CHARLESTON, W.Va. — It’s a different Future Fund than the one initially proposed by Senate President Jeff Kessler, D-Marshall, but the idea of a savings account that will bank a percentage of tax monies for infrastructure improvement, economic development projects and educational enhancement passed both legislative bodies Saturday night.
While the initial plan was to set aside 25 percent of oil and gas severance tax revenues above $175 million, the House of Delegates voted to take a flat 3 percent from the severance taxes from all extractive industries. Also, principal funds would have been inviolate under Kessler’s plan; the House model allows the principal to be spent with a two-thirds majority vote of each legislative chamber.
Senate Majority Leader John Unger, D-Berkeley, said the changes “drastically reduced Future Fund in some respects.”
Three triggers prevent contributions to the fund:
– If revenue in the Rainy Day Fund is less than or equal to 13 percent of the general fund.
– If the governor relies on the Rainy Day Fund to balance the budget.
– If there are midyear hiring freezes.
Senators from coal-producing counties were skeptical of dipping into coal severance taxes, a percentage of which returns to the county.
Sen. Ron Stollings, D-Boone, said he needed to be convinced the move wouldn’t hurt the tax return to county coffers and the economic diversification fund.
“If we can’t do something in our coalfields to diversify the economy, the whole state is going to be in trouble,” Stollings said.
Finance Chair Roman Prezioso, D-Marion, said the formula for coal severance tax revenues would remain the same, with funds going back to counties before the 3 percent deduction for Future Fund.
Sen. Mike Green, D-Raleigh, said he agreed with the concept of the Future Fund, but the “devil is in the details.”
Green, who is on the Senate Committee on Finance, said taking 3 percent of extractive industries severance tax revenues without the baseline means that money won’t make it into the general fund, a troubling proposition in a fiscal year when balancing the budget has been difficult.
“Those dollars are being spent somewhere today,” Green said. “We’d be taking $16.4 million out of general revenue fund when we know we’re going to be coming out of these lean years, when we’re dipping into the Rainy Day Fund.
“I’m just concerned…”