Newspaper article Charleston Gazette Mail

Senate Moves Forward on Gas, Coal Tax Rollback

Newspaper article Charleston Gazette Mail

Senate Moves Forward on Gas, Coal Tax Rollback

Article excerpt

West Virginia's $353 million revenue shortfall, and the resulting budget crisis, isn't severe enough so far to preclude a planned rollback on taxes for coal and gas companies. Democratic Gov. Earl Ray Tomblin has proposed more than $110 million in planned tax cuts for the coal and gas industries, by removing "excess severance taxes that were originally implemented to pay off the state's old workers' compensation debts.

The state Senate on Wednesday rejected an amendment from Senate Minority Leader Jeff Kessler, D-Marshall, that would have kept those taxes in place until the state's Rainy Day Fund is refilled.

The amendment would have kept the taxes until the Rainy Day Fund was restored to where it was before withdrawals in recent years necessary to balance the budget, amid declining revenues.

"Before we start cutting business taxes, let's at least get our house in order and have our Rainy Day Fund fully replenished, Kessler said. "We keep taking money out of the Rainy Day Fund, pretty soon we're going to be in a position where our bond rating is not looked on favorably.

Kessler's amendment would have kept the "excess severance taxes in place for somewhere between six and 18 months, depending on tax receipts.

As it is, the taxes would be removed on July 1. The two "excess severance taxes brought the state more than $122 million in the 2015 fiscal year, with slightly more than half the money coming from coal and the rest from gas.

Senate Finance Chairman Mike Hall, R-Putnam, said that the state's coal industry, reeling with layoffs and bankruptcies, had asked that the tax be removed even sooner than July 1.

"The coal industry has come here, it's asked for some relief and actually wanted to be out of this tax as soon as this month, Hall said, noting that the tax cut was Tomblin's proposal. "In his determination, of the revenue problems we've got, plus the struggle in these industries, that it's a good thing to give them certainty.

Kessler's proposal to keep the tax in place was "not consistent with the policy of the governor's bill as he's worked it out with the people who are directly affected, Hall said. …

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