Voices from West Virginia: Severance Taxes Fix Crumbling Roads and Schools

West Virginia now collects a severance tax at 5% of gross value of coal. This revenue supports the state’s General Fund, and a series of local funds.

WVSevTaxLast year, it generated $64 million last year to help pay off a workers’ compensation debt and even more to help cash-strapped counties.

Were Illinois to follow West Virginia’s model for distributing coal severance tax revenues, new revenues for the state government could amount to approximately $151 million in 2020, $190 million in 2030, and $225 million in 2040.

Like we’ve heard in Illinois, noncompetitive companies are asking for tax cuts. Bob Murray, Murray Energy CEO, is scrambling in West Virginia for any subsidies he can get.

Taxes could be raised on tobacco and alcohol, natural gas production and professional services to make up for the break for coal, Murray said.

But even billionaire coal company owner Jim Justice sees through that argument:

“Even though these cuts would mean more money in my pocket at my coal operations, it’s irresponsible at this time to do anything that will choke off support for fixing our crumbling roads and schools across West Virginia. It’s not the answer to creating jobs.”

Common-sense severance taxes provide real support to communities.

They are helping workers and families stay on their feet in West Virginia, and assisting local governments that need to fix roads and schools to keep the economy running.

As we’ve written before (and billionaire coal owner Jim Justice agrees), these taxes don’t hurt miner’s jobs, just CEO profits.

The Bottom Line: Severance Taxes bring essential revenue for communities. They do not impact jobs.

 

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