January?13,?2012?? Mining and exports are the driving factors in West Virginia?s revenue situation for the next fiscal year. The fiscal forecast was presented to the House Finance Committee Thursday morning.
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Revenue grew by 3 percent for the 2011 fiscal year bolstered largely by coal and exports.? The state?s deputy director for revenue Mark Muchow said that could change with a fluctuating financial situation in Europe.
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?Coal has been the major export, unfortunately, Europe consumes about 40 percent of that coal,? Muchow said. ?Because there?s the possibility of recession in Europe, it could have negative consequences heading into the future for West Virginia.?
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?Therefore, our forecast for revenue growth is closer to that 1 percent level.? We hope that the natural gas severance growth offsets what we see as a decline in coal severance growth.?
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Coal severance makes up roughly 90 percent of severance taxes compared to 10 percent from natural gas.? Muchow said it makes the price of natural gas a crucial factor.
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?All that increase production in natural gas we?re projecting in the next few years, someone?s got to buy it,? Muchow said. ?If there are no consumers of that gas, the price falls.? There are more uses of gas, one of which is electric power generation.?
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?Hopefully there will be expansions into other industries as well as consumers.? This will hopefully enhance production and enhance state tax revenues.?
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The state?s total general revenue for last fiscal year was $4.1 billion.?
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West Virginia?s revenue growth was the fifth highest in the United States.? House Finance Committee Vice-Chair Tom Campbell said there?s a plus and a minus to that production.
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?West Virginia just keeps chugging along,? Campbell said. ?West Virginia as a state continues to do well.? Now the downside of the per capita income, which we?ve been struggling with as it goes up, is our federal assistance goes on.? I?d rather have more independence on the federal government than dependence.? I think that?s just a good way to go for all of us.?
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Campbell also cited West Virginia?s growing senior population as a concern.?
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?The governor proposed last night in keeping some reserves for a couple factors,? Campbell said. ?One, mining may go down and we have the added burden of seniors, which I?ll be one of those in 10-15 years.?
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?I think West Virginia through different governors and legislators has done a good job of balancing.? This legislature will work with the budget, there will be some changes tweaking.? But I agree with the general philosophy that we have to provide for the present but also fund the future.?
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Funding the future gets more difficult with a senior population that is expected to grow by more than 35 percent over the next 10 years.? West Virginia currently has the second oldest population, behind Florida, according to the 2010 census. It's expected to remain among the top three over the next decade.?
Source: http://www.wvpubcast.org/newsarticle.aspx?id=23492
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