Mountaineers are Always Free… and Dependent

We West Virginians like to think of ourselves as a self-reliant bunch. The state motto, Montani Semper Liberi, which translates as “Mountaineers are always free,” suggests an engrained independent spirit.

You will often find a streak of antipathy toward the federal government among West Virginians. The state voted overwhelmingly twice for Donald Trump, who campaigned on the promise of “draining the swamp” in Washington.

The reality, however, is that West Virginia has a deep dependence on the federal government.  In fact, the 2022 edition of SmartAsset ranks West Virginia ahead of every other state in federal largess.

Greg Stone wrote about this in the Gazette-Mail earlier this week.

“No state is more dependent on the federal government than Weet Virginia, which gets 45.16 percent of its revenue from federal sources (the 10th-most).  West Virginia receives 2.36-times more revenue from the federal government than its residents pay in income taxes, the third-highest ratio across our study,” SmartAsset reports.

Add in the finding that four percent of the workers in the state are employed by the federal government (7th most) and their earnings are twice what workers in the private sector earn. Those four statistics rank West Virginia at the top of the transfer list.

These transfer payments run the gamut: health care programs, Social Security, unemployment, disability payments, Supplemental Security benefits, welfare programs and payments. Economic Research from the Federal Reserve Bank of San Francisco reports that, collectively, these payments and programs represent a great redistribution of wealth to provide equity among the states.

“Federal income taxes are proportional and progressive… The federal government tends to take more in tax revenue per capita from higher income states. In addition, the U.S. government tends to transfer more funds to individuals and governments in lower-income states through federal safety net programs,” the report said.

Thus, West Virginia, as a poorer state, gets back from Washington much more than it pays in.

Invariably, the statistics prompt the chicken-or-the-egg question: Do the greater transfer payments help sustain a large percentage of the population in a poor state or have a great number of West Virginians become dependent on the federal government?

That is a tough policy question that is not given to a simple answer.

The benefits clearly help tens of thousands of West Virginians with basic needs, and in the case of Social Security, it is an entitled benefit from a program that individuals have paid into during their working lives.

However, while transfer payments help keep the wolf away from the door, they are not dynamic economic engines. Yes, they help sustain local economies—the grocery store, the local bank or landlord, the car dealer, the doctor’s office—but they are not investment dollars that lead to economic growth.

John F. Kennedy, during a campaign stop in Charleston 62 years ago this month, spoke of the character of Mountaineers. “The people of West Virginia are proud and independent people—typical of the best of American life,” he said. “But they do want a chance to work, a chance to earn a decent living.”

Over a half a century later, West Virginia is still struggling to fulfill that destiny and finally become what we have always imagined ourselves to be.

 





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