An editorial from The Journal
MARTINSBURG, W.Va. — Exports are a key component of West Virginia’s economy – but they were down drastically last year. That does not bode well for state budget planners.
During 2012, state businesses exported $11.3 billion in goods. But last year, the total plunged to $8.4 billion, almost entirely because coal exports declined precipitously. Coal exports were down to $4.4 billion in 2012.
As Gov. Earl Ray Tomblin emphasized in discussing a report on exports, the past three years have been record ones. The 2012 amount was the highest ever recorded.
So the drop last year was not unexpected. Even accounting for it, 2013 was the third-best year on record.
Coal severance taxes have been a mainstay of the state budget, ranging between $400 million and $500 million a year. So when coal production drops, so does revenue feeding into the budget.
Other factors have contributed to revenue falling far below projections during the past year, of course. But coal, in part because of direct severance tax payments into the budget and also because it is an indicator of the health of the rest of the economy, bears watching…