Senate Bill Would Reduce Coal Severance Tax to 3 Percent

The Senate is advancing a bill that would reduce the state’s overall severance tax on coal to 3 percent over the next two years.

Senate Bill 705 was written by the Senate’s Finance Committee and was read a first time on the floor Monday evening, but only after being debated by members of the full chamber. 

Lawmakers have already approved and Governor Tomblin already signed a bill that will eliminate an extra tax on the resource by this summer, but supporters say that legislation does not go far enough to aid the ailing industry.

Members of the Republican majority argued the tax reduction will lead to fewer costs for the industry and could help save jobs, but Senate Minority Leader Jeff Kessler argued the bill ties the hands of future lawmakers and reduces the revenues they can appropriate in future budgets.

A portion of the severance tax is given to counties to help fund services, and an extra percentage is returned to coal producing counties. Kessler said Monday by reducing the overall tax, coal communities will shoulder the cuts.

“The folks back home in my coal communities back in Marshall County, they’re suffering now, not two years from now and this will do not one thing for them, not one bit of good for them,” he said.

Despite the backlash, the bill is on track to be put to a vote on Wednesday. That day is the final lawmakers can vote on bills originating in their chamber.