The West Virginia Senate today unanimously passed a bill to establish the West Virginia Future Fund. SB 461 now moves to the House of Delegates for consideration. This fund represents an important step toward a brighter economic future for West Virginia. The House should also vote yes.
What is the Future Fund?
The Future Fund is a permanent mineral trust fund that would be invested similar to a pension fund. It will be created using a portion of severance taxes from natural gas drilling. The bill establishes a baseline level of $175 million in severance tax revenue, and state analysts expect to surpass this level by 2015. Twenty-five percent of any amount above this baseline would be put into the Fund. The Fund would be created on July 1, 2014, and the investments would remain untouched until FY 2020. At that time, only the interest income could be appropriated, and then only for the specific items outlined in the bill: “economic diversification projects, infrastructure projects, and educational enhancement.” The full text of the bill is available.
The Future Fund is a way to turn a nonrenewable energy resource (in this case, natural gas) into a renewable source of revenue for the state. Bill sponsors have wisely specified that the Fund can only be used for projects that help diversify West Virginia’s economy, along with infrastructure developments and education.
The West Virginia Center for Budget and Policy estimates that if a similar fund had been established from a 1% severance tax on coal in 1980, it would be worth over $1.3 billion today. My colleagues and I just published a paper in Environmental Research Letters showing that with coal’s economic future growing uncertain, it is ever more urgent for West Virginia to invest in diversifying its economy.
Polling from last June shows that 70% of likely voters in West Virginia support the idea of the Future Fund.
If you are a voter in West Virginia, please call your Delegate and urge them to support the West Virginia Future Fund.