Coal revenue has declined in the Mountain State, according to the governor. And natural gas production has slowed, too, because of a number of pipeline lawsuits. Last year the state took in a record $511-million dollars in taxes, but now in the first month of the new budget year has a $30-million dollar shortfall, due to the severance tax declines.
“We’ve had a real drop-off in coal pricing on the thermal side and coal ricing on the metallurgical side. We’ve had a drop off in pipeline construction from the standpoint of Supreme Court rulings. And we’ve had a drop off in gas prices,” said Governor Jim Justice, (R) West Virginia.
Just a week ago Justice was championed the state’s GDP numbers and jobs growth. Also last week the legislature approved supplemental spending increases for schools and roads. But future spending may have to be curtailed if the current shortfall continues.
“I’m not too concerned with just one month into the new year. But now if we get a trend of four or five months in a row, then we’ll have to go back and take a look at the budget,” said State Sen. Bill Hamilton, (R) Upshur.
Critics say West Virginia continues to rely too much on the energy industry, which is part of the international economy that has the most ups and downs.
“While admitting the numbers are disappointing, the Governor says this is no time to panic just one month into the budget year. And that the revenue is more of a reflection on the volatility of West Virginia’s economy over the years,” said Mark Curtis, 13 News Chief Political Reporter.