By Mannix Porterfield
Marcellus shale exploration ultimately might play a hand in erasing the red ink in the Other Post-Employment Benefits (OPEB) debt.
Not that this means a heavier tax burden on the industry, emphasizes Senate Finance Chairman Roman Prezioso, D-Marion, one of five senators named to a special subcommittee that seeks to resolve the OPEB liability.
“I want to look at some funding sources that could be available with the enhancement of Marcellus shale,” Prezioso said Thursday.
“I’m also realistic in knowing I don’t want to scare off an industry. I think the next big thing we’re looking at is the cracker plants.”
Those facilities are used to refine ethane so that chemicals are produced to be used in the manufacture of other products, such as plastics.
“That would give us a tremendous opportunity that will raise additional revenues,” the finance chairman said.
Rather than add new taxes on the industry, he explained, the state would reap the benefits of an expanded industry that translates into a healthier tax base.
“After all the gas is out of the ground, we’re not going to be left here with barren lands,” Prezioso said.
“We’re going to be left here with pristine property and some money in the bank that our children will be able to utilize, going forward.”
Just this week, the Public Employees Insurance Agency’s finance board trimmed health benefits by $18.4 million and moved to slice the overall liability rolled up by retired workers by some $4.8 billion. In effect, that would cut the OPEB liability in half.
That means the state could amortize the liability in 32 years, rather than 40.
“I want to get this thing controlled now just like we did the retirement programs and get the liability off the backs of those county boards of education, who have no funding source whatsoever to pay it off,” Prezioso said.
“They never got themselves into this position. The Legislature did. We did the negotiating with the special interest groups. We incurred the debt. We were responsible to pay that off. It’s our responsibility.”
As for eyeing more money from Marcellus shale, Prezioso recalled his boyhood, growing up in the little coal town of Monongah.
“I see the things that happen when you have an industry that drives your community,” he said.
“Certainly, it’s good for the economic development of a community. I remember my little community — a slag pile, roads that were always dusty. There are a lot of things that incurred and were left after it was all over. In the town of Monongah, where I grew up, we don’t have anything here. We’ve got a couple of convenience stores. That’s it.”
Nothing is set in stone for now, and Prezioso is serving on a subcommittee that includes as its chairman, Sen. Robert Plymale, D-Wayne, in deference to his experience in working with pensions; Sen. Brooks McCabe, D-Kanawha, who has led an effort more than a year to get the OPEB debt reined in; Sen. Doug Facemire, D-Braxton, who co-chaired the 10-member select panel on Marcellus shale, and Senate Minority Leader Mike Hall, R-Putnam.
Different ideas likely will emerge, but on one point, Prezioso personally is adamant — leave the Rainy Day fund alone. One potential source to drive a revenue stream is the future availability of money now detoured into wiping out the Workers’ Compensation fund.
“We don’t have anything definite,” Prezioso said.
“This is our next big obstacle when it comes to the financial stability of this state and we want to address it in this session.”
Senate President Jeffrey Kessler, D-Marshall, set up the five-member panel at the close of the special legislative session this week on Marcellus shale.
“West Virginia’s fiscal house is in order, with the exception of one major outstanding issue, and that’s OPEB,” Kessler said.
“I want to tackle OPEB and get it under control. It’s the last piece of the long-term financial debt problem that is on our plate.”
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