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WV Severance Taxes Up So Far This Fiscal Year

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CHARLESTON, WV -

West Virginia severance tax collections are running about 15 percent ahead of last fiscal year while most other general fund revenue streams are lagging behind.

Through Sept. 20, the state had collected $95.4 million in severance taxes compared with $82.9 million at the same time last year, Mark Muchow, deputy secretary of the state Department of Revenue, told more than 200 people assembled for the annual West Virginia Economic Outlook Conference on Oct. 1.

This year's growth comes even as taxes in fiscal year 2013 were down $63.55 million from 2012, Muchow said. Severance taxes from coal were down in 2013 while taxes from natural gas were up, he said. The same pattern was evident in the first two months of this fiscal year.

Severance taxes accounted for 10 percent of the state's general fund revenues in 2013, up from 6 percent in 2003, he said.

Sales and use taxes were the only others showing increases year over year. Personal income taxes, business and occupation taxes, corporate income taxes and lottery proceeds designated for the general revenue fund were all down.

Muchow showed a map of West Virginia counties color coded by the growth in their county property tax base from 2012 to 2013. Five of them — Marshall, Wetzel, Doddridge, Harrison and Taylor — had growth of 15 percent to 75 percent, and they are in areas that have seen heavy development of Marcellus Shale resources.

Earlier in the conference, John Deskins, director of the Bureau of Business and Economic Research at West Virginia University, said employment in the natural resources and mining industries should continue to grow over the next few years, but not nearly at the growth rate it has in recent years with development of the natural gas industry.

From mid-2012 to mid-2013, West Virginia added about 3,000 jobs to its economy, mostly in natural resources and mining, even though the industry comprises only about 5 percent of total employment in the state, he said.

"We think coal mining employment has stabilized," Deskins said. The growth the state is seeing and will continue to see in that industry is coming from oil and gas, he said.

Deskins also noted that exports of West Virginia products totaled about 16 percent of the state's gross domestic product in 2012, up from 5 percent in 2000, and that was mostly driven by coal exports. Europe was the largest market for West Virginia's coal, he said.