Coal Severance Tax Story Archives - Page 2 of 2 - West Virginia Public Broadcasting

Bill Would Cut Both Coal and Natural Gas Severance Tax Rates

During a session that has largely focused on how lawmakers will close a nearly $400 million budget gap, the Senate will vote on a bill Wednesday that will cut taxes for both the coal and natural gas industries.

Both industries are set to benefit from a bill signed by Governor Tomblin this week. That bill ends a special severance tax on coal and natural gas that was implemented to pay off West Virginia’s Worker’s Compensation Debt.

Late in the session, members of the Senate Finance Committee presented another bill to the chamber that would cut the standard coal severance tax by 2 percent over the next two fiscal years.

The end result would be a severance tax of 3 percent by July 1, 2018, which is estimated to cost the state more than $100 million in revenues.

Tuesday, members of the Senate amended the bill to include a cut in the severance tax on natural gas as well.

Sponsors say both industries are hurting and the tax breaks could help prevent further job losses.

The state is facing a $466 million revenue shortfall in the 2017 budget.

House Votes to Drop Coal, Natural Gas Surtax

West Virginia is looking to drop surtaxes on coal mining and natural gas drilling.

The House voted 96-3 Thursday to approve dropping the additional severance tax of 56 cents per ton of coal and 4.7 cents per thousand cubic feet of natural gas. The Senate previously passed the bill, and still would need to vote on House amendments.

The surtaxes have helped pay a workers’ compensation debt for years.

Democratic Gov. Earl Ray Tomblin proposed dropping the two levies.

The surtaxes would be effective July 1, leaving the governor the option to eliminate them earlier.

Tomblin’s administration expects it would cost $51.5 million in lost coal revenue and $58.1 million lost from natural gas in the 2017 budget year.

Standard severance taxes on coal and natural gas wouldn’t be affected.

Murray Urges Bigger Cut Than Tomblin Laid Out

Gov. Earl Ray Tomblin wants to give struggling coal producers a break by dropping a tax used to pay down a worker’s compensation debt.

That debt should be paid off this year. Coal’s portion brought in $64 million last budget year.

However, coal giant Murray Energy says eliminating the 56-cent-per-ton levy to unearth coal isn’t enough.

Murray spokesman Gary Broadbent says the company wants coal’s severance tax dropped from 5 to 2 percent.

Department of Revenue spokeswoman Lalena Price says the change would cost well more than $100 million and isn’t something the Tomblin administration can consider.

The state already expects a $384 million gap this budget year and a $466 million gap in 2017. Both are largely due to sharply declining coal and natural gas severance tax money.