By ANDREA LANNOM
CHARLESTON, W.Va. — Gov. Jim Justice and Senate President Mitch Carmichael said they believe the state missed out by not tiering severance tax, a concept the governor advocated that did not make it through the Legislature.
Justice and Carmichael addressed Thursday’s Coal Forum at the Culture Center, both talked about the industry, how they think it’s important to West Virginia’s future and the plan to tier severance tax.
Throughout the session, Justice advocated tiering severance tax. Although there were a few iterations of the plan, they had the same premise. When the price of coal drops below a certain rate, the tax would drop. Conversely, if the price increases, the tax would increase. This plan ultimately didn’t make it into the final budget passed by the Legislature.
“We took a hard run and when I say hard run, the Senate passed on five different occasions in the 60-day legislative session,” Carmichael said. “Five different occasions.”
“We tried to incorporate the concept of a tiered severance tax structure such that the coal industry received on current price schedules approximately $20 million and in some versions as high as $30 million in reductions incorporated and spread through the coal industry,” Carmichael added. “We recognized, and I am astounded to realize, that West Virginia’s taxes on coal and natural resources … are much higher than surrounding states. We can’t continue to do that. It’s wrong-headed policy.”
Justice said in his view, tiering severance tax would have helped the state.
“It’s not about the Coal Association, Bob Murray or the United Mine Workers,” Justice said. “It’s about one thing. Can you mine coal in West Virginia for $40 a ton? I don’t think you can or very few people can. If you do have people making their way doing that, you would rather get 3.75 percent of severance tax from them and help keep miners working than say what we need to do is see another coal company close. How many are going to have to close for us to get it? … we can’t be that silly.”
Justice said in his view, the reason tiering didn’t get across the finish line is because of partisan bickering.
“Why didn’t we do it? The reason we didn’t do it is simple as why do we have all this stuff in the budget? Think about it for a moment. We did it because we had a group, whether Democrat or Republican, saying they don’t like it because it’s a Republican idea or a Democrat idea.”
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