Report: Coal industry costs state government

Here are excerpts from a recent Lexington Herald-Leader article about MACED’s recent study:

FRANKFORT — The coal industry takes $115 million more from Kentucky’s state government annually in services and programs than it contributes in taxes, according to a study to be released Thursday.

The Berea-based Mountain Association for Community Economic Development, or MACED, spent a year examining the coal industry’s impact on the state’s general fund and road fund.

“The coal industry is pretty free about discussing the positive impact of coal on the state. But there’s almost no public discussion about the cost,” said MACED President Justin Maxson.

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In its latest study, MACED determined that coal delivered $527 million to the state in 2006, mostly through coal severance, corporate income, sales and vehicle taxes, plus taxes on 17,903 people employed in mining and 52,429 people in jobs that depend on mining.

The same year, MACED said, the coal industry cost the state $642 million.

This includes $239 million for frequent repairs to about 3,800 miles in the coal-haul road system, where trucks weighing up to 120,000 pounds crush the pavement as they carry coal from mines to tipples, trains, barges and power plants. Companies purchase state decals for the right to run coal trucks overweight, but that revenue offsets very little of the cost of road repairs.

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“Our purpose here isn’t to beat up on coal,” Maxson said. “It’s education. We want to lay out a complete picture so our elected leaders can make informed decisions about how we proceed with our energy policy, our economic development policy and our fiscal policy.”

For all the wealth that coal produced over the last century, Eastern Kentucky’s coal counties remain among the nation’s poorest, Maxson said. Destructive mining practices, such as mountaintop removal, sacrifice the region’s natural beauty, and with it other possible employers, such as tourism, he said.

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Today, less than 1 percent of all employed Kentuckians work in coal mining, MACED reported.

Visit the Lexington Herald-Leader’s website to read the entire article.

About Jeff Deal

A lover of Appalachia, renewable energy, local green sustainable economies, and energy efficiency, Jeff is the information technology consultant for Appalachian Voices and also the Senior Project Manager for the Appalachian Institute for Renewable Energy.