The West Virginia Center for Budget and Policy has asked lawmakers to add 1 percentage point to the 5 percent severance tax on coal and natural gas and put the extra money in a long-term trust fund "to prepare our state for the day the coal and natural gas run out," reports The Charleston Gazette's Ken Ward Jr. The fund could be used for a variety of economic development efforts, including early childhood education, college grants to workforce training and infrastructure improvements. Similar programs exist in Alaska, Montana, New Mexico, North Dakota, Utah and Wyoming, Ward notes.
The policy center released a report saying that without a permanent trust fund, "The economic benefit from the natural resources extraction will decline along with the natural resources themselves," and "West Virginia is one of the least economically diverse states in the nation and relies heavily on its natural resources for revenue." If such a program had been created in 1980, the center says, the state would have a trust fund with assets of almost $1.9 billion. If a trust were started now, it would contain an estimated $5.8 billion by 2035. (Read more)
Ward doesn't speculate on the prospects for a higher severance tax, but Charleston Daily Mail Business Editor George Hohmann mentions that the legislature is already considering a much more modest planning-ahead idea from Gov. Earl Ray Tomblin that wouldn't raise taxes, "an infrastructure reserve fund. It would receive a portion of the state's rainy-day fund and would help pay for road improvements, growing Medicaid expenses and water and sewer projects." (Read more)
The policy center released a report saying that without a permanent trust fund, "The economic benefit from the natural resources extraction will decline along with the natural resources themselves," and "West Virginia is one of the least economically diverse states in the nation and relies heavily on its natural resources for revenue." If such a program had been created in 1980, the center says, the state would have a trust fund with assets of almost $1.9 billion. If a trust were started now, it would contain an estimated $5.8 billion by 2035. (Read more)
Ward doesn't speculate on the prospects for a higher severance tax, but Charleston Daily Mail Business Editor George Hohmann mentions that the legislature is already considering a much more modest planning-ahead idea from Gov. Earl Ray Tomblin that wouldn't raise taxes, "an infrastructure reserve fund. It would receive a portion of the state's rainy-day fund and would help pay for road improvements, growing Medicaid expenses and water and sewer projects." (Read more)
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