Officials: decline in coal severance tax money could affect education

By: Paige Quiggins Email
By: Paige Quiggins Email

Officials said a decline in coal production affects eastern Kentucky in many ways.

Kentucky State Senator Robert Stivers, who testified at tonight's hearing, along with former governor and UPike President Paul Patton spoke with WYMT about what the continued decline in coal permits could mean for education in the region.

They said it is a matter of simple mathematics, less coal equals less coal severance tax money, which funds many things, including a new scholarship program announced last week.

Thousands traveled to the state capitol to let the EPA know what happens when permits get denied.

“The job losses that we have had here, what the coal severance money is going to mean to the counties, it is going to be really tough,” said Perry County Clerk Haven King.

King is also in charge of “Coal Mining Our Future” and said that many of the counties depend on revenue from coal severance tax.

Officials said they worry about revenue from the coal severance tax going down. The money is used to pay for a variety of things in 27 eastern Kentucky counties.

“Coal severance is a function of two variables, production of coal and the price that coal is sold for. if production drops, your severance tax has to drop,” said Sen. Robert Stivers (R) Manchester.

Last week, Gov. Steve Beshear announced some of that money would go towards scholarships in certain coal counties, but some said they wonder how long that can last.

“Long term sustainability of a scholarship program like that becomes very hard because if you are going to see a continued reduction in production of coal, you will have less and less revenues to operate on,” said Stivers.

UPike President Paul Patton said he is also worried about the effects beyond funds for higher education.

“I think the decline in coal production would affect the entire region in a multitude of ways, a loss of jobs being the most important,” said Patton.
“But of course it would affect the coal severance tax and monies available for this scholarship program as well as a lot of other infrastructure development that is still needed.”

Stivers and Patton said money has been set aside for at least the next two years for the scholarships, but beyond that, there' is no guarantee there will be enough to fund those things if coal production continues to decrease.

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