Chief economist Tom S. Witt looks at the opportunities offered by home rule.
Since the Great Depression West Virginia has had a very centralized government with minimal independence afforded to counties and municipalities. Highway construction and maintenance, for example, is the responsibility of the state, except in the case of municipalities—counties cannot enact sales and income taxes to fund the infrastructure needed by their citizens. And while public education is the responsibility of elected county boards of education, effective control lies with the state Board of Education and Legislature. The end result of more than 80 years of centralization is that local officials run to Charleston for financial support and cannot craft programs demanded by residents.
But state budgets are increasingly strained and, at the same time, top-down solutions don’t always work for every part of the state. In 2007 the Legislature enacted the Municipal Home Rule Pilot Program to give municipalities the opportunities to craft taxes, rules, and services to meet the needs of their voters. The four cities enrolled in the pilot program—Bridgeport, Charleston, Huntington, and Wheeling—were largely successful in tailoring programs and taxes to meet their needs. Among the changes enacted and approved by the Home Rule Board have been streamlining design-build processes, elimination of B&O tax and replacement with local sales tax, and improvements in fee collections. All changes, however, must be approved by a state board. Based on such successes, the Home Rule program is expanding to 20 cities in 2014. But it’s still a pilot program.
I believe our state is at an inflection point between state and local government. We must move responsibility for programs and revenue sources to county and municipal governments—the state’s fiscal issues make it imperative. Local economies with adverse demographic profiles, low human capital resources, and isolation from wider markets will have less opportunity to determine their destinies. But those that have human capital and access to wider markets should not be constrained by restrictive policies oriented toward equity of treatment. The shift would align West Virginia with surrounding states, where responsibility for basic public services is met through modern local government structures and not subject to approval by a state board. It’s time for a reset.
Written by Tom S. Witt