The “good sense” to save a few cents
Dating to the 1800s, Pennsylvania has had its share of booms and busts, starting with oil and continuing through coal, steel and other types of manufacturing. Anyone who lived in the region in the late 1970s or early 1980s well remembers how painful it can be when the flush times come to a punishing halt.
Though natural gas has given our area and the state some stability in a turbulent national economic environment, it won’t last into perpetuity. Saving some of the revenue for leaner, less robust periods that are sure to come would be a demonstration of uncommon wisdom and foresight.
Our neighbors to the south have started to think in those terms. Jeff Kessler, the president of West Virginia’s Senate, is crafting a proposal that would set aside some of the money coming into the state’s treasury today from natural gas extraction into a trust fund that would help the state decades hence. The Associated Press reported over the weekend that Kessler’s proposed fund, modeled after similar reserves that have been established in the mineral-rich states of Alaska and North Dakota, could be ready for debate by the time the Mountain State’s legislature reconvenes in January, although it might end up being crafted as a constitutional amendment. Stitching it into the state’s constitution would protect it from lawmakers viewing it as a kitty that could be raided in emergencies and, let’s face it, situations that probably wouldn’t really qualify as emergencies.
Kessler told AP that, if the fund comes to fruition, it would be the product of hard lessons learned from the days when coal was the undisputed king. Even though coal was a money-spinner, little of it spun off into helping the state over the long haul, meaning its residents have been left to deal with intractable levels of poverty, ill health and poor educational outcomes.
“Had we had the good sense to put a few cents aside of every ton of coal ... that has come out of our ground, we’d probably be the richest state in the Union instead of in many respects the poorest,” Kessler explained. “When the (coal) seams got thinner and the jobs were done, there was just nothing to sustain their communities.”
Though there is barely a shortage of urgent projects or opportunities for which to spend Pennsylvania’s natural gas bounty, from crumbling roads and bridges to improving our own educational outlook, stashing some of it away for our children and grandchildren would be smart. Of course, Pennsylvania does not have a severance tax like West Virginia’s and other surrounding states, thanks to a misguided belief that the industry would decamp if they had to pay it. Many believe a severance tax could bring in twice as much as the impact fees drillers currently pay. If the day ever comes when a severance tax is approved, we should also stash some of the additional revenue for the rainy day we’ve always been warned about.