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Future fund debated as WV legislative session nears

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SOUTH CHARLESTON, WV -

The promise of better days ahead in West Virginia is always front and center this time of the year, as a new session of the state legislature is being prepared. 

But for 2014, that hope may not be more pronounced than ever before. The source for that hope - an abundance of gas to be extracted within the Mountain State's borders and the revenue it will generate, has political and business leaders very optimistic - save a few concerns. 

The Associated Press hosted a West Virginia Legislative Lookahead at the South Charleston campus of Marshall University to discuss a variety of issues on Monday, Jan. 6. The first item on the agenda was Future Fund/Energy, which featured comments from Senate President Jeff Kessler, D-Marshall; Corky DeMarco, executive director of the WV Oil and Natural Gas Association; Ted Boettner, executive director of the WV Center for Budget and Policy; and Bill Raney, president of the WV Coal Association. 

"If we are ever going to break this cycle of poverty in this state, we can't just worry about spending this year's budget, living hand to mouth, every year," said Kessler of the need of a Future Fund. "We need to have a fund set aside, it's simple economics.
"We have something that's in huge demand, that people are willing to pay an enormous amount for, that we are sitting on in West Virginia," Kessler added. "We need to save a portion of that money and develop from that resource to diversify our economy."

Kessler said "real wealth" needs to be created for West Virginians, which is done by saving money. 

"When you do that, these little ebbs and flows that you get year to year in the energy won't be as prominent or disruptive,to our economy," he said. "We need a nest egg if money that we can use to alleviate those trends."

Industry leaders express concerns of raises in severance taxes hurting their bottom line. 

"The concept is great," said DeMarco. "We should have done this 75 years ago. I'm concerned about our competitive advantage with other states. We compete in mineral extraction and can't do so by raising severance taxes in West Virginia.

"We must maintain the current severance. We have to be smart about it, and make sure West Virginia gets the value added from (gas extraction)."

And Raney echoed that sentiment, saying the state "can't stand an increase in taxes."


"We are challenged by the tax structure," Raney said. "It kicks us out of a competitive market. We support the rainy day fund, and this (Future Fund) is no different as I see it. We should have done this a long time ago."