Jeff Kessler

1 — It certainly appears that Marcellus shale regulation will remain a major topic of interest for the next several years. What are the key features that you see that need to be included in West Virginia law to best serve the interests of all the parties involved?

Well, first we need to have adequate inspectors. We need to properly fund the Department of Environmental Protection so that they have enough inspectors with boots on the ground to go out and do the necessary field work in order to make sure the permits get issued timely, number one, and when they do get issued, they do it in compliance with environmental regulations and to ensure the roads and other things that might get damaged get fixed. Number one, we need to have a basic regulatory framework in place to ensure both predictability for the industry and to ensure the safety of the public and protection of the environment.

Probably the biggest disappointment of the legislative session we just came through was the failure to have any meaningful regulation pass. The Senate, we passed out a bill that came out of the Senate EIM committee. I had Sen. Green as chair of my subcommittee with that, together with Doug Facemire from north-central West Virginia, and Karen Facemire as well on it. We did pass a regulatory bill out of the Senate. We sent it over to the House, and unfortunately, though they had taken up the issue first, failed to put out a bill. We were unable to get it to conference in any fashion, so we were unable to, at the end of the day, have a law passed.

It has a negative impact in two-folds. Number one, I think again, it sends... In order for the industry to come in and make the type of the investments I think they are prepared to, they want to know what the rules are, and I think we need to have the rules in place that are fair, meaningful and applied even-handedly to create predictability.

There’s always some uncertainty in how much investment you are going to get in an industry if the rules aren’t set, and I’m not prepared. I know the governor has said “‘just let the DEP do it by regulation.” Well, their job is to enforce the law. It’s the Legislature’s job to set the public policy and make the laws. I am always uncomfortable when you get regulatory agencies making the law. You see what the EPA is doing over in Washington when you give them the power to make laws and rules. You’ve seen what they’ve done to the mine industry by taking hold of the lawmaking function away from the legislative branch in Congress. Again, I don’t want to see that happen here. I want the Legislature to fulfill its duties and pass the laws and set up the policy dealing with the environmental protections, the rules of the game, you break it, you buy it on our roads, the repairs, and also for public safety. That needs to be done. We need to fund it.

When we never got a bill out of the House, so we could have our version get into conference, and reach a meaningful bill, that was the biggest disappointment of the session, frankly. I think, quite truthfully, the Marcellus shale opportunity is probably the biggest single potential economic boon the state is going to see in my lifetime, and it would be foolhardy for us not to seize the opportunity it creates for the people of the state at this time. I think we need to do that, and we need to be willing to be courageous, step up and do our job, and deal with the issue and not wait until maybe it lands in another state, in Ohio or Pennsylvania or other states, where they have the same ability or capacity to do it.

I am happy that we passed an economic incentive bill for the, not necessarily the industry, but we created some tax breaks on the books now for various manufacturing industries. It would ensure that some of the tax breaks would be available for some of the, not necessarily the drilling companies, because they are falling all over us to come into our state, particularly in the north and north-central part of the state, but for some of the derivative industries.

One of the byproducts of the natural gas is ethane. That is separated in a cracker facility. The beauty of that is that the ethane is then used as a component in the chemicals and plastic industry. As you look at West Virginia, we already have in West Virginia, from the Northern Panhandle to St. Albans, a pipeline or right-of-way for the transport of that byproduct that could then be used for the cracker facilities to rejuvenate the entire chemical and manufacturing plastics industry, the PPGs, the Bayers, the Duponts. It could create a rejuvenation of our entire manufacturing sector in this country and in this state particularly.

We’ve lost so many jobs in the Kanawha Valley and my part of the state. Look at the census — the Northern Panhandle, southern West Virginia has lost and a lot in Kanawha County. Two of those areas have always had a high manufacturing base. Those have all lost their jobs. All the way from Jackson County all the way down. We could, truthfully, recreate, or reinvigorate our entire manufacturing industry, not only with gas and the gas jobs, but the derivative industries could then lead additional steelmaking. Guess what we need more steel, guess what else we need? We need more coal, so it all feeds on each other. I look at that as the single biggest opportunity our state has had since the coal boom in the 1900s. This time, we’ve got to do right.

2 — As the debt of OPEB continues to rise, what steps need to be taken to stem the tide and begin reversing this trend?

Disappointment number two. The heck of it is, we are so close on both of them, truthfully. We looked at an OPEB bill in the Senate. Sen. McCabe was working on it with members of the Senate leadership, and we were working on a bill. We introduced it during the session. It actually got to the Senate Finance Committee, and due to some disagreement over the funding source, we need to come up with about a quarter of a billion dollars, or about $250,000 per year for about five years to set aside a nest egg we can use to start paying that down. We thought we could do it through a tobacco tax, but there’s some, particularly border counties, who had some difficulty with that for competitive advantage and different things, so it died on a nine-eight vote. Not the idea that we were going to do it but the funding source. It died in my finance committee, but the following day, I pulled my leadership in and said, “Guys, we’ve got to do something. We can’t leave this session without passing something to address this issue.”

The fact of the matter is, it’s going to require us to pay it. You’ve got that debt; it needs to be addressed. We need a dedicated funding source. Not going to do a tobacco tax, that’s fine. What are we going to look to? Do we want a pop tax? An increase in sales tax? No tax is going to be popular, but we have to have the funds to do it. So, we passed a bill out; though it did not have a fund source, it required that by July 1, 2012, next session. We would have an entire year to find that funding source. Legislators, like everybody else, procrastinate. Until they are up against the deadline, they don’t do things. People said, well don’t pass anything at all this year, but I said we need to pass at least something that tells us we would have to do something. Why not? Because if we don’t, you know what will happen? Next year will come up, and next year is an election year. All 100 members of the House are on the ballot, half of the Senate, 117 folks are up for election in 2012. What is the likelihood of passing any type of revenue-generating source to pay that? When are we going to do this? If not this year, if not next, are we going to keep kicking this can down the curb for the next generation? We can tackle it. We sent it over to the House.

The House sent something back on the last night. It was after 9 p.m. It was a little frustrating to me, because in order to have conferences to iron out the differences in the two bills, because we passed one, they passed one too, but they were going to take all of their money out of the Rainy Day Fund. We’ve got about $650 million in that, which is probably one of the key reasons the state’s bond rating has gone up to double A’s because we have a good, solid Rainy Day Fund. If we go and take a quarter of that out right out of the box, I’m concerned about the effect that might have on our bond rating. Making the cost of borrowing money for our school building authorities and whatever, our local school boards when they do bond issues, it may have a significant detrimental effect on our bond rating and the cost of borrowing money.

It’s a $4 or $6 billion debt, and people say we will never be able to tackle it, but we can and we will if we have a dedicated funding source. People said the same thing about workmans’ comp in 2003. When we did that, I was on the work group with Sen. McCabe, Don Caruth and others that were on that work group that put that together. Guess what, we dedicated $95 million of our income tax revenues and guess what? The $4 billion that they said was the biggest albatross around our state’s neck with workers’ comp is going to be paid off in 2016. That’s why, if we hold this thing off with $50 million a year for the next three or four years, we will then be able to pay off workmans’ comp and take that $95 million there and dedicate it to that. Then it will be paid off.

I don’t want to see us kick it down the curb for another year or two, because it won’t happen. Politicians don’t like to make tough decisions, particularly in an election year. I’m not going to be here forever. I want to make sure we get it done and we get it done right. I think we are in a golden opportunity. I think we have a window of opportunity in this state to get our financial package in order. While the rest of the states are in a terrible recession, West Virginia is relatively vis-à-vis and in pretty good shape. With $650 million in the Rainy Day Fund, operating in a surplus, double-A bond rating, and haven’t had to borrow one penny from the federal government for our unemployment fund. Virginia, Maryland, Ohio, Pennsylvania — $3, $4, $5 billion just to pay their unemployment claims. If you think we are bad with OPEB, those guys, not counting they are operating billions of dollars in deficits, they’ve got billions of dollars in debts they owe to the federal government in one fund alone.

I truly believe, while they’ve sunk, we’ve been at the bottom of the valley looking up at the mountain at these other guys. Because they sunk and we’ve sort of held our own, we truly are in a position where we can break out of the pack. My goal as governor over the next ten years is not to say where we are going to be today, but where are we going to be a year from now? I want to say where do we want to be in 2020? Where do we want this state to be in a decade from now? I want to be the 2011 candidate with 2020 vision. This is where I want to be: By the time 2020 hits, the best health care, fastest-growing economy and the best education in the nation.

You’ve got to set goals high, but there’s no reason why we can’t. Particularly, because of the fact of the energy sectors, we’ve come through the recession and we ultimately will. West Virginia is poised, truthfully, because whether it’s north, south, east or west, they are going to need what we have. That’s energy. You say it’s coal, and nobody likes coal. Does anybody like nuclear reactors now? We haven’t built one in 15 years in this country, and I don’t suspect we will see any.

You can say we don’t like coal. Of course, it’s dirty. I grew up around coal piles. My mother grew up in the company store. I played in the coal, you know, the slag piles. Coal gets dirty, but that’s why they make bath houses. You can mine coal, and the other thing is you can do it cleanly with environmental sensitivity as cleanly as possible. At the end of the day, there is no other viable alternative for this country other than coal, and there won’t be for the next couple decades. So, get used to it, guys, that’s the way it is. That’s a fact of life. We are going to need it, we are going to use it and we are going to mine it. Let’s do it as safely as we can and as cleanly as we can. There are environmental processes in place now to do it as cleanly as possible. With that, I think West Virginia’s future is bright because they need what we have.

My degree in economics still told me Adam Smith had it right. It’s a matter of supply and demand, and they’ve got the demand, and we are going to have the supply. Guess what, this time let’s not give it away. Let’s make sure they pay for it. The rest of the nation can pay for it, instead of taking it out, sucking the wealth out and leaving us with nothing to show for it.

One of the platforms I have is, with this Marcellus, to create what’s called the West Virginia Future Fund, where we take a portion of the increased severance dollars we are going to see with the Marcellus gas, like they did in Alaska when they had the oil boom and putting it in an endowment fund where it couldn’t be touched. Take 25 percent of that money and you can’t touch it. Now they’ve got $29 billion in it for every man, woman and child in Alaska gets a check ranging from $1,000, depending on how much interest they earned. In 2008, it was like $3,200 per person just for living there with no income tax. Can you imagine how rich this state would be if we had put a penny a ton of coal and put it in the bank 50 years ago? We’d be the richest state in the union. We didn’t have the wisdom, the courage or the foresight to do it. We spent it after it could come in. It’s rare in life that you get a second bite at the apple, but this time we might get a second chance.

If it happens, let’s stock some of it away, put some of it away, put it aside, not let the politicians spend it and keep it for diversification, rebirth and growth in the future opportunities for children and grandchildren. If we do, I think we will do the right thing.

3 — Transportation remains a significant issue, especially in our region. What specifically will you do as governor to try to resolve the funding crisis, as it relates to financing new construction and providing for adequate maintenance of our existing roads and bridges?

There’s no question roads are a problem. The flip side of that is that they are going to cost money. The flip side of that is it isn’t going to happen without raising some revenue. The flip side of that is if there is no other way that I see to do that other than the gas tax, quite frankly. We made a horrible mistake, in my view, a few years ago, when we froze the gas tax, only because it put us behind the eight ball over $100 million, and we’ve been playing catch-up since. Our roads are in disrepair, and we haven’t got enough money in the fund to fund it. We’ve studied it to death. Gov. Manchin had a commission, the New Roads Commission, or whatever, and they studied it, came up with all these ideas and proposals, but no one yet has come up with one that doesn’t cost money.

One of the challenges we have in West Virginia, since we don’t have any local control of our roads, or county control of our roads — it’s state controlled — so we probably have more highway miles under the toughest rugged terrain in the union, I would say. So, we got more miles per capita to tend to with less money. So, our roads have come in disrepair, and we’re not going to fix it with more money. I think you are going to see an increase in the gas tax. It’s probably the most equitable one because the user pays. The more you drive, the people who drive and wear the roads the most, pay more.

I know it may cost an extra 20 cents per fill-up, or whatever it may be per gallon, but it’s a lot cheaper than paying a $79 realignment fee every three months to go through all the potholes. You have a duty to fix the roads, and there is going to be less and less federal dollars coming down. We need to leverage as much as we can and make sure we have adequate money in place through a dedicated funding source — the gas tax or whatever.

We passed a bill this time through the Senate to create another $40 million. It was going to raise the fees, some of the registration fees through the Department of Motor Vehicles and stuff. No one likes fee increases, and the governor vetoed it for precisely that reason. At the end of the day, I find it uniquely ironic that both his transportation secretary Paul Mattox, was advocating for it, his DMV commissioner was advocating for it. You know why? Because they understand and realize that if they don’t have more money, they can’t fix more roads. The roads we have now need fixed. Without money, it’s a cold, hard fact we got to get the revenue somewhere. It may not be politically popular this year to say. I don’t want to pass on fee increases, my platform is lower taxes and more jobs, that is the governor’s platform, so I’m sure he didn’t want to pass anything that raised any fees. At the end of the day, there’s going to be a lot of potholes in the spring that need to be fixed that we don’t have any money to do.

At the end of the day, I think that’s what we need to do is to raise the revenues. Unless you see an increase in major federal highway gas tax or other federal funding, you’re not going to see the type of revenue we’ve seen in the past to fix the major interstates in this or any other state.

4 — One of former Gov. Joe Manchin’s major platform issues was education reform. While much was discussed, no wide-ranging changes to the way we educate our children have been made in the recent past. What are your plans when it comes to education reform?

I have two things. I think we need to have accountability standards that are tied to student achievement and pay raises. I don’t mind paying teachers a little more, but I think we need to get more out of them — better outcomes. Twenty-five percent of our kids, by the time they start ninth grade through 12th grade, drop out. Now, how on Earth are those kids going to make it without an education? Half of the kids that do graduate need remedial math when they go to community colleges or the four-year colleges after that. That tells me they are not getting a very good outcome of product from the educational system. The ones that are graduating need remedial math and English. I think we need to have a basic emphasis on the three R’s — reading, writing and arithmetic — you know, throw in a little phys. ed. in there too perhaps. You absolutely need to change the outcomes or the focus on establishing those core tools that are so necessary for learning and do that at an early level.

I also think we need to increase, and I intend to increase a focus on vocational training even in middle school. Not everyone needs to have a college degree now. So there are going to be all kinds of opportunities for West Virginia in a lot of different sectors. You have the education field where half of the teachers in the nation are going to be retired in the next ten years. Half of the people that work at American Electric Power, Allegheny Power that are over 50, 55, that are eligible for retirement in the next ten years. You don’t have to be a chemical engineer or an electrical engineer to have those jobs; you just need to be an electrical technician that you pick up through a vocational trade school or a community college. There’s going to be an enormous need in the health care field. We need to eliminate the disconnect between the job market and the jobs that I know and you know are going to be created and available now and in the next decade and make sure we are channeling the kid with an aptitude early into the fields and the jobs we know are going to be there.

One of the things we need to do more with our education system is have a connection between the business community, our career and technical colleges, and the middle and high school. That way, there is a continuity as you are moving the children through the education system into the fields and jobs that we know are there. Right now, there is a disconnect between the jobs sector, business sector, higher ed, community colleges, grade school and middle school. We need to try to get that continuum in place, and I think you will get better outcomes in a better education system that is actually going to be training the kids for the jobs that are there and can be created in the state. In the past, we’ve spent 65 percent of the general revenue budget every year on education for as long as I can remember. Then the kids leave. So you wonder why, at the end of the day, West Virginia is last in so many good categories? In this business, if you took 60 percent of your capital and flushed it down the commode every year for 20 years, would it be any wonder why you were the worst paper in town? Heck, no. You’d say, “We flushed away all our capital.”

In this case it’s human capital. We’ve done that with our kids by not creating the opportunities here.

We need to diversify our education system and train them for the jobs of the future.

5 — We are constantly being told, and are witnessing every day, the far-reaching impacts of drug abuse. What will you do as governor to address the epidemic, and do you have any specific plans for interdiction efforts?

I’m probably the only candidate that’s put a man in prison. For 17 years, I was a prosecutor, so I’ve seen firsthand. I did it every day for 17 years as a prosecutor and assistant prosecutor and special prosecutor. I was Wetzel County’s as well. I’ve seen from prosecuting people, I think most people in law enforcement will agree, about 80 percent of the people that come through the system have a substance abuse problem. They are usually drunk, high or getting money so they can get drunk or high. We take them, lock them up and guess what? You pick them up for doing something, you throw them in jail and we feel good about ourselves because they are in jail, but there’s no programs in the jail to stop the cycle. You get out after a six-month sentence, you let them out and you have a sober drunk back out doing the same pattern and the same thing.

We need more programs in the jails and in the prisons. Now the prisons, they can have some programs. In jails, they don’t. That in particular is where the overcrowding is. All these folks from prison overcrowding are ending up back in the regional jails, so they are busting at the seams too, but there’s no programs — no alcohol AA meetings, no anger management, no GED, no programs in those facilities — so we become more or less warehouses.

We need more funding, truthfully, directed toward community-based prevention and intervention programs. That’s why, when we did this community corrections thing a few years ago, I inserted in the bill — it didn’t just pop out of the sky — the creation of drug courts, which has been very helpful. We lock people up, it costs us $48.50 a day to lock them up. We treat them on the outside where they go into day report or to see about their mental health issues, maybe need a pill a day, it costs us $8 per day. It costs the taxpayer a lot less to keep them on the outside and let them pay it through their work, if they are on a work release or whatever programs. They pay from the outside instead of costing the taxpayer.

By putting more money into substance abuse intervention programs, you are also eligible to bring down three-to-one federal match. I was disappointed to see that the governor vetoed $10 or $20 million in his line item set up for community-based mental health substance abuse programs. It’s crazy to me to do that because you can not only quadruple the money if you make it Medicaid-eligible monies, but it’s so much cheaper to treat people on the outside with prevention and intervention than it is to arrest them and put them in jails. We can’t afford to do it.

If they show up in the emergency room with a drug problem, guess what? It’s a lot less cheap to treat them in an emergency room or jail than it is on the outside. You get better societal results; they pay for it, we don’t. You can get better productivity out of your people. It’s a more humane thing to do to give people an opportunity. That’s why, a year ago, I passed a bill to get people with low-level offense DUIs an opportunity to get that off their record, because once you get a DUI on your record...These are only eligible for low-level offenders, no kids in the cars, no injuries, nothing like that, but somebody that was a low-level DUI that may have went to a party, went to a wedding or whatever and had too much to drink one time, one night. It’s probably the worst mistake they ever made. Statistics show that a person’s likelihood of ever doing it again is probably significantly low of being a re-offender. We passed a bill that said for those type of folks, if they go in and immediately admit their guilt, go in and go through an alcohol treatment program and willing to using the intoxilyzer machine or “blow and go” in their car for three months, six months or nine months, depending on the level, at the end of that, they can have that dismissed off the record one time. The reason for that is that if you try to get a job in this state or country with a DUI...

Jails were meant to lock people up we are afraid of, not people we get mad at. People do stupid things sometimes, and we get mad at them and throw them in jail. We’re the ones that pay the price. I think when the taxpayer starts seeing the cost of building a new prison, $220 million to house people. What’d they do? They wrote a bad check. They did a bad thing, and I understand that’s a bad thing, but do I want to spend $48.50 a day for 365 days for writing a $50 bad check? No, I’d rather put them on a work release program, let them pay back the bad check and be productive. My focus would be putting people in jail that pose a risk to society, but to try to reduce that prison population through training, intervention, treatment programs, particularly with drugs and alcohol, because that’s the overwhelming majority I see. I see kids, I see grandpaps. I’ve seen people I’ve prosecuted, then I see their kids, and then I start seeing the kids of the kids. It’s almost a cycle of the same thing. We need to stop that and break the cycle.

Please highlight the key points of your gubernatorial platform.

I hear a lot of candidates talking about where we are and where we want to be next year, but I want to tell where we are going to be a decade from now. I understand this is a one-year term, and I understand if I win, I may have to get four more. But, if I can get it right, I figure we can get right in five years. I don’t want to do this for the rest of my life. Five years would be plenty. All I want to do is set us on the path of where we want to be ten years from now. That’s my goal as governor — to change the focus, to have the courage to stand up to the tough decisions. I don’t care who supports me and who doesn’t. There’s a lot of lobbying influence down there, whether you have labor influence and get endorsement from that or get money from the coal companies, or money from the gas companies. I don’t want one. I’d prefer not to have any of their dang money and just do what’s right and not worry about... Let the people decide, not worry about who’s paying what or who’s fronting my campaign and expecting something in return. We’ve got tough decisions to make in this state, and if we do it right and we do it now, I think we have the opportunity to break away from the pack and take this state to places it’s never dreamed of going before. It will take courage, and a lot of folks won’t want to do it. I’m not so sure that the bill on Marcellus didn’t die this year because there has been an extreme amount of pressure from the oil and gas folks, particularly the big boys. They’re coming into this state and want to do investment, but they wanted the ability to do forced pooling, which is frankly the ability to, if you get so much of the gas acreage under lease, if you have a 600-acre tract and you have 500 under lease, you can go out and force pool the other 10 or 25 percent into you. That’s a little bit kin to eminent domain. That was fairly unpopular — where you go and you take something from somebody.

There’s a few things people guard very jealously in this state. That’s their family and their land and their property. They don’t want somebody taking it away from them. They want that decision to be theirs if they sell it or lease it or whatever. I’m convinced to some degree, or suspect, some of the reason there wasn’t a lot of movement or support behind the executive branch and the bill didn’t move as well was there was a lot of moneyed interest in getting that forced pooling in there. As soon as the Senate passed a version that didn’t have that in there, it seemed the brakes started being applied for some reason. That’s because you’ve seen an exportation of all our resource money in the past, and wealth, particularly in the coal industry, go out of state. We can’t let that happen this time with the oil and gas opportunity we have. We need to create wealth for the people here and jobs for the people here.

If we let them take this opportunity away from us, the people here of this state, I’d rather see them leave it in the ground than give it away to someone else. We can’t let that happen. If we do, we’ll do a terrible disservice. That’s why I want to be governor. I won’t be beholden to anybody but the people. Period. I think if we do the right things this time, and are courageous enough to do it, I think we have the opportunity to take this state to the next level.


React to this story:


Trending Video