LITTLE ROCK, Ark. – Senate President Jeff Kessler (D-Marshall, 02) will close out the week in Arkansas where he’ll talk about West Virginia’s Future Fund during a briefing from the Southern States Energy Board. That briefing is being held in conjunction with the Southern Legislative Conference in Little Rock.

Senate President Jeff Kessler (D-Marshall)

“(In the past) We haven’t planned for the long-term future of this state. It’s always been short-term, Band-Aid solutions,” Kessler said. “This will put us on the path of long-term prosperity in using the law of simple economics of supply and demand that West Virginia is sitting on what the rest of the world needs.”

Earlier this year, the Legislature created the West Virginia Future Fund which will serve as a type of endowment fund for the years ahead by banking a portion of present-day severance tax collections on natural resources like coal and natural gas.

As the new law is written, it could be 2019 before the first deposits are made into that account. Any future investment income generated would be earmarked for education, workforce development, economic development, infrastructure or tax relief projects.

Kessler said saving is important. “Had West Virginia just taken one percent, one percent of its severance taxes in 1975 and put it in a savings account, so to speak, we would have $8 billion dollars today.” He said, at a 10 percent interest return rate, that would have added up to $800 million each year for state projects.

“That’s why we’re in the position facing these problems, year after year, decade after decade, is because we haven’t had the good sense to put the money in some type of permanent endowment fund that can be used to do those big projects,” Kessler said.

Kessler will talk about the Future Fund during a Friday morning panel in Little Rock focused on legislative action in states. Florida House Representative Jose Felix Diaz (R) and Missouri House Representative Rocky Miller (R) will also be part of the discussion that Oklahoma House Representative Weldon Watson (R) will moderate.

Nearly 1,000 delegates, legislative staff members and guest are expected to attend this weekend’s Southern Legislative Conference.

Kessler was a guest on Thursday’s MetroNews “Talkline.”

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Comments

  • Don B

    WV had a $265 million deficit this year closed using budget cuts and $150M from Rainy Day fund. Next years budget looks equally bleak. In addition, the Rainy Day Fund is now below the 13% threshold of the general fund in order to contribute the the Future Fund. So what are the chances that anything ever will be deposited in the Future Fund? Besides the projected Funds (if allowed to deposit) would only be $18M in 2017. The state could have raised that much by not giving a $25M tax break to a billionaire. WV got an "F" grade on the National Education Report card and so instead of funding education you give money to a billionare coal baron

  • sammy

    I just wish he would hit the road, period!

  • Jeff Kessler

    Check out the splendid performance of the WV Investment Management Board which has obtained in excess of 10% returns on most of our pension plans and endowment fund investments: http://tinyurl.com/ofn85xv

    • ViennaGuy

      Senator,

      If I'm reading page two correctly, I'm seeing 10-year investment returns running in the 5% to 8% range, which is normal for long-range returns.

      There is no question that the rate of return for five-year and shorter time spans is excellent; however, it has been, and continues to be, driven at least in part by the Federal Reserve's quantitative easing policy that started in November 2008 and continues to this day. My own 401k plan has seen annual returns north of 10% per year over the same time span; it saw 21% last year alone. That being said, the Fed's money pumping and the market's response is a historical aberration that cannot continue indefinitely, lest we see the inflation monster make a big comeback due to devaluation of the dollar. I'd also like to note that when the Fed announced a tapering in quantitative easing and a possible interest rate increase in June 2013, the stock markets immediately dropped over 4%. The Fed subsequently announced that it was not going to reduce its efforts at quantitative easing or raise interest rates.

      So if I may, I would like to ask you: is it your contention that investment returns north of 10% would continue even if Fed pumping came to a stop, which it eventually has to do?

    • Aaron

      In addition to maintaining what we already have, West Virginia is in dire need of money to complete Corridor H, I-73/74, The King Coal Highway, The Bluefields Expressway, widening Interstate 64 from Nitro to Huntington that will require nearly a billion dollars in revenue, a by-pass of Charleston from Interstate 64 to Interstate 77 North, widening of Route 2 from Parkersburg to Weir among numerous city and county projects. Clearly the need is greater than what keeping tolls on the turnpike can provide. So when can we expect the legislature to address these needs under your leadership?

    • Aaron

      What are you going to do about infrastructure Mr. Kessler? Can we expect leadership from Charleston or is the plan going to continue to remain one of the top states in federal dollars received versus taxes paid and have the federal government address West Virginian needs?

  • David

    SLUSH FUND is what it really is ...

  • ViennaGuy

    10%? Really? That's the kind of talk which got the state Consolidated Investment Fund into hot water back in the 1980s.

  • Aaron

    “(In the past) We haven’t planned for the long-term future of this state. It’s always been short-term, Band-Aid solutions,”

    If Senator Kessler was a visionary leader, he would look to place that money into the one thing that can lead to long term prosperity and that is investing it in our infrastructure, both in maintaining what we have but also in building new infrastructure.

    Instead, we get this tripe he calls a future fund.

    • Mason County Contrarian

      He's another politician getting reelection campaign material ready, Aaron.