The Register-Herald, Beckley, West Virginia

August 24, 2013

Kessler: Voters may hold fate of ‘future fund’

Legislature on the road in North Dakota

By Mannix Porterfield
Register-Herald Reporter

CHARLESTON — There’s no finer method of gauging public sentiment than a formal vote in an election, and Senate President Jeffrey Kessler is toying with letting West Virginia voters decide the fate of a proposed “future fund” fed with taxes collected from natural resources.

Moreover, Kessler says he is inclined to shorten the period in which West Virginia could tap into such a fund from the originally proposed 20-year delay.

Reached in North Dakota, where he and fellow lawmakers learned how the Peace Garden State devised its own special account to deal with future needs, Kessler confirmed that he is already laying the groundwork for a second effort when West Virginia lawmakers meet in January.

“I’ve been working on something from last year,” he said of legislation that never reached the Senate floor for a vote.

“I think we’re looking at shortening the time frame. And the other thing is we may perhaps go the constitutional revision route where it would require a vote of the people in order to convey the principle of the fund.”

Kessler said it is important to provide an assurance that politicians will keep a promise not to drain the fund every time a need arises, be it a raise in the public sector, or a road in disrepair.

“You say you’re going to put it aside for the future and save it and then some need comes up in a tight budget year, and the next thing you know, you’re invading it,” the Senate president said.

Pressure came in North Dakota as soon as its own “legacy fund” was erected, he noted, adding some wanted to plow into it in a bad budget year.

Kessler said the bipartisan delegation from West Virginia learned a lot and seemed supportive of assembling a future fund in this state.

“They were exceptional in making us feel welcome and having a full and free discussion over what they did, what their shortcomings were, and what mistakes they made, and what recommendations they had for us,” he said.

 In his original concept, Kessler wanted such a fund as untouchable for fully two decades.

“It’s probably hard for politicians who run in two- and four-year cycles to put off anything that long a period before they want to see an immediate benefit,” he said.

“People have a tendency, in particular legislators, and even the public, to want to see an immediate return in what they’re doing. Twenty years may be too long. We may want to shorten that time frame to something where folks may say there’s actually some benefit in this, in my lifetime, or the near future.”

Kessler said he hopes to strike a balance in putting aside some money for the future and handling the immediate needs of the present, not unlike the manner in which a family regards its household budget.

“We like to have a little money and put it in a savings account or a 401k and try to save a little bit for the future if we can,” he said.

“At the end of the day, we all wish we could save more. At the end of the day, I really think finding that balance between meeting our needs but having the good sense to put some aside for the future is sound financial planning as most of us think we ought to run our own lives and households.”

North Dakota built up $1.3 billion in a short time, a figure that left many in the delegation impressed, such as Sen. Daniel Hall, D-Wyoming.

The idea in West Virginia is to capture taxes from the growing Marcellus shale natural gas production, and Hall says one negative learned in North Dakota was that a gas boom there spawned some social problems.

“They didn’t have enough housing and water and sewer in some remote areas,” Hall said.

With migrant workers pouring into the state, he said, crime became a major problem, exacerbated by the lack of law enforcement in some rural pockets.

“They’re high-paying jobs but they’re migrant workers away from their families,” the senator said.

“You get more people in an area, you’re going to have more crimes. There are a lot of issues to deal with. One of the great things, though, is they’ve got so much money they don’t know what to do with it.”

North Dakota lawmakers provided a document detailing the flow of funds from the “legacy fund,” which Hall likened to our own lottery account, which specifies that certain expenditures come off the top — seniors, Promise Scholarships and so on.

“What’s left over goes to other places, and that’s kind of what they’re doing,” he said.

“There are Native American tribal lands out there, so a portion of their money goes to that, too. They’re not just taking all this gas money revenue and putting it in this fund. They’re paying other things first, and they’ve got a pile more.”

Hall and Kessler agreed the Senate should be in a better posture now to get legislation to the governor’s desk.

“No doubt about it,” Hall said.

“We’ve learned a lot. Several times you looked around the room in meetings and you’d see eyebrows raised when a point was brought up, or a bit of information brought forth.”

Hall said he was impressed with a section of the North Dakota law that provides an arbitration process on compensating surface owners for the use of their property when drilling occurs there.

“It’s laid out in very detailed law,” he said.  “It looks like something we need to look at.”

Kessler said he thought it was wise to include several Republican lawmakers on the North Dakota conference.

“It will take a bipartisan effort,” he said.

“You get good government and sound policy when there’s no monopoly on it by the D’s and R’s. It will take us working together to try to do what’s best for the future and present as well. We have a golden opportunity with another bite at the apple by being blessed with an abundant natural resource and an abundant supply that the rest of the world wants and is willing to pay an enormous amount of money to get, so there’s no reason we need to give it away.”

— E-mail: mannix@register-herald.com