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West Virginia lawmakers reject coal tax cut

World Coal,

West Virginia lawmakers have kicked proposed tax cuts for the state’s coal and gas industries into the long grass, according to local press reports. Despite passing in the state Senate, the House Finance Committee decided to move the bill into an interim study rather that put it forward for vote.

“Every member of this body, both chambers, without a doubt, realizes the concern we have with out job losses in the coal sector and the negative effects even in the gas sector,” said House Finance Chairman, Eric Nelson. “At the same time, I think everybody realizes the fiscal constraint were in right not and we’re structurally imbalanced; it’s very difficult times right now.”

Coal industry criticise decision

The move will come as a disappointment to West Virginia’s coal industry, which had lobbied hard for the tax cuts. A spokesperson for Murray Energy, the state’s largest coal producer, accused the lawmakers of abandoning coal miners. In January, Robert Murray, President and CEO of Murray Energy, has blamed the tax for the decision to layoff over 600 miners at the end of 2015.

Last month, a study from PwC found that reducing the tax could also boost state GDP as well as creating 1864 direct and indirect jobs. West Virginia’s coal severance tax currently stands at 5% - one of the highest rates in the country. The proposed legislation would have brought that down to 2%.

A coal industry in crisis

“Our industry’s in crisis right now,” Bill Raney, president of the West Virginia Coal Association told the Charleston Gazette-Mail. “We’re terrifically disappointed, because we need some assurance that we’re going to be able to get our costs down so we can compete, keep the miners working, keep the mines open.”

West Virginia has been worst hit by the downturn in the US coal industry with its higher-cost mines unable to compete with the low-cost high-efficiency longwall mines of the Illinois Basin or the huge opencast mines of the Powder River Basin. Numerous mines have already closed in the state with the loss of hundreds of jobs.

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