New Report: Kentucky Government Loses Money on Coal

At a time when Kentucky must have a special Legislative session to address a $996 million budget shortfall,  the Mountain Association for Community Economic Development (MACED) today released a report, The Impact of Coal on the Kentucky State Budget, showing that in 2006 the state budget had a net impact loss of  $115 million from the coal industry operating in Kentucky. 

Coal hasn’t been paying their fair share, so who’s picking up the tab? It’s us, the taxpayers. It’s costing us more than just what we pay out in electric bills.

Suzanne Tallichet, KFTC member from Rowan County

From the report:

For Rully Urias and his Pike County family, "It’s a big slap in the face, what the coal industry does to the taxpayer.â€  Like too many other KFTC members the Urias family lives in the shadow of the other cost of coal.

Coal is responsible for an estimated $528 million in state revenues and $643 million in state expenditures. The $528 million in revenues includes $224 million from the coal severance tax and revenues from the corporate income, individual income, sales, property (including unmined minerals) and transportation taxes as well as permit fees.

The $643 million in estimated expenditures includes $239 million to address the industry’s impacts on the coal haul road system as well as expenditures to regulate the environmental and health and safety impacts of coal, support coal worker training, conduct research and development for the coal industry, promote education about coal in the public schools and support the residents directly and indirectly employed by coal. Total costs also include $85 million in tax expenditures designed to subsidize the mining and burning of coal.

The Report also clearly points out what is not included in these figures:

These figures cover only a portion of the full costs of the coal industry to the state. We do not include the many externalized costs imposed by coal including healthcare, lost productivity resulting from injury and health impacts, water treatment from siltation caused by surface mining, water infrastructure to replace damaged wells, limited development potential due to poor air quality, and social spending associated with declines in coal employment and related economic hardships of coalfield communities.

The residents of Lynch in Harlan County recently learned about another unaccounted cost. At the permit hearing on June 18, Jennifer Thompson of the Department of Natural Resources stated, "The [SMCRA] regulations do not consider future economic considerations." - meaning that the lost of economic development potential of tourism, wind power of even a springwater bottling facility in the Tri-Cities are irrelevant to those considering whether to permit mining or not.

The MACED report is featured in today's Herald Leader: Report: Coal industry costs state government