UPDATE: W.Va. Senate passes Future Fund bill unanimously
CHARLESTON, W.Va. -- West Virginia's future may be a little brighter.
The Senate on Friday passed a bill to create a Future Fund, made up of a portion of oil and natural gas severance taxes. Senate President Jeff Kessler, D-Marshall, has championed the idea for years and said he was pleased to see Senate Bill 461 pass unanimously.
"I was quite delighted and pleased the bill passed out of this body unanimously," Kessler said. "It's something I've been working on for several years and I'm pleased to see it move out of here without any resistance or objection."
Senate Bill 461 sailed through two committees, and 31 of 34 members signed on as cosponsors.
The legislation is pretty simple -- 25 percent of any severance tax revenues above $175 million will be placed into the fund. Money from the fund can't be spent or appropriated until 2020, and then only the interest money can be used. The $175 million figure was chosen so the Future Fund wouldn't affect the state's budget for the next two years, when analysts project oil and natural gas severance taxes will remain below that threshold. In fiscal year 2015-2016, however, revenues are projected to top $176 million and grow for the next few years.
Kessler modeled West Virginia's Future Fund after similar programs in other states. He and a group of lawmakers traveled to North Dakota, which is seeing an economic boom from oil, over the summer. Kessler credits that state's legacy fund for its recent successes.
"Obviously the state that had the most rapid rise in population in 2013 was North Dakota," Kessler said. "They started their legacy fund two years ago. The report that came out yesterday was distressing to me with West Virginia ranked at the bottom in healthy lifestyles. Guess which state led the nation in having the healthiest citizens? North Dakota. I think there's a correlation between the fact they're saving money that attracts jobs and healthy lifestyles and improves the quality of life for their citizens. That's what I want to do.
The passage of the bill comes at a time state officials are preparing for a tight budget year. Gov. Earl Ray Tomblin has proposed taking more than $200 million from the state's rainy day fund to help balance the budget. In addition, the Governor's Blue Ribbon Commission on Highways has said the state needs $1 billion to repair infrastructure throughout the state. Kessler contends if the Future Fund had been implemented decades ago, when coal was king, the state wouldn't be forced to stretch its budget.
"The fact we have such significant budget stresses emphasizes the point -- why are we here and how did it happen and lets make sure it doesn't happen again," Kessler said. "With proper planning we can ensure it doesn't happen again by leveraging our resources we can creating a fund of wealth."
Kessler pointed out the rainy day fund should be used for natural disasters, emergencies and temporary, not longterm, budget dips.
"The future fund is more of a progress fund -- a fund that would be available to create long term and long standing wealth for the people of the state," he said.