Advancing bill to save fraction of oil, gas revenue in W.Va.’s best interest
An editorial from The Dominion Post
MORGANTOWN, W.Va. — Some are having a hard time making heads or tails out of Senate Bill 461.
After all, when did government actually start wanting to save money?
It spends it really well and has been known to spend money it doesn’t even have.
Better known as the Future Fund Bill, this legislation sets aside a fraction of the state’s oil and gas severance tax revenues for projects down the road.
That fraction is 25 percent of every dollar after the state collects the first $175 million in tax revenues from private oil and gas companies.
The fund would collect interest until 2020 — for six years — before using any of that interest to repave even a single mile of road.
Aside from infrastructure projects, such as roads, flood control, water or wastewater facilities, it could also be used for economic development, post-mining land reclamation and even help enhance public schools funding.
Projections of oil and gas severance tax revenues more than the $175 million benchmark certainly don’t look to be any sort of a fiscal gusher.
The coming fiscal year’s severance tax collections from oil and gas are estimated to be about $176.4 million. That translates into about $350,000 to start the Future Fund.
The interest from that is certainly nothing to sneeze at, but it’s no windfall, either, for now.
Far be it from us to project how this fund would grow in six years and the interest it would generate.
But despite ongoing budget cuts, revenue shortfalls and the deplorable condition of roads today statewide, Future Fund is a good idea.
There are some who advocate going for broke today because where they come from, there may appear to be no tomorrow.
West Virginia, of course, has seen its share of ups and downs in the past 150 years, but there is every reason to believe in our future.
Sen. Jeff Kessler, D-Marshall and the Senate president, recently noted if the state had saved 1 percent of its oil and gas severance revenue in the past 40 years it would now be worth about $800 million a year — in the interest alone.
Of course, the primary reason for most of our optimism is the state’s almost limitless wealth of energy resources, especially natural gas.
Future funds are not new. Texas, for instance, funds its entire higher education system with a portion of its gas and oil revenue.
No, we are not Texas and no our state’s Future Fund may never rival that kind of spending.
And the price of natural gas and oil is also hard to call now, let alone years from now.
However, saving for the future is never a coin toss.