The bill, proposed to terminate taxes imposed under the Workers’ Compensation Debt Reduction, does not impact standard severance taxes but drops additional surtaxes 56 cents per ton of coal and 4.7 cents per thousand cubic feet of gas.
Tomblin has set July 1 as the effective date for the cut, or earlier at his discretion. State media have estimated that the slice will reduce coal severance tax revenue by $51.5 million on the state’s 2017 budget, and another $58.1 million in revenue from the natural gas industry.
The governor, who introduced the bill, thanked the West Virginia Legislature for passing it.
“I appreciate the work…to come together and pass this critical legislation to pay off the state’s old workers’ compensation debt more than a decade ahead of schedule, lowering severance taxes on our coal and natural gas industries. This legislation provides flexibility to fill the current year’s budget shortfall, while keeping the promises of nearly 10 years ago,” Tomblin said.
Initial approval from the state Senate was also reportedly given this week to an overall severance tax reduction to 4% from 5% by July 2018. Another drop to 3% would follow by July 2019, according to the Associated Press.