WKYT Investigates | New problems for counties already hit hard by closed coal mines

Published: Feb. 23, 2017 at 2:35 PM EST
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Kentucky counties hit hard by coal mines closing up shop are getting hit again as the state slashes the money the counties expected from tax assessments on unmined coal.

"We were not expecting anything like this," Knott County Superintendent Kim King said about the $1 million in cuts her district faces. "If we are losing money like this, we can't meet the goals and needs of our kids."

Knott County was hardest hit when the Department of Revenue recalculated the value of Kentucky’s unmined coal half way through the 2016-17 fiscal year. In the summer, the state calculated the value of the unmined coal at one price but then revised it six months later.

“This year, though, we got another letter from the Department of Revenue in December and for the county it was going to be $1.5 million less than what the certified assessment was," Knott County Judge Executive Zach Weinberg told WKYT’s Miranda Combs.

The expected revenue from the unmined coal was then factored into Knott County’s budget. Of the $1.5 million now being shaved off Knott County’s budget, two-thirds of that would have gone to education.

The Department of Revenue made the original estimates for how much to tax owners of land with unmined coal in June, but the agency re-evaluated them in December.

While the department declined to make someone available to talk on camera with WKYT, a spokesperson said there is “no single factor leading to the unfortunate situation that coal counties are facing.”

Knott County saw its number of active mines drop from 15 in 2014 to nine in 2015. The drop translated into a 68 percent decrease in coal production in Knott County in 2016.

While Knott County was hardest hit, it’s not alone. Nearly half of the mines in eastern Kentucky have closed since 2014 when there were 347. By the end of 2016, the number was 184.

The Department of Revenue says closed mines along with job losses, population decreases, declining property tax revenue and the cost of regulatory compliance are what leading to budget challenges for counties.

"We've done well with what we've had, but we're very scared about losing this money and what it will do to us in the future," said King about the problems facing Knott County schools.

A quick fix won’t come from the coffers of the state’s education department.

"This was out of everybody's control," said Education Commissioner Stephen Pruitt. "The best we can do is offer our support and our advice. But there's really no discretion I have to grant more funds or whatever.”

The Kentucky Coal Association says it believes the lost revenues are the result of federal regulatory policies under former President Barack Obama which it says “attacked the coal industry at every turn.”

The association says unless those policies change making coal production more competitive coal tax revenue that counties like Knott County rely on would continue to decline.

"We just continuously cut until we're just basically going to shut down," worried Weinberg.