State Senate President Jeff Kessler, D-Marshall, will lead a legislative delegation to North Dakota later this summer to take a firsthand look at how that state has managed its energy boom.
Specifically, Kessler is interested in North Dakota's Legacy Fund.
In 2010, North Dakota voters approved the dedication of 30 percent of oil tax collections into an interest-bearing fund. The money cannot be spent until 2017, and then only with the approval of two-thirds of the Legislature.
The Legacy Fund is growing dramatically because of the oil boom. North Dakota's oil production has risen from seven million barrels a month in 2009 to 24 million. As a result, the Legacy Fund now has over $1 billion in it.
Kessler believes West Virginia should create a similar program. He proposed a bill during the last legislative session that would dedicate 25 percent of the increase in tax revenue from gas and oil production from the effective date of the bill into the West Virginia Future Fund.
Lawmakers would not be able to touch the money for 20 years, and then the money could only be used for "future needs that may arise, including diversification of the state's economy, tax relief, enhancing education and workforce development and for purposes for which other funding sources are not available."
The bill failed last session, but Kessler will use the trip to try to generate renewed interest in the idea. He wonders aloud how big a Future Fund West Virginia would have if it had created one from coal taxes years ago.
Kessler's idea deserves a full debate because there are plenty of pros and cons.
On the positive side, the miracle of compounding interest is an attractive feature because it allows wealth to build. A large fund would become another source of revenue to help pay for the government services people demand.