CHARLESTON, W.Va. (WVDN) – State Treasurer Larry Pack released a new report examining the impact of severance taxes on West Virginia’s economy and state budget. According to the report, total General Revenue Fund severance tax collections rose from $163.2 million in Fiscal Year 2001 to more than $534.9 million in Fiscal Year 2026, an increase of nearly $372 million. Severance taxes have been the state’s third-largest source of general revenue over the past 25 years, accounting for an average of 9% of total collections and growing at an average annual rate of 4.9% compared with 3% for overall General Revenue Fund collections.
“This report underscores two important realities: West Virginia’s energy industries remain a driving force behind our economy, and our state budget depends heavily on the revenue they generate,” Treasurer Pack said. “It is important that the public and policymakers understand that we must support our energy sectors while also looking to diversify our economy. Having these numbers paints a clearer picture.”
The report highlights findings from a 2026 study published by West Virginia University’s Bureau of Business and Economic Research examining the impact of the state’s coal mining and coal-fired power generation industries. According to the study, coal mining supported $16.4 billion in economic activity, while coal-fired power generation contributed an additional $4.6 billion.
Additionally, the Gas and Oil Association of West Virginia recently reported that the state’s natural gas and oil industry supported $14.7 billion in economic activity. Combined, these industries account for more than $35.7 billion in economic activity across West Virginia.
“Policymakers have benefited greatly from the growth in severance tax to pursue other tax cuts. This includes the phase-out of the food tax and the largest personal income tax cut, which was done under Governor Jim Justice,” Treasurer Pack said. “This, in turn, has created a heavier reliance within our budget on severance tax, making it the third-largest contributor to revenue.”
The top three natural gas-producing counties are Tyler, Wetzel and Doddridge. The top coal-producing county in the state is Marshall County. In Fiscal Year 2026, local county and municipal governments received nearly $51.5 million in various severance tax distributions.
The report findings can be attributed to Mark Muchow, West Virginia Treasury Strategic Analyst and former state Deputy Revenue Secretary.
The full Severance Tax Impact Report is available at https://wvtreasury.gov/Portals/wvtreasury/Content/Research/WVSTOSeveranceTaxAnalysis.pdf?ver=jLxVdlBBwlzJcVpb3wtaXQ%3d%3d.
