With Coal Down, Future Fund Idea Draws More Attention
Dan Heyman, Public News Service-WV
http://www.publicnewsservice.org/index.php?/content/article/27552-1
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(07/23/12) CHARLESTON, W.Va. - With Appalachian coal production down, more policymakers are looking at setting aside a portion of severance taxes in a future fund to help coalfield communities adjust. Sen. Jay Rockefeller says the state urgently needs to diversify, and one good step is a future fund supported by severance taxes. Rockefeller wants to bring more manufacturing to southern West Virginia and says a future fund could help. Or, he says, it could research ways to make coal itself more viable.
"The future can be manufacturing or the future can be clean coal. Not just alternative economic development, but it also could go to research on the technology which could make coal cleaner."
Many coal seams in West Virginia are thinning out, and many utilities are replacing coal with cheap natural gas.
According to a new report from the Central Appalachian Regional Network, states here could have tens of millions of dollars a year to invest in diversifying their economies if they set aside just 1 percent of severance tax revenues. Report co-author Roy Silver says the future fund should let the principal build up untouched, while states spend the interest. That way, he says, the states get the benefit of the natural resource, even after it's gone.
"You draw down on the interest and the principal remains there, even beyond the time where, let's say, there's no coal being produced in an area."
Silver, a professor of sociology at Southeast Kentucky Community & Technical College, says if West Virginia put 1 percent of severance tax revenue in the future fund, fairly quickly millions of dollars would be available for things like workforce retraining in communities hit by the low demand for coal.
"By 2015, the end-of-year principal balance would be $358 million. You'd have an interest generated of $31 million."
During the last session, the state legislature voted to study the future fund.
More information about the report can be found at the CARN website, www.carnnet.org.
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