The Register-Herald, Beckley, West Virginia

Editorials

April 17, 2014

New thinking

The Raleigh County budget for 2014-15 is now set, clocking in at $19.6 million for the year.

The budget passed by the county commission is about the same as the previous year, an acknowledgment of the county’s and the state’s gradual but slow economic recovery.

Also like last year, a significant portion — $2.1 million — of the budget comes from coal severance taxes.

Those taxes fund multiple county services and offices, from the agricultural agent to the courthouse to the New River Gorge Regional Development Authority and other economic development engines.

Raleigh County is not the only county in West Virginia to be so dependent on the coal severance tax.

And that dependency on coal tax revenues to fund such a large portion of our public budgets in West Virginia is a problem.

On Tuesday, Sen. Joe Manchin, D-W.Va., urged coal mining interests to become more vocal about the importance of coal in power generation as a way to counter regulatory actions by the Environmental Protection Agency that make building new coal-fired power plants financially unsound.

Coal at present provides about 40 percent of U.S. power generation, and unlike solar or wind energy, is there whether the sun shines or the breezes blow on any particular day.

We wish Sen. Manchin success in his efforts, and hope that coal continues to be a factor in power generation in the United States.

But West Virginia must begin its preparation for a life without coal — or coal severance taxes.

As Charles Patton, the savvy president and COO of Appalachian Power told The Register-Herald in January, the outlook for coal as a fuel for power generation will continue to dim, and it won’t matter which party or administration controls the White House.

 Yet there are alternatives that are being explored to diversify our economy in southern West Virginia, like the Mega-Site project.

It is no secret that West Virginia has missed almost every opportunity to lay a foundation for its financial future from the very beginning of coal mining in the state.

And there’s no point in attempting to place blame for mistakes of judgment or errors in economic modeling that were made decades ago.

But there is time to adjust our thinking for what’s ahead of us.

We have applauded Senate President Jeff Kessler, D-Marshall, for his eager and forceful pursuit of his vision of the Future Fund, which will set aside a portion of state taxes from natural gas production from our shale formations.

That passed the Legislature this year.

Even we have indulged in rather pointless musing over the question of “what if?” such a thoughtful and far-reaching idea as the Future Fund had been implemented 40 or 50 years ago for coal.

Where would West Virginia be now, financially?

There’s, of course, no answer to that.

But the passage of the Future Fund shows that there is new thinking in West Virginia, and that innovative ideas can be debated, agreed to and win over a majority of lawmakers as well as the public.

The best way to address the failings in our past financial planning is to start looking for alternatives to the coal severance tax today.

The Future Fund shows us that the right ideas are out there.

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