Presentation on theme: "T HE F UTURE F UND A brighter future for West Virginia A Brighter Economic Future For the Mountain State September 3-4 – Clay Center for the Arts & Sciences."— Presentation transcript:
T HE F UTURE F UND A brighter future for West Virginia A Brighter Economic Future For the Mountain State September 3-4 – Clay Center for the Arts & Sciences TED BOETTNER Executive Director
O VERVIEW What is a permanent mineral trust fund? Which states have permanent mineral trust funds? What is the WV Future Fund? How could we strengthen the WV Future Fund? Why should West Virginia create a Future Fund?
W HAT IS A PERMANENT MINERAL TRUST FUND ? Permanent mineral trust funds are attempts by governments to convert non-renewable natural resource (oil, natural gas, coal, and other minerals) wealth into a renewable source of wealth for future generations. Permanent mineral trust funds are invested similar to pension funds and a portion of the fund is used each year to financially bolster the state’s economy through strategic investments (e.g. education, infrastructure, and tax relief). These funds are “permanent” because the principal of the fund is usually constitutionally protected.
S TATES WITH P ERMANENT M INERAL T RUST FUNDS
A C LOSER L OOK : T HE P ERMANENT W YOMING M INERAL T RUST F UND Source : Wyoming State Treasurer's Office
T HE W EST V IRGINIA F UTURE F UND (S.B. 167) Principal and interest would not by used for 20 years. Fund can be used for diversification of the state’s economy, tax relief, education and workforce development and for purposes which other funding sources are not available. Funding of West Virginia Future Fund would be 25 percent of excess proceeds from oil and natural gas severance taxes beyond a designated benchmark (e.g. $64.8 million).
T HE W EST V IRGINIA F UTURE F UND
P ROJECTED B ALANCE OF W EST V IRGINIA F UTURE F UND
S TRENGTHENING THE W EST V IRGINIA F UTURE F UND : L ESSONS FROM OTHER STATES Include a safeguard against raiding the corpus of the fund by passing a constitutional amendment. Dedicate a portion of coal severance tax revenue to the fund. Begin using earnings from the fund within 5 years to gain support. Deposit Rainy Day Fund B (Tobacco Settlement $$) into the WV Future Fund.
W HAT IF A W EST V IRGINIA P ERMANENT M INERAL T RUST F UND HAD BEEN C REATED IN 1970?