"Chief among the factors that disadvantage West Virginia's wood industry compared to other states is the timber severance tax. Because timber is not a static resource, the notion of severance vis-a-vis minerals is inappropriately applied to timber crops. Each time a crop is harvested from a forest the gross yield is subjected to tax. This yield tax is unique to WV, and because it is imposed in addition to all other business taxes it leaves our forest industry distinctly uncompetitive.

"State tax policy coupled with structural changes that are and have been occurring in world markets for wood products have left West Virginia's forest industry in a fragile condition today. Demand for WV hardwood by domestic furniture producers has dropped dramatically, affecting both prices and volume for wood previously delivered to other states. Our rural populations are in decline and consequently so are local markets for value added wood products. That downward spiral seems to presage economic disaster for much of our state. For the sake of the state's economic health, policymaker need to be cognizant of the potential for seemingly small additional burdens placed on this industry segment to have disproportionately negative impacts.

"There are important opportunities for public policy actions that would strengthen West Virginia's forestry and wood products business environment. The report concludes with a menu of items which state policymakers may wish to consider."