Oil, natural gas severance tax revenue up in West Virginia

Counties to receive more than $15M

CHARLESTON — Natural gas is having an impact on the state budget and in local economies throughout West Virginia, a trade association said.

The oil and natural gas industry paid more than $138 million in severance taxes in fiscal year 2018, an increase of 4.3 percent or more than $5 million over 2017 receipts, according to a review of the information provided by the state Department of Tax and Revenue and the state treasurer.

“The increase in severance tax receipts has contributed greatly to the state’s current budget surplus while providing needed revenue to county and city governments,” said Anne Blankenship, executive director of the West Virginia Oil and Natural Gas Association. “The local funds are used to support vital public services – everything from local emergency responders, community projects and social programs”.

Of the $138 million, more than $15 million in severance tax payments will be made to counties and cities, according to the treasurer’s office. The payments are a 61 percent increase year-over-year and all counties will receive increased disbursements.

Six counties received more than $1 million in payments from the fund, Blankenship said. They were: Doddridge County $2,834,771; Wetzel County, $1,456,511; Ritchie County, $1,382,162; Tyler County, $1,345,274; Marshall County, $1,336,783; and Harrison County, $1,064,866.

In terms of percentage increase, Tyler and Ritchie saw gains of 103 percent and 80 percent, respectively. Monongalia County, which will receive $551,832, experienced an increase of 217 percent, the largest gain of any county in the state. Other counties receiving significant severance distributions include Ohio with $644,109, Kanawha with $503,976.94, Marion with $358,274.67, Brooke with $309,042 and Taylor with $260,134.

Severance to cities is based on population. Charleston received $107,965, Huntington received $94,972, Parkersburg received $66,149, Morgantown received $62,300 and Wheeling received $59,255, the largest portion of those revenues to municipalities.

The allocation to the city of Parkersburg goes into the general fund for overall government operations, municipal Finance Director Eric Jiles said.

Ninety percent of the natural gas severance taxes collected are allocated to the state. The remaining 10 percent is distributed two ways: 75 percent to gas-producing counties and 25 percent to all counties and municipalities.

“When you consider that property tax revenues on natural gas operations generated more than $88 million in 2018 for gas producing counties, you can see the tremendous impact the industry is having on all state and local budgets,” Blankenship said.