Thursday, December 15, 2005

Parkways Authority Out of Touch - Should Be Disbanded

Prices are going up just about everywhere and for just about everything. The round of price increases was from our very own Parkways Authority. On Wednesday, in its limited wisdom, the members raised the current outrageous price for a single toll from $1.25 to $2.00. The Authority claimed the increase is the bare minimum necessary to improvements to the turnpike. A roughly 65% increase in the price of tolls, the increase occurred without a single public hearing and without any public debate.

Today, the trip from Charleston to Princeton, round trip, will cost a taxpayer $7.50. Beginning January 1, folks will be given a holiday gift of a round trip price of $12. It is understandable that costs increase over time, but the remarkable increase in the price of tolls clearly demonstrates a lack of understanding for the people who travel the critical WV artery on a daily or, perhaps, less frequent basis.

The Parkways Authority has outlived its usefulness. The Governor and the Legislature should disband the Parkways Authority immediately and eliminate tolls entirely on the Charleston to Princeton roadways. The original bonds issued to finance the highway have long since been paid and, of course, always money-hungry politicians sought new borrowing and bonds for “worthy” projects.

The short-sightedness of those in charge during the period for which the original bonds were fully paid and the subsequent re-borrowing, is clearly an issue for debate. “Open for business”, however, must be exactly that – Open for Business. Unreasonably increasing tolls does nothing to change the perception of West Virginia as a bad place to do business.

Those who frequently travel the highway from Charleston to Beckley could reasonable complain that they help finance news roads in Martinsburg so why shouldn’t Martinsburg residents help finance road projects in other places as well. Why is it that travelers of the turnpike are required solely to finance the road that is an asset for all West Virginians?

The Parkways Authority should be eliminated, the Turnpike should be placed under control of the Division of Highways, and the tolls placed on the Turnpike should be removed.

Tuesday, December 13, 2005

Thinking Outside the Box: Essential to a 21st Century West Virginia

Often folks talk about the need to “think outside the box.” Meaning, sometimes the traditional answers and the standard means of dealing with things simply won’t work for a given situation. The same must be said for West Virginia’s economy. If West Virginia is to thrive and to achieve the prosperity that its people so richly deserve, we are all going to have to think a little more outside the box.

As many of you may be aware, I was fortunate to be the Chairman of the Entrepreneurship Committee of Vision Shared. During my time as the Chairman, my committee worked to establish what has been called a “Blueprint for Entrepreneurship: A Strategy for Economic Development & Community Renewal.” The Blueprint has since been embraced by folks across West Virginia as comprising new ideas and new solutions to age old problems. One of those ideas is a patent and copyright tax exclusion for business.

Essentially, the concept is very simple. All patents and copyrights derived and registered in West Virginia would be exempt from state income taxes for a period of ten years, at which time the exemption would sunset. The goal is as well very simple – to attract and encourage new industry and research and development to West Virginia. In the typical life cycle of a patent, the road to revenue is a very long road indeed. For a period of 5 years, most patents are in what is referred to as the development phase. During that time, a company tries to recoup the investment of the development of the patent. To encourage growing companies to develop and invest in new research and development in West Virginia, it is well worth the temporary loss of revenue to provide a needed incentive.

To date, only one state in the country, Hawaii, has anything akin to a patent and copyright tax exclusion. The incentive for the Aloha State is to help business compete with the higher cost for shipping goods to the mainland United States. In West Virginia, the competitive advantage from such a program would be substantial. Competing against such economic juggernauts as Ohio, Pennsylvania, Maryland, and Virginia, a patent and copyright tax exclusion would provide the right incentive to attract the right types of jobs to West Virginia, jobs with benefits and desirable salaries and wages.

Imagine the impact to West Virginia if DuPont or Dow or Microsoft were to commit investment in West Virginia to take advantage of the favorable incentive for research and development. New technology companies moving to West Virginia and locally-developed technology companies could thrive, creating a new generation of growth, and perhaps the next Research Triangle. The spin-off to traditional industry would be substantial as well. With new technology jobs comes demand for other goods and services as well.

It is time to begin thinking outside the box. West Virginia is uniquely situated with wonderful people, a high quality of life, affordable land, and the safety of low crime rates and moderate weather patterns. Leadership must begin to lead West Virginia to a new prosperity with new ideas capable of changing the fundamental landscape of a state desperate for success. The legislature should pass and the Governor should sign a patent and copyright tax exclusion effective with the 2006 legislative term.

Saturday, December 10, 2005

WV's Real Problem is Fear: Accomplices to Failure

So often, as I travel across the vast geographic area called West Virginia, I hear that the problems with West Virginia’s economy are leadership, bad politicians, and policies that do not encourage job creation. I must admit that it is appealing to buy into the myth that the problems of West Virginia are attributable to a particular political party or a particular politician but that is simply not the case. I have come to really understand the truth of President Franklin Roosevelt's proclaimation of, "We have nothing to fear, but fear itself."

The real underlying problem plaguing West Virginia and our future is “fear.” Fear of doing that which we know must be done. Fear of doing the right thing because it is difficult. Fear of imaginary retribution from those that would seek to stymie advancement and openness. If we are being honest, the real problem facing West Virginia is getting those who know what must be done to simply do it. Ultimately, those who understand the necessary changes that must be implemented but fail to act out of fear or personal motivation are mere accomplices to West Virginia’s continued economic failure.

I cannot tell you the frustration of listening to folks in positions of influence talk about obvious solutions while at the same time failing to act upon such common agreeable knowledge. At the end of the day, neither the Republican nor Democrat parties are responsible for West Virginia’s pitiful economic climate. In fact, no single politician is responsible for our sense of urgency to do better and compete more effectively. Like a cabal of “yes-men” around a powerful leader, those in positions of influence in West Virginia continue to hide their heads in the sand, avoid speaking the truth, and blame others for the failed economic past of West Virginia and the diasporas of future citizens to find solace in other, more friendly confines. Politicians, however, come and go but those in positions of influence remain for generations as the real power behind representative government.

Often politicians are viewed as the leaders and the standard-bearers for society. In fact, most politicians are truly little more than great followers. They follow what they believe will lead to their continued representation of the people – meaning reelection. That means saying what others want to hear and leading public policy to the path of least resistance. Unfortunately for West Virginia, that pattern of conduct has resulted in the continuation of failed policies of the past. All while those who have influence stand back and chide the failure of politics and politicians generally.

Business leaders and those who have influence in our communities know what needs done to improve West Virginia. Civil justice reform, reduced taxation, encouragement of small business and entrepreneurship, reductions in the size of government, and a more effective system of education – everyone agrees. Virtually no one, however, is willing to stand-up and do what they themselves know must occur. Instead, as the bank is being robbed, those in positions of influence stand watch, keeping the car warm for the quick get-away while blaming only the robber for his actions.

The leaders in our business community must become better leaders. They must no longer cower to fear. Thank goodness that these same folks were not the founders of our nation. As you may know, our forefathers pledged their lives, fortunes, and sacred honor to forge this remarkable nation. I wonder how many of our influential community and business leaders would be willing to do the same today? I suspect not many.

Those with influence in our communities must no longer stand by silently but, rather, stand together, collectively, to move West Virginia in a more positive direction. Our continued failure is on their heads, collectively, for not doing what they know must be done. The people of West Virginia deserve better and those who choose not to do the right thing based on fear or personal motivation would, ironically, find a stronger, more vibrant West Virginia would work to their advantage as well. Let those of influence be accomplices to failure no more.

Tuesday, December 06, 2005

Immigration Crisis

This year alone, more than 4 million illegal immigrants are anticipated to cross the border between Mexico and the United States – more that twice the population of West Virginia. By most estimates, there are more than 11 million illegal immigrants living in the United States. Given the war on terror and the need to better manage the borders of the United States, we must do more to reduce and eliminate illegal immigration in favor of easier, more reasonable limitations on legal immigration. A nation that “put a man on the moon and a rover on Mars” surely is capable of sealing its borders.

Already, the states of New Mexico and Arizona have declared states of emergency as a result of the immigration crisis. The Administration has proposed the hiring of an additional 1,000 border patrol and plans to utilize high-tech surveillance to reduce the surge of border crossings. The response, however, is too little, too late. It is time for the United States to utilize a two-prong approach to securing America’s southern border – (i) the construction of a proposed $8 billion wall to be built along the Mexico-U.S. border, and (ii) a crack down on businesses that hire illegal immigrants, thereby drying up the jobs that lure people in the first place. Remediation efforts less stringent will simply not stop the influx of illegal immigrants into the United States.

Today, the 2,000 mile border between the United States and Mexico is lightly patrolled and the penalty for an illegal is merely the threat of being arrested and sent back to Mexico. Arresting people and letting them go, so they can just sneak back into the United States, is little penalty for those who would attempt break the law to become part of what is a ‘nation of laws.’

Additionally, American businesses that undermine immigration laws by hiring illegal immigrants or maintaining illegal immigrants on their payroll should be fined and forbid from competing for U.S. government contracts. United States companies cannot continue to be accessories to growing the number of illegal aliens within our borders. Instead, Congress needs to redefine and more reasonably permit legal and essential immigrants to legally enter the United States and to work pursuant to our laws. More than 40% of the illegal immigrants in the United States today (approximately 5 million illegal immigrants) are those that came to the United States legally and remained after the expiration of their visa.

The United States must address the issue of illegal immigration. We cannot continue on the present path. A nation of immigrants, we must welcome legal immigrants while strengthening our laws against the practice of illegal immigration.

Friday, December 02, 2005

Campaign Finance Reform is Destroying America

Regardless of what the politicians say, campaign finance reform is destroying the underlying fiber of representative government in America today. Representative government is supposed to be exactly that – a representative government of the people. Today, because of the constraints of campaign finance laws, it is exceeding difficult for intelligent, qualified candidates without personal wealth to be elected to public office.

Just how representative of America is Congress? Of the 63 freshmen elected to Congress in 2002, nearly one-half were millionaires. Of the American population in general, less than 1% are millionaires. There are four hundred and thirty five members in the House of Representatives. Of that number one hundred and twenty three had at least one million dollar incomes. The disparity in the Senate is far greater.

Here’s an example. Republican Senate Majority leader Bill Frist recently reported an income of forty-five million dollars. Ironically, Frist’s counterpart in the Senate, Minority Leader Tom Daschle of South Dakota, was among the least wealthy elected officials. Simple looks at NY City or the State of New Jersey are the most recent examples of “representative wealth” in American politics.

The money spent to win elections for positions that pay relatively meager sums is gross and raises curious questions as to the motivation of those who would spend so much for such limited adulation from the public. The sitting mayor of New York City, Michael Bloomberg (a Republican), spent nearly $75 million of his own funds to win reelection over an unlikely and little-competitive opponent and coasted to an easy victory. John Corzine (a Democrat), the governor-elect of New Jersey, sitting U.S. Senator, and former biggie at Goldman Sachs (which is paying more than $11 billion this year in bonuses alone to its employees) is a regular purchaser of elections. For his governorship, he spent more than $60 million of his fortune. A few years earlier, Senator Corzine spent tens of millions to secure his Senate seat. Even with a very unimpressive record, there seems no seat too expensive for Mr. Corzines quest for “public service.” Can anyone argue that there is anything noble about this?

Congressional wealth, however, is bipartisan. In 2002 forty three percent of incoming freshmen had annual incomes of at least one million dollars. By contrast, only one percent of the public have incomes of one million dollars or more. On the Democratic side of the isle are names including Herb Kohl (owner of Kohl’s Department Stores and the Milwaukee Bucks), Ted Kennedy and Jay Rockefeller, whose ill gotten fortunes boggle the mind of ordinary working people. How is it even possible for men of such wealth and such means to ever really understand the challenges of paying for healthcare, of struggling to provide a good education for your children, and of trying to realize the American Dream? How can men of such means ever really understand the consequences of unemployment and hunger?

The income chasm between members of Congress and that of ordinary Americans is a primary reason why so many working class people have dropped out of the political process. They know that the ‘appearance’ of choice in political races is little more than an illusion of choice. So vast are the sums of money needed to run a major political campaign today that only the wealthiest people can afford to run. This leaves ninety-nine percent of the population out in the cold. The wealthy can afford to self finance their campaigns—the poor cannot. Thus they enjoy enormous advantages over those without money. Those with wealth, means, and personal fortunes are considered instantly “credible.” Those without personal boatloads of cash – no matter their qualifications or intellectual heft – are considered little more than long-shots.

Campaign finance reforms has not helped but, rather, has exacerbated the problems of wealth and money in politics. As well, those who argue for public financing of campaigns are incredibly and ignorantly wrong. Let me say it very clearly- public financing of campaigns would destroy what is left of a much damaged political and electoral system. Limitations on campaign contributions are less important than is full-disclosure. Candidates without wealth but with intellectual heft should be able to be provided the necessary means for a competitive campaign from those folks with the means to provide such funding. Arbitrary campaign contribution limitations should be completely removed in favor of allowing unlimited contributions but requiring, without exception, immediate and full disclosure.

Big changes are needed to return America to those who earned our incredible nation. There was never an intent that only the wealthy would rule. We need substantial changes in the electoral system to provide the means for those of little resources but of exceptional capability to be viable on the merits and not merely as a result of the size of their wallets.

Tuesday, November 29, 2005

Healthcare System in Cardiac Arrest

Lately in the news, words like “epidemic” and “pandemic” are used to describe the possible eventuality of a “bird flu” sweeping through the global community. The fear is that a new unseen threat could spell the demise of thousands or even tens of thousands of unsuspecting victims. The real epidemic or pandemic (you choose the word) is healthcare itself. With more than 50 million Americans without even the most basic form of health insurance and many tens of millions of people more struggling to meet the complicated and expensive maze of premiums and deductibles and co-pays, the American healthcare system is the equivalent of a very ill patient on life support.

Today, fewer than 60% of Americans receive healthcare insurance through an employer-sponsored health insurance plan. In the future, the concept of employer-sponsored heath insurance may be rare (certainly rarer than today). Of the uninsured in the United States, nearly 80% are self-employed or hourly wage earners – waiters, waitresses, beauticians, salespersons, florists, cashiers, and owners of small businesses.

Costs for healthcare and health insurance are soaring. In West Virginia, even those fortunate enough to have health insurance, the typical medical procedure or hospitalization is followed by a maze of bills from providers, hospitals, and any one else with even a remote relationship to the patient.

As an example of just how whacky the system is in West Virginia, my daughter was transported by ambulance and hospitalized with an asthmatic condition for three days. Her treatment was fine and she has fully recovered but I am still in recovery from the costs. The onslaught of invoices from the hospital, doctors, radiologists, and others were literally impossible to verify. Even calls to the hospital were met with confusion. In some instances, we received invoices from parties completely unknown to us. Until there is some transparency to medical costs and patient billing, the healthcare system will never be improved and costs will never be contained. Like a magician pulling a rabbit out of his hat, the mailman delivered new invoices for months after my daughter’s treatment.

Under the typical employer sponsored health insurance, the employer picks up the majority of the cost of the health insurance premium (e.g., 80%) and the employee is responsible for the remaining portion of the premium amount (e.g., 20%). The employee is also typically responsible for deductibles and co-pays as applicable. Thirty years ago, 20% of a medical procedure may have been reasonable. Today, twenty percent can be debilitating and painful for anyone to pay. Unfortunately, the alternative is even worse.

Under the current system and with current laws and regulations, the future for employee health insurance is frightening. As of September 30, 2005, Walmart was the largest West Virginia employer with approximately 11,440 employees. As the largest West Virginia employer and as an employer with substantial profits, one would assume that its employees were well compensated with substantial benefits. Not all is as it seems. And, keep in mind, to be competitive, Walmart influences the management practices of the employers of many, many millions of Americans.

In West Virginia, by a three to one margin, Walmart is the employer most cited by those seeking benefits under the West Virginia Childrens Health Insurance Program (“CHIPS”). In other words, Walmart employees children are the most treated under the CHIPS program. Effectively, we (the public) are subsidizing Walmart’s ‘falling prices”. Walmart is only one example of a system plagued by problems but it is an intriguing case study.

A November 2004 New York Times article cites a study in Georgia that found 10,000 children of Wal-Mart employees were in the state's healthcare program at a cost to taxpayers of $10 million a year. The same article describes a hospital in North Carolina that found that 31 percent of its 1,900 patients were Wal-Mart employees on Medicaid, and an additional 16 percent were Wal-Mart employees with no insurance at all. And in California, a study released in August 2004 by researchers at the University of California at Berkeley determined that the healthcare expenses of uninsured Wal-Mart employees were costing the already economically-strapped state $32 million a year in taxpayer funds. Wal-Mart has disputed findings that the company encourages its employees to apply for public assistance and called the California study "biased," noting that the researchers at Berkeley did not contact the company for facts and statistics.

According to a PBS report on FRONTLINE, Wal-Mart officials claim that 90 percent of its employees are insured either through the company's policies or elsewhere. Wal-Mart spokeswoman Sarah Clark told FRONTLINE that over 500,000 of the company's 1.2 million U.S. employees are insured by Wal-Mart and that the company insures a total of 900,000 employees and their dependents. According to Clark, 29 percent of Wal-Mart associates are ineligible for coverage. Stringent eligibility requirements and the employee turnover rate may account for that 29 percent: Full-time employees must work for six months before they can be covered, and part-time employees must work for at least two years. Wal-Mart's labor turnover rate is 44 percent per year close to the retail industry average.

Wal-Mart's healthcare premiums are also high for the average associate's salary. Currently, Wal-Mart's employees must pay 33 percent of their healthcare costs: $30.50 a month for an individual or between $132.50 and $230.50 a month for families. Wal-Mart argues that its associates are a different demographic base than most companies' employees. So, even those fortunate enough to have health insurance are not fortunate to have much else.

The problem faced by Walmart is really not a Walmart problem. It is an American problem. The healthcare system and affordability of healthcare and insurance should be a top priority of the Bush Administration and Congressional leaders. It shouldn’t take a brain surgeon (or a lawyer) to understand or afford a common medical procedure. Blessed we are with the world’s premier healthcare professionals and technology. Unfortunately, too few Americans can utilize such professionals or technology.

Reform is really a life and death matter. Reform (substantial reform) is needed NOW.

Monday, November 28, 2005

Real Tort Reform Still Not Done in WV

West Virginia’s leaders claim that they have already dealt with tort reform in West Virginia. Actually, insurance reform, in part, was dealt with by the Governor and the Legislature but very little has been done to fundamentally fix a broken civil justice system here in the Mountain State. If West Virginia really is "Open for Business" then tort reform must be at or near the top of the Governor's agenda.

Medical Monitoring and tort reform are big issues to the business community. Failure to pass meaningful tort reform will scare off new employers from West Virginia because of the hassles and risks associated with the present system. Take the announcement last week by West Virginia University that it had reached a settlement in a class-action lawsuit affecting up to 5,600 former and current employees who may have been exposed to asbestos. The employees sued in 2000 and sought medical monitoring for potential asbestos-related health problems as a result of working in university buildings containing asbestos insulation. Notice the keyword: “Potential.”

The workers, including professors, custodians, secretaries and other staff, alleged that asbestos in campus buildings put them at an increased risk of cancer. Despite the fact that no University employee exhibited any symptoms of asbestos-related health problems, the mere potential led these folks to seek advice of counsel and, true to form of most plaintiff attorneys, to sue the University in a class action lawsuit by a ridiculous cause of action called “medical monitoring.”

Medical monitoring is a travesty to a legal system desperate for reform. Mere possible exposure to something harmful absent any symptoms should not in and of itself provide a cause of action to sue an employer. What about my inhalation of possible carcinogens in my McDonald’s hamburger? What about my exposure to radio frequencies from using my company-issued Blackberry and cell phone? If “potential” health-related problems are ripe as a cause of action, then the backlog of litigation will never end. Folks seeking a “free ride” will be standing in line waiting for their turn to “cash in.”

As part of the proposed settlement, WVU will institute and pay for a medical surveillance program to be conducted for 20 years. Adding insult to injury, WVU also agreed to pay $1 million to cover potential claims and attorney fees. Without symptom and without injury, the attorneys stand to take home a pretty good payday.

The University said in a statement that the agreement had been reached in the "spirit of compromise." The truth of the matter is that the agreement was reached in a spirit of fear – fear of a unknown cost in the event this case made it to a jury. Only God knows the amount of legal fees associated with a case of this nature.

West Virginia seriously needs serious tort reform. Absent fundamental changes in our civil justice system, West Virginia will never be a great place to do business. Failure to act on substantial tort reform by the Democrat leadership of the Legislature and by the Governor must mean that "Open for Business" is really "Open for Business (if you can afford it)."