Objective and rational advice is desperately needed

From the West Virginia Center on Budget & Policy, February 11, 2022

West Virginia legislators are currently considering whether to — yet again — cut the state’s already low severance tax. This would prove costly and harmful to our state budget.

An additional severance tax cut would largely serve out-of-state corporations and would mean West Virginia could miss out on hundreds of millions of much needed new revenue that it could otherwise use to address outstanding needs or make new — and necessary — investments.

West Virginia’s natural resources are finite, and West Virginians deserve to benefit from their extraction. With West Virginia’s effective severance tax rate lower than several other highly productive energy resource states, it is clear that a small increase in West Virginia’s severance tax rate would not hurt production nor cause any economic harm.

Primarily, the profits from coal and natural gas extraction go to out-of-state companies. The state needs to create a WV Trust Fund with a modest increase in the severance tax. Without it, there is no guarantee that the state will benefit from natural resource production in the long-run.

Learn more in the Sean O’Leary post or in our educational video.