Future funds being explored by legislature
West Virginia is on the brink of a natural gas boom that may be equal to or larger than that of the coal industry in the last century. Efforts are being made to create a grass-roots movement that will result in sustainable wealth for the state.
Booms and busts in coal counties result in lower household incomes; higher poverty rates; worse health; lower education levels and high income inequality.
A Future Fund offers a way to prepare for a better future by converting nonrenewable resources wealth into a renewable source of wealth for generations to come and without a plan for the future, the state is likely to continue repeating the same cycles of boom and bust and poor economic outcomes.
In a recent meeting at Logan to discuss solutions to child poverty in West Virginia, Manuel Ojeda posed a question to the elected officials in attendance.
“We live in what should be one of the richest counties in West Virginia,” said Ojeda, ”Why is it that Logan, Boone, Mingo and McDowell (counties) are so poor when they generate hundreds of millions of dollars every year? Extraction industries have a choke hold on southern West Virginia and something needs to be done to change that. North Dakota passed a law that requires 12 percent of every dollar made in the oil and gas fields be placed in a trust fund. The fund can’t be touched for ten years, after which it is used to provide services for the people of North Dakota. Why can’t West Virginia do that? Severance taxes amount to a pittance compared to 12 percent.”
West Virginia State Senator Art Kirkendoll responded saying, “The legislature just heard presentations from Wyoming and Alaska, who have passed legislation to create one of these trust funds. Future generations would have access to funds to support their infrastructure and services. I am very interested in that possibility. We are also going to pursue more coal severance funds to come back to the counties for infrastructure, water, jobs and services. The coal severance methodology was put together back in the 1940s. Some of us have been very passionate about getting more of that money back in our counties.”
Six states have mineral trust funds and the West Virginia Center on Budget and Policy estimates that a one percent severance tax on gas and coal would yield $5.7 billion dollars over the next 23 years.
Lawmakers say study of these issues will continue after the session ends.
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