WV LEGISLATORS CUTTING TAXES ON COAL AND GAS WITH $400 MILLION DEFICIT?

The West Virginia Senate passed big tax cuts for the coal and gas industry this week, at a time when the state faces huge budget deficits while it is raising taxes on consumers.

The bill was pushed by lobbyists for the extractors.

A push to raise West Virginia’s tobacco taxes has been voted down by a House committee, likely killing a second tax increase proposed by Gov. Earl Ray Tomblin.

Delegates voted 21-3 Thursday against a bill to raise the cigarette tax by 45 cents to $1, worth $71.5 million yearly. Tobacco lobbyists have opposed the increase, with the state having among the lowest tobacco taxes in the nation.

The cuts would lower the severance tax rate paid by coal, gas and oil companies by 40 percent by the 2019 fiscal year, a loss to state and local governments of about $170 million per year, according to one estimate.

The state government is already reeling with a major deficit over the decrease in coal and natural gas production.

The bill (SB 705) passed 19-15, with the support of every Republican. On the Democrat side, all but Sen. Jack Yost, D-Brooke, voted against the tax cuts.

Coal and gas currently pay a 5 percent severance tax on the total value of the minerals they extract from the ground. That tax rate would fall to 4 percent in July 2017, and then to 3 percent in July 2018.

This week the WV Senate on Tuesday significantly amended a bill, adding a 1 percent sales tax, to raise about $200 million a year, along with increases in DMV fees.

“I just find it hard for us to turn around and say our solution to the state’s fiscal woes is to grant more tax cuts to business and industry and put more tax burden on the people we represent,” said Senate Minority Leader Jeff Kessler, D-Marshall.

Democrats argued that the bill would do nothing to keep mines open and amounts to a giveaway to the industry.

Murray Energy CEO Bob Murray, who runs the West Virginia’s largest coal company, has been asking lawmakers for an immediate cut in the severance tax for nearly a year. Murray also is a major Republican donor, having given $250,000 to get Republican legislators elected in 2014.