UPDATED TO ADD THE FOLLOWING: On the final night of the 2014 Regular Legislative Session, the House changed the bill to set aside three percent of all severance tax revenues and the Senate agreed to the change.
There is no minimum amount severance tax collections must meet before the money starts going into the West Virginia Future Fund. That could create problems in the tight budget years ahead.
CHARLESTON, W.Va. — “It is a future fund building for our future,” said Senate President Jeff Kessler (D-Marshall, 2) of his legislation approved that was approved on the final day of the 2014 Regular Legislative Session.
Kessler’s supported the proposal for years. “We’ve (now) got the framework in place,” he said. SB 461 has been sent to Governor Earl Ray Tomblin for his signature.
With the bill, 25 percent of annual revenues from severance tax collections in excess of $175 million will go into the Future Fund account, an interest-bearing investment account, beginning in July of this year.
The bill would not allow lawmakers to spend any income from those investments until 2020. At that point, the money could only be used for economic diversification projects, infrastructure projects and education enhancements.
Kessler said he does not expect any money to start flowing into the account for the next two years, at least. “I wanted a structure in place to make sure we capture some of this and save it for our future,” he said on Monday’s MetroNews “Talkline.”
“As soon as we get through these next two tight budget years and we actually start running a surplus again, and I think we’ll be running at an even bigger surplus if the projections I’m looking at come in with oil and gas, then the money will start flowing into that fund.”
Kessler said the legislation is a first step. Next, he said, the focus will turn to a Constitutional amendment further limiting how the money generated from the West Virginia Future Fund is spent and, additionally, the identification of possible other revenues for the account.