PEIA: Lawmakers have time to find fiscal solution
Tens of thousands of working and retired public employees in West Virginia got a bit of an early Christmas present. They will not pay more for health care coverage through the Public Employees Insurance Agency next year. Their benefits will not be reduced. In fact, for some of them whose health care providers are in neighboring states, benefits will get somewhat better.
All this is made possible by the fact the PEIA is in reasonably good financial condition, for a change. It had a $20 million surplus at the end of the fiscal year June 30 and officials expect another $70 million when this fiscal year closes. In addition, Gov. Jim Justice has suggested legislators appropriate an additional $100 million for the PEIA this coming year, adding it to the about $575 million taxpayers already provide for the agency.
Yet the great hue and cry for higher taxes to fund the PEIA continues unabated. Oil and gas severance taxes should be boosted to cover PEIA needs in the future, it has been suggested.
What of finding better ways to hold down the agency’s spending? Not a peep has been heard, despite the fact a special task force appointed by Justice to recommend ways to keep the PEIA solvent has made the appearance of being at work for months.
Dumping the entire mess on one industry — oil and gas — makes no sense. Pricing natural resources in our state out of competition with other gas-rich states would harm, not help, West Virginians.
And the harm could be enormous. Soon, perhaps by fiscal 2021, PEIA surpluses are expected to evaporate. More money will be needed to support the program.
Just covering the general inflation in health care prices will be difficult, PEIA Director Ted Cheatham said last week. That cost increase will amount — at first — to $50 million a year. It will double the following year to $100 million and continue multiplying after that.
Relying solely on oil and gas severance taxes to cover a $100 million and growing shortfall could drive the industry out of West Virginia.
PEIA finances appear solid for the next two years. That gives state officials some breathing room to find a long-term solution to the problem. Merely pumping more tax revenue out of the energy industry is not a solution.