Momentum Building Behind WV Future Fund
PHOTO: Senate President Jeff Kessler says there seems to be little or no opposition to West Virginia establishing a Future Fund to save some coal and gas severance taxes and use the interest for economic development.
July 8, 2013
CHARLESTON, W.Va. - Momentum is building for a West Virginia Future Fund that would set aside a portion of coal and gas severance taxes for economic development. A poll last month found that West Virginians favor a mineral trust fund by more than three to one. State Senate President Jeff Kessler sponsored a bill to create a future fund in the last legislative session. That bill failed, but he said the more people hear about it, the better they like it.
"This is legislation [for] which [the] time has come. It took a few years to get people warmed up to the idea, but I have yet to run into one legislator, or one person in the general public, who doesn't think it's a good idea."
Future fund supporters say given the impact of coal and gas on the state, West Virginia needs make sure the economic benefits remain long-term. This summer, legislative leaders plan to go to North Dakota to learn about that state's "legacy fund." It was started in 2011, and reached $1 billion in a little more than a year-and-a-half.
A half-dozen states have permanent mineral trust funds. Kessler pointed to Alaska, where every resident gets a check each year. He says when a state has a natural resource boom, it makes sense to set some of the money aside so it has something to show when the boom ends.
"[It's like] opening a savings account for the people of this state so that, 40 or 50 years from now when the gas is drained or depleted, we don't say, 'What on earth did we do with all our precious resource?'"
According to the poll, state residents overwhelmingly favor raising severance taxes 1 percent to raise money for the fund. Kessler's legislation would not have done that. Instead, his proposal would have used the expected doubling or tripling of natural gas severance money from Marcellus drilling.
The principal in the future fund would stay in the account, while the interest would be used for economic development and diversification. Kessler said part of the interest income would also go back to the coal and gas counties, to offset the impact of the mining and drilling.
"Demands on their roadway system, infrastructure, water systems, housing markets - we do think it's important to give a little bit back to the counties of origin of the resource," he said.
"Creating an Economic Diversification Trust Fund" is available at www.wvfuturefund.org.