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Manchin expects tighter budget this year
Gov. Joe Manchin speaks during an editorial board meeting Thursday, March 5, 2009, at The Herald-Dispatch in Huntington.
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HUNTINGTON -- Gov. Joe Manchin is spreading the word to his agency heads at the Capitol that the state budget is going to be tighter this year, so their programs better be in shape.
Manchin told The Herald-Dispatch's editorial board Thursday about his plans to keep the state financially sound during the economic crisis and reiterated the key points he made in his State of the State address. His key points included modernizing rural health care, moving the state toward renewable and alternative energy production and creating more confidence in the state's courts.
His main focus, however, was the economy. To keep state costs down, Manchin said, he's asked each of his agency heads to validate their programs.
"I want every agency and every agency head ... to look at each program they have," Manchin said. "We've been pressing every agency head to validate, 'Why do you have this program, what is the purpose of the program, what's your objectives and what can you show me you've accomplished and achieved?'"
If the agency cannot justify the program or determine a way to make it more effective, Manchin said the program will be eliminated. Manchin said the state, and its residents, can remain fiscally sound if all "stay disciplined."
"As I sit here today, we're still in the best shape of most any state in the nation to come through this better and to come out of it quicker and to be stronger with more opportunities when we do it. If we stay disciplined, " Manchin said.
"That's the hard thing now," he added.
When developing the upcoming budget in October and November 2008, Manchin included a 3 percent pay increase for state employees and teachers. But when the national financial crisis' impact on West Virginia became evident in December, Manchin decided to implement a zero-growth base budget.
If he had implemented the 3 percent pay increase, it would have cost the state $70 million that it could not afford looking ahead to revenues for 2010 and 2011, he said.
Another money-saving idea came about as the governor was reviewing road and bridge projects to be done with federal stimulus money.
To his surprise, Manchin said, he found that design and engineering work contracted out by the state was negotiated by a selection committee inside the Department of Transportation's highway engineering department rather than opened up to competitive bids. This committee had selected the outside companies in this way since 1990, he said.
The largest employer of engineers in the state is the State of West Virginia, with more than 300 engineers, Manchin noted.
"If you look at the money, over the years, that's been spent on outside services, it's unbelievable," Manchin said. "To me, that's money that didn't go into road repair, road paving, bridge repair and things of that sort."
In one case, Manchin said, he found the design work for a truss bridge in the north-central part of the state cost $752,000, or equal to about half of the total construction cost for the bridge.
"Something sounds a little excessive, doesn't it?" Manchin said.
The governor plans to have legislation introduced that aims to curb these high design costs. Instead of relying on outside engineering firms selected by the committee, the legislation will work to bring in firms that specialize in a particular field to bid competitively on the projects.
The legislation, he said, allows the state to get "the best bang for our buck."
Opponents of the bill, Manchin said, claim the bidding process would not bring the most experienced, skillful companies. Manchin disagreed vigorously and said the legislation also will allow the state to apply a 5 percent preference to support in-state companies.
"(We'd be) able to build more of our companies and give them more work in state instead of these large conglomerates who come from out of the state and have a shell of the company in state," Manchin said.
In another effort to save costs and support residents, Manchin spoke about a proposal to cap the state's contribution to individuals receiving the PROMISE Scholarship at $4,500. Now the scholarship supports eight semesters of tuition and fees for qualified in-state students.
Manchin contends that the proposal, as suggested by a review commission, would encourage state colleges and universities to keep tuition costs down. Tuition has risen more sharply since the implementation of the PROMISE program in 2002, he said.
"Everyone started chasing the dollar because they knew they could charge whatever they wanted," Manchin said, "Especially the schools that were getting the disproportionate share of it."
"So it put our tuitions, I believe, in an inflated situation that was induced by knowing you have a lot of free money to chase," Manchin said.
Students at Marshall University and West Virginia University make up about two-thirds of the total number of PROMISE recipients.
Manchin said he has considered a number of options to improve the PROMISE scholarship including making it merit-based, need-based and requiring recipients to stay in-state after graduation. Though he's weighing his options on how to make the program more effective and cost efficient, Manchin was sure of one thing.
"We'll have a PROMISE scholarship," he said. "Will it look differently? ... Things don't stay the same."
