By Erin Beck
September 5, 2018 - West Virginia's deputy revenue secretary says that while "things are pretty good" in the coal industry right now, he added that "nothing is forever."
The Republican party in West Virginia has made an increase in coal industry jobs a central issue this campaign season, despite a report from West Virginia University's College of Business and Economics last month predicting long-term declines in the industry.
Governor Jim Justice announced Tuesday that state revenue collections came in above estimate for August. Other Republican leaders, including the new Speaker of the House, Roger Hanshaw, at left, joined him for a news conference.
At a Tuesday afternoon press conference, Governor Jim Justice announced that August general revenue collections – nearly $352.3 million – came in $33.4 million above estimate. His staff passed out hand-outs, which said that general revenue collections have been millions above estimate since April. The Republican governor credited GOP policies.
In an interview, Mark Muchow, deputy secretary for the Department of Revenue, pointed to construction, including pipeline and road construction, as well as the Procter & Gamble facility in the Eastern Panhandle “that’s just now ramping up." Earl Ray Tomblin announced plans for that plant during his time as governor. Muchow also pointed to a boost in employment and wages, and said increased activity in the leisure and hospitality industry is bumping up sales tax collections.
“Initially when the upturn started in the second half of fiscal year 2017, it was led by severance tax growth,” he said. “The initial spark that lit the fire was energy.
"In southern West Virginia, when the coal industry does well, other vendors do well too," he said.
Muchow noted increased demand for coal exports, particularly to Europe.
"Nothing is forever," he said. "Nationally, the stock markets been going up up up up up. It's not gonna happen forever that way. There's going to be dips."
A West Virginia University College of Business and Economics report last month also attributed increased coal production in West Virginia to increased demand overseas, not domestic policy. It also predicted long-term declines.
"We’re never going to get away completely from energy," Muchow said. "Energy’s a big part of our state and people wouldn’t live where they’re living today if it weren’t for energy. They’d be living in urban areas. The big migration into southern West Virginia into those rural areas had to do with the mining industry so there's no alternative."
Muchow noted that the Pinnacle Mine in Wyoming County had announced it would lay off 90 workers, due to "geological problems."
“What that means is the reserves have run out or they’ve got some sort of issue,” he said. “Generally, in southern West Virginia, particularly in the metallurgical coal field, things are pretty good.”
During the press conference, Justice and the new Speaker of the House, Roger Hanshaw, R-Clay, said they recognized the need for a diverse economy. Hanshaw mentioned a bill to expand faster Internet two years ago.
"We're in the process of preparing now another simpler bill that we think will take another step forward in deploying broadband across our state to allow people to work remotely, to start businesses, to do e-commerce, to do technological business in a way that we’ve not done here before," he said.
Following his nomination last week, Hanshaw had said the biggest challenge facing West Virginia is a “stagnant economy.” For several weeks prior, GOP leaders had been promoting West Virginia’s economic “comeback.”
"Our responsibility as leaders is being cheerleaders for ourselves – being cheerleaders for our own state," Hanshaw said Tuesday.
As I look around the room, I don’t think there's a single person here today who couldn’t pick up and move elsewhere tomorrow, and probably make more money and do it more easily, so we’re all here by choice. So when we talk about stagnation in our society, in our economy, realize that's as much a mental roadblock as it is reality."
The state's commerce department still lacks a secretary. Woody Thrasher stepped down in June, during heavy criticism of the department's flood recovery efforts.
"If you've got a great name, I'd love to hear it," Justice said Tuesday.
He said questions about another vacant position, the head of the state Office of Drug Control Policy, should be directed to Bill Crouch, state Department of Health and Human Resources secretary, before adding that he thinks he is "close" to filling that position. Michael Brumage left that post in March.
Justice announced the revenue numbers following several minutes building up to it by criticizing coverage by the Charleston Gazette-Mail's Phil Kabler. Tomblin had passed out leis at a press conference in August, also announced revenues above estimate. Kabler had written that some of June's revenue collections came in during July because of an "accounting quirk."
“It's tough when things have turned and I know they’ve turned and then to watch these sideline carnival shows,” Justice said, “because thats all they are is carnival shows. They don’t mean anything.”
Justice asked his staff to pass out leis before unveiling white boards, and announcing that August revenue collections had also exceeded expectations. Kabler was on vacation.