Statehouse beat: State leaders spar over who controls slush fund

The program, which was originally administered by the state Economic Development Authority, was intended to provide grants to localities in order to make themselves more attractive to new businesses.

A legislative audit in 2008 found that the vast majority of the grants were less than $50,000, with most being $25,000 or less, and clearly, the relatively small size of the grants made the program particularly attractive for the Legislature to commandeer.

That LEDA has been turned into a legislative slush fund came to light when Delegate Scot Heckert, R-Wood, publicly complained that Gov. Patrick Morrisey was refusing to release funds for his grants, presumably as punishment for Heckert opposing such Morrisey initiatives as his bill to repeal the state Certificate of Need law.

According to Heckert, Morrisey is holding up funding for such vitally needed grants as $5,000 for Blennerhassett Middle School’s wrestling and track programs, $3,000 for Discovery World theater renovations, $2,500 for Parkersburg High School wrestling (Heckert evidently is a big wrestling fan), and $3,000 for Tri-C youth football and cheerleading uniforms.

Heckert’s displeasure with Morrisey was first reported by MetroNews and later by Ogden Newspapers, both of which erroneously referred to the account in question as the “Legislative Economic Development Assistance� fund.

The articles also failed to answer a very pertinent question: How in the world is the governor’s office holding up grants that are actually under the auspices of the EDA?

The answer is that the Legislature stealthily (and probably illegally) used the Budget Bill to take funding for LEDA away from the EDA.

In the fiscal 2021-22 budget, LEDA funds were partially under the EDA and partially under the governor’s office. For fiscal 2022-23 and thereafter, the entire line item was moved to the governor’s office, in the same section of the Budget Bill as the governor’s Civil Contingency Fund, which has also been used as a slush fund on occasion.

According to news accounts, each delegate is allotted $25,000 a year for LEDA grants, and any unexpended funds carry over to the next budget year.

That works out to a total of $2.5 million a year for the House, and my understanding is the Senate gets an equal amount, with each senator having proportionately larger allotments.

That’s consistent with the $5 million line item for LEDA in the 2025-26 budget, which Morrisey symbolically reduced to $4.9 million via line-item veto, citing a “significant reappropriated balance� in the account, which indeed finished fiscal year 2025 with a balance of $22 million.

As best I can ascertain, the whole process works via gentleman’s agreement. There’s nothing codifying the transmogrification of LEDA from an economic development grants program administered by the EDA to a legislative slush fund operated out of the governor’s office.

The reason for the shift is obvious. While the EDA probably wouldn’t look kindly on a legislator’s request for a LEDA grant to buy youth football league uniforms (just how does that promote local economic development?), a governor looking to curry favor with legislators would likely be much more receptive. Recall that when the account was transferred to the governor’s office, then-Gov. Jim Justice was pushing legislators to enact his income tax cut proposal.

Evidently, under the gentleman’s agreement, the governor’s office is supposed to sign off on legislators’ LEDA grant requests pro forma, which is why Heckert and House Finance Chairman Vernon Criss, R-Wood, are hacked off at Morrisey for holding up the awarding of Heckert’s grants.

While the new slush fund currently pales in comparison to the Budget Digest, which at its peak topped $30 million a year, having the ability to dole out $25,000 a year (or $73,500 per senator) can buy a lot of goodwill among the electorate.

Since the funds carry over, one need not be a brilliant campaign strategist to recognize that if a delegate makes a limited number of grants in an off-year, say, $2,500 worth, that delegate will have $47,500 of taxpayer funds at his or her disposal to hand out to various constituent groups in the election year.

I’m advised that checks for grants by Republicans are sent to the legislators, in order to facilitate check presentation ceremonies, while grants by Democrats are mailed directly to the recipient agency or organization.

And keep in mind that the only thing necessary for the LEDA fund to grow exponentially, as the Budget Digest did, is for legislators to approve larger and larger appropriations to the account.

One hopes that good government organizations will challenge the LEDA slush fund in court, just as they did with the Budget Digest, and put an end to this latest taxpayer-funded campaign tool before it gets further out of hand.

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For many years, the Budget Digest served a legitimate purpose of providing state agencies with more specific details on how certain budget line items were intended to be spent than could be spelled out in the Budget Bill itself.

It began metastasizing into a legislative slush fund in 1990, with legislative leadership directing spending to various pet projects, and when then-Gazette editor Don Marsh got wind of what was happening a year later, he directed me to write extensively about it, convinced that shining light on the matter would shame the Legislature into doing away with the Budget Digest.

Politicians then were not quite as shameless as they are today, but the coverage of the Budget Digest initially had entirely the opposite effect. Constituent groups, and even many legislators who were previously unaware of the digest’s existence came clamoring for a piece of the pie, and by the end of the ‘90s, the digest had grown into that $30 million a year monstrosity.

The first of several legal challenges to the digest came in 1991, but the state Supreme Court at the time bought into the Legislature’s argument that the Budget Digest did not carry the weight of law, and that agency heads were free to ignore the spending directives. That ignored the fact that those same agency heads would have to come before the Legislature with next year’s budget requests, where they could well feel the pain of failing to comply with the prior year’s digest.

While the court at that time chose not to kill off the Budget Digest, it did require more transparency.

Unlike the stealth and secrecy of the LEDA grant process, in subsequent years, Budget Digest requests were public records, and the annual approval of the digest by the 12-member House-Senate budget conference committee took place in an open meeting.

The current Republican legislative supermajority has done away with the budget conferees, preferring instead to finalize the Budget Bill in secret.

It would take 15 years -- and a Kanawha Circuit Court ruling that legislative aides could be compelled to testify about the inner workings of the digest process -- before the Legislature was finally compelled to pass legislation killing off the Budget Digest.

Ironically, it also took 15 years for the Legislature to come up with its new slush fund.

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Finally, consumer financial services provider Bankrate recently put out its annual ranking of best and worst states to retire, and unlike so many rankings where West Virginia falls into the bottom ten, the state ranked seventh best overall.

The survey’s methodology gave the most weight (28% of the total) to affordability, and ranked West Virginia first in the nation in that category.

Other key factors were weather (18%), where West Virginia ranked 12th; neighborhood safety (17%), with West Virginia ranked sixth; health care (16%), with the state coming in 38th; local taxes (9%), 23rd; arts, entertainment and recreation (7%), with West Virginia at 50th.

I would object to that last ranking. Granted, there are great swaths of the state with little in the way of arts or entertainment, but that certainly is not the case in ÂÒÂ×ÄÚÉä, Morgantown, Huntington, or even smaller towns like Lewisburg or Elkins. I would also argue that few states’ outdoor recreation opportunities can top those available in West Virginia.

The point being that West Virginia frequently ranks favorably on best states to retire lists, in large part because of its affordability.

Seems to me the state would do well to market itself as a retirement haven, and incentivize out-of-staters to retire here.

After all, many of the state’s shortcomings are not concerns for retirees.

Subpar schools? Who cares, the children are long past school age.

Bad roads? Less of a worry for those who aren’t commuting five days a week.

Lack of good jobs? With the exception of those of us who still work part-time, not an issue for retirees.

Folks over 60 also account for 70% of all disposable income nationally – most of it in the hands of us Baby Boomers. That’s a market West Virginia should be trying to tap.

Perhaps the state should consider a senior version of Ascend WV, the program to recruit remote workers to the state with incentives that include a total of $12,000 in payments over the first two years of residency.

Paying retirees to move to West Virginia -- particularly those committed to spending their children’s inheritance in their golden years -- could prove to be a gold mine for the state.