West Virginia Fossil Fuel Severance Tax Impacts State Budget

In October, West Virginia Gov. Jim Justice announced he was considering a $100 million mid-year state budget cut to recover a $33 million deficit from the first third of fiscal year 2019.

West Virginia Deputy Revenue Secretary Mark Muchow attributed a drop in revenue to the low state severance tax collected due to a slower market for natural gas and coal than originally forecast. In March, the governor signed a bill lowering the state’s coal severance tax rate.

The West Virginia Center on Budget and Policy, a research organization, has proposed an increase in the natural gas severance tax to boost state revenue. Although extractive industries are typically opposed to the tax, the center argues that an increase is feasible and would benefit West Virginians. — By Jack Singletary