Economy Story Archives - Page 167 of 167 - West Virginia Public Broadcasting

State falling short in revenue collections for FY 2014

Newly appointed Secretary of Revenue Bob Kiss and members of his department presented an overview of last year’s budget to lawmakers. Legislators…

Newly appointed Secretary of Revenue Bob Kiss and members of his department presented an overview of last year’s budget to lawmakers. Legislators scrutinized the governor’s last minute decision to cut almost $18 million from Medicaid to balance the budget at the end of the last fiscal year, but they were also given some crucial insight into the revenue numbers for this year.
To fulfill his Constitutional duties in balancing the state budget, Governor Tomblin cut the state’s Medicaid program by nearly $18 million at the end of the Fiscal Year 2013.

But where that money went is still in question by some lawmakers, including House Minority Whip Daryl Cowles. He questioned Secretary Kiss during a Joint Committee on Finance.

“What was that money spent on? If we appropriated it to Medicaid, what was that money spent on?” Cowles asked.

“It wasn’t spent on anything. It didn’t exist so to speak. So, the budget had to be cut to make sure you finished the year with a balanced budget,” Kiss responded. “That $17 million didn’t go any place.”

So, it wasn’t spent. Kiss explained the governor made the total Medicaid budget smaller than what the legislature had appropriated for that year in order to keep West Virginia out of the red.

But that last minute cut wasn’t the only time Medicaid had been shorted in Fiscal Year 2013.

The fiscal year ended before a funding bill passed by the legislature for the program could take effect. That bill would have taken $67 million out of excess lottery funds and put them toward Medicaid.

Regular lottery funds were down last year as well. Of the $50 million dollars from that fund that is dedicated to Medicaid, only $29 million actually came in, adding another $21 million to the program’s deficit.

In total, Medicaid was shorted about $109 million in Fiscal Year 2013.

Director of the State Budget Office Mike McKown said for now, the program is financially stable.

“Medicaid’s cash flow is pretty good right now, but by the middle of probably March if we don’t appropriate some money to Medicaid, there’s going to be some cash flow problems,” McKowan said.

“On the last day of the fiscal year we didn’t really have many options to balance the budget. If we had not cut them the last day, nothing would have gotten re-appropriated which would have caused some major problems for some of the agencies and we felt that the cash flow was strong in the Medicaid program for a few months so that was the reasoning behind that.”

Secretary Kiss reassured the committee the emergency $18 million cut to the program’s funding is not a permanent one. The legislature will be able to restore those funds and the $67 million dollars appropriated from lottery funds is still in the state accounts to be put toward the program.

But Medicaid isn’t the only state funded program feeling financial woes. A letter in early August from Kiss and Tomblin asked state agencies to prepare its budgets as if it were taking a 7.5 percent cut. For the second year in a row.

Tomblin stressed this was a precautionary measure, but three months into the Fiscal Year, McKown said revenues are already below estimates.

“At the end of August, after two months into this fiscal year, we were down $32 million for estimate,” he told the committee. “So, this year started off not strong, but we’re keeping a close eye on that.”

McKown did bring some good news to the committee. He said budget cuts have been made without having to furlough or lay off any workers, the state has kept up with retirement contributions and the bond rating is still very good because of a strong Rainy Day Fund, ranked one of the top five in the nation.

Currently holding about $907 million, McKown added that fund, however, is not enough to fall back on. If the state lost all sources of revenue, the Rainy Day Fund could only sustain state spending for an additional two and a half months.

DHHR Secretary stays focused on filling 600+ vacancies

In her first appearance before legislators, Department of Health and Human Resources Secretary Karen Bowling said the department is not yet prepared to release a detailed response to a performance review completed earlier this year. Instead, she shared some generalizations about major issues the department is trying to address. The biggest of those issues is hiring and retaining the necessary personnel to run the state’s largest agency.

Called a fragmented department with duplicative programs seeing little results and a lack of a strategic goal-setting vision, the performance review released in April of the Department of Health and Human Resources was less than positive.

Completed by Pennsylvania-based consulting firm Public Works, the report is still in review by the DHHR and its new secretary, Karen Bowling.

On the job since July 1, Bowling admitted she’s still trying to digest the 116 pages, but was called on by the Legislative Oversight Committee on Health and Human Resources Accountability for an update during interim meetings at the Capitol.

“I’m not sure that we would ever have enough hours to present 78 recommendations, but I think just the idea of just some of the most important points in that Public Works report,” Bowling said Monday, “I wanted to make sure I emphasized those and talked about those so everyone could understand the direction in which we were going.”

But moving any direction is proving to be a slow process for the state’s largest agency.

With more than 630 vacancies, Bowling said one of the department’s top priorities is trying to fill those positions. Public Works accounted those vacancies to an “unstable work environment,” which lead to a turnover rate of 30 percent and an additional $7 million in mandatory overtime pay last year.

“Part of the turnover rate and part of the vacancy rate and part of the overtime issues are not being able to fill the jobs quick enough. Part of it is getting qualified people into the jobs fast enough and getting them oriented and ready to go,” Bowling said.

“We, the DHHR, will have to work with other areas to make sure that we change the process to the extent that we can so we can move quicker on filling vacancies.”

So to address the problem, Bowling said the DHHR is beginning to work with the Department of Personnel and the Department of Administration to try to streamline the hiring process.

Senator Ron Stollings, the committee co-chair, said that high turnover rate comes down to those on the front lines—social workers in child protective services or other areas—being overworked and under paid.

“Unfortunately, we probably don’t pay these front line workers competitive salaries and we haven’t hired,” Stollings said. “There are so many vacancies so the ones that are working are working so hard and I’d say there’s a very early burn out. So when there’s something better that comes along in a private arena they leave.”

Aside from streamlining the hiring process, Bowling said they’re looking at other factors like mentor systems and managerial training to create a better work environment and reduce the turnover rate.

On other issues, however, Bowling responded with broader answers. She said the department isn’t prepared to talk specifics for many of the areas of the complex review until they complete an internal self-study.

That answer seemed to be acceptable for the committee and Bowling will return in December to present more concrete, specific examples of how the department is making changes.

There was one question, however, Bowling was prepared to take a stance on. A position brought up by Delegate Don Perdue, who serves as co-chair of the committee, to break the DHHR into separate entities, one dealing with human services, the other with Medicaid.

“That was one of two suggestions that have been made periodically over the last 16 years that I know of. Each time, each time the Department has said, no, we don’t want to cut it a part into health and human resources, we don’t want to take out Medicaid, we don’t want to do anything like that,” Perdue said during the meeting, “and yet, Madame Secretary, our statistics are not changing. They’re getting worse.”

“I am really concerned that if we continue to gather all these chicks into one nest, they are going to be some that suffer and that’s what’s happening now in my belief. I hope you can prove me wrong.”

Bowling said she believes she can. She stood behind her predecessors, but said the DHHR can be more successful than it is today under her leadership in the future. The Secretary said she can help the department achieve the outcomes Perdue wants to see.

“My belief is that actually further integration and breaking down silos. You know, bureaus can get stuck in silos and I think breaking those down will actually improve efficiencies and will give us a greater opportunity to make positive change in the state,” she said.

“My job will be to show statistically that I can make that happen through leadership and maybe through some changes in organizational structure and management and then maybe Chairman Perdue will see that change in years to come and agree with me.”

Most of those changes Bowling believes can be made internally without much legislative action needed, but Stollings said he stands firmly behind the department and is prepared to support any legislative action that may be necessary to help turn the DHHR around.

How tough is it to start your own business in WV?

The West Virginia Small Business Development Center showed a crowd of entrepreneurs and business owners how technology can help tackle small business needs.

In the third of five planned workshops throughout the state, the West Virginia Small Business Development Center walked entrepreneurs through the process of beginning their own business. This workshop focused on the necessity of technology to make it in today’s market. Justin Gaull is the Technology Commercialization manager for the Center.

“An SBDC business coach works to serve as a connector so we help the entrepreneurs in West Virginia find resources that they can use to move the businesses or their ideas forward. We also serve as a coach and help them through the leadership and strategy issues of their business and also on a personal level is business right for me,” Gaull said.

Gaull said begin the tackling the tasks of starting a business. Last week’s session focused on everything from the early stages of development justification for innovation, how to analyze the market for the product and how to get to the level they want to attain. Gaull said the process can look like a mountain to climb at the beginning.

"It sometimes appears daunting to try to get in and try to commercialize some new product or technology and what we try to do is walk them through that visionary process that is sometimes negated in the very beginning," Gaull said.

“It sometimes appears daunting to try to get in and try to commercialize some new product or technology and what we try to do is walk them through that visionary process that is sometimes negated in the very beginning. Someone has a great idea and they bring that prototype into the office and they’re ready to move forward from that point and sometimes that’s not the best thing and sometimes that’s not the best move, sometimes they need to back up and ask those key questions,” Gaull said.

Pryce Haynes of Huntington attended the conference with the idea of using college logos on different kinds of merchandise. He said it definitely seems like a larger undertaking.

“I think right now we’re opening a can of worms if you will, you look at the business model and maybe there are five steps or however many steps there are to it, well each step contains 30 more steps, so on and so forth. So there are a lot of angles and things to consider along each step of the way,” Haynes said.

Tom Minnich is the Director of Special Projects and Business Development with the Robert C. Byrd Institute in Huntington. RCBI is a non-profit training service that provides small businesses access to what they need to continue developing their business. The institute serves as co-sponsor of the workshops. He says the workshops are essential because many people that come to them with ideas aren’t prepared.

“There is people out there that did not do their homework and did not do their searches, they have an idea, but the sister product is already out there on the street and then some people come in with a real realistic idea, but they don’t know how to get to the next level with it, it’s still in their head and not reality,” Minnich said.

Previous workshops were held in Bridgeport and Charleston and the next two will be held in the eastern panhandle and once again in Bridgeport.

Innovators, entrepreneurs, policy experts meet at economic conference

With coal industry jobs dwindling and many young people leaving the state to find work, speakers at the Bright Economic Future for the Mountain State Conference in Charleston outlined many of the challenges for the state’s economy. Even despite these obstacles, many entrepreneurs, policy experts and grassroots organizations who gathered at the conference said they see plenty of opportunity.

“What I’m learning is that people really, really are interested in having this conversation about what our future looks like. I think that people—I think we see really strong support for the idea of diversifying our economy,” said Jeremy Richardson, a Fellow with the Union of Concerned Scientists.

Although his organization usually focuses on issues related to climate change and renewable energy, Richardson noticed the need to apply those issues to the state’s economy and helped organize the Bright Economic Future Conference.

West Virginia Center on Budget & Policy Executive Director Ted Boettner says a diverse, healthy economy ultimately comes down to a healthy and financially stable workforce. But, he said, the state has struggled with that in recent decades.

The graph shows the average wages for West Virginia workers from 1969 to 2011.

“Back in the late ‘70s there was a time when middle-class families were fairing pretty well. Our wages were a little higher, more people had benefits, you could raise a family on one income. Those times have dramatically changed,” Boettner said.

“Now you need both people in the workforce, you’re making less, and you’re working more hours. At the same time you are unable to afford some pretty basic expenses like healthcare.”

During a panel focused on the potential of moving the economy forward, Kent Spellman of the West Virginia Community Development Hub noted that his organization believes that working directly with people in small communities is the key to improving the economic picture.

“We really believe, frankly, that economic transition—this is a great group of people—but, for it to work, we have to get out in our communities and we have to listen. The Hub and the work we do with smaller, rural communities—and we mostly work with smaller, rural communities—focuses on wealth creation, not job creation. We want to see communities create opportunities—economic opportunities—that are locally based, that are placed based, that keep the wealth in the community,” Spellman said.

Both Richardson and Boettner echoed Spellman’s call for a grassroots-oriented, localized push for the diversification of the state’s economy. Richardson said that means it’s up to each community to play a part in deciding how they can contribute to the state’s economic future.

“I think it depends on where you are. We were just listening to one of the commissioners of Fayette County who was talking about all of the wonderful opportunities they have taken advantage of there,” he said.

Richardson also pointed to business projects in unlikely places, such as Sustainable Williamson in Mingo County—right in the heart of an area known as the Billion Dollar Coalfield.

“I think it depends on your location to some extent. The message that I’m trying to get out there is that we need to expand peoples’ idea of what’s even possible,” he explained.

Other presentations at the conference included Richardson’s discussion of sustainable economic development, a lecture from Boettner on the proposed state Future Fund, and a screening and discussion of the interactive film Hollow, directed by McDowell County native filmmaker Elaine McMillion.