Balancing Act: Building a Budget in WV in a Post-Coal Economy

The State Journal - For decades, West Virginia's lawmakers have relied on severance taxes from the state's vast coal reserves to help balance the state's budget. The seemingly never-ending stream of coal flowing out of the state's mountains was a predictable and significant source of revenue, and a major source of funding for a state general revenue budget now in excess of $4 billion. Read

Then the bottom dropped out of the coal market. Over the past few years, coal severance tax collections have dropped from a little less than $421 million in 2012 to just under $277 million in 2015. Severance tax collections for 2016 and 2017 are expected to be even lower.

Combined with falling prices in the oil and natural gas industry, which also affected severance tax collections from those businesses, lawmakers have lost hundreds of millions of dollars in revenue they were counting on to pay for state services and programs.

While economists and government officials believe the state's oil and gas industries will rebound in the coming years, most observers feel that coal will never recover to anything resembling its former glory. How then do members of the West Virginia Legislature find money to make up for the lost coal bonanza?


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