Governor Jim Justice likes to go big, and he clearly did this week when he announced plans for another five percent across-the-board pay raise for school teachers, service workers and state employees and pledged another $100 million dollars to the Public Employee Insurance Agency.
The pay raise, if approved by the Legislature, will mean salaries will have gone up ten percent in two years, while the cash deposit to PEIA should keep premiums and out-of-pocket costs to plan members steady for the next two years.
The pay raise will cost about $120 million, and that goes to the base budget so the state has to come up with the money every year. Tax collections for the fiscal year are running way ahead of estimates–$120 million for the first quarter—so theoretically the state has enough additional money already to pay for the raise.
The state also has a carry-over of $58 million from the previous fiscal year, so that’s enough to cover the first year of the two-year installment to PEIA. Justice said he’s committed to improving education and the money is there.
The state has additional money because the economy is improving, largely due to growth in the natural gas industry, manufacturing, construction and mining. Justice expects the growth to continue, but economies have highs and lows. Basing a significant increase in baseline spending on a one-quarter surplus is risky.
Politically, the timing is perfect for Justice and the Republicans. It takes away a wedge issue Democrats and labor unions have been using to energize voters. It’s true that Justice and Republican leaders were slow to embrace a significant pay raise for teachers, prompting the nine-day statewide strike. However, they did eventually approve the raises and now they have doubled down with another raise proposal.
Labor’s response has been to question the timing and Justice’s sincerity of the pay plan, while reminding voters it took a historic strike to get the last raise. It’s also evident that labor leaders don’t trust Justice to make good on his promise. Teachers are still wondering why there is no long term solution to PEIA.
However, the teacher unions run the risk of sounding churlish if they complain too much.
Justice has rightly pointed out that when there is a budget surplus, every agency and department is reaching in the pot for a share. With his announcement this week, Justice has let it be known that education is THE top priority, thus tamping down expectations for spending elsewhere.
Instead of carping about the Governor and the GOP, the union leaders should join with the Governor and legislators to help ensure that what is promised before the election actually becomes law when the Legislature meets starting in January.