Falling WV Severance Tax Revenue a Problem for Gov. Justice

We have, for years, brought you arguments about the superiority of an impact fee over a severance tax (see Allegheny Institute: PA Impact Fee is Better than a Severance Tax and Showdown: Comparing PA Impact Fee to WV Severance Tax). One of the problems with a severance tax is that when the price of gas is high, the tax revenues flow, but when the price of gas goes low, severance taxes on that gas dry up. That’s what’s happening in West Virginia right now–where they have a 5% severance tax on natural gas production.

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