, more residents will decide that there is no future in the Mountain State.

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