North Dakota can teach us some things
A delegation of Democrats and Republicans from the West Virginia Legislature traveled to North Dakota to learn about that state's Legacy Fund, a savings account for oil and gas tax revenues.
The trip, led by Democratic Senate President Jeff Kessler, is a move to learn about a promising program in another resource-rich state. North Dakota voters approved that state's Legacy Fund in 2010.
Thirty percent of North Dakota's oil and gas tax
collections flow into a trust. Interest revenues will be directed to the state's general revenue fund. With booming oil production, the fund has collected $1.3
billion in just under two years.
North Dakota is not the only state with such a trust fund, although it among the newest.
Texas set aside land for its university system in the 1870s, and later directed oil and gas royalties into a Permanent University Fund. Today, the $14.4 billion fund is the nation's largest public university endowment.
The idea of a carefully constructed Legacy Fund for West Virginia that captures value without creating an undue tax burden is worthy of consideration.
"If we had saved a penny, or a nickel, or a dime a ton from our coal reserves we'd be one of the richest states in the union instead of one of the poorest," Kessler said.
With the shale oil and gas boom, West Virginia has a second chance.
Yet it may not be as simple as it sounds.
Coal severance revenues are declining due to changes in the coal market, caused partly by the
Obama administration's aggressive anti-coal stance.
The state is looking for an additional $400 million a year for bridge and roadway improvements. House Minority Leader Tim Armstead, R-Kanawha, makes a good point when he says it will be a hard sell to sock money away while raising taxes for roadway infrastructure.
State Republicans also want to eliminate the state's regressive inventory and warehouse tax and use some severance revenues to replace that job killer.
Fortunately, statements from the legislative leadership indicate an understanding that the shale boom is not the time to spend recklessly and fund pet projects.
The citizens of West Virginia appreciate the leadership's investigation of worthwhile programs in other states, and look forward to seeing a thoughtful long-term plan to strengthen West Virginia now and in the future.