Whose Coal Severance is it Anyway?

There has been a fair bit of talk lately about coal severance tax — the fee charged for mining coal, intended to ensure funds are available to coal producing areas after the coal is gone.  This past legislative session in Kentucky, some representatives wanted to use severance tax money to pay for efficiency improvements to homes in Eastern Kentucky bearing the high electricity costs of a particularly cold winter.  Severance tax funds are often offered up as a budget solution for holes in the larger state budget, rather than explicitly being directed for use in the coal producing counties.

The Herald-Leader has a piece in today's paper about the on-going story of the City of Lynch's firehouse restoration project. 

The Harlan Daily Enterprise reports that Lynch Mayor Taylor Hall says he was recently told by Harlan County Judge-Executive Joe Grieshop "that if we didn't give in, then he would make sure that we would never get a penny of money."

Lynch has been seeking funds from Harlan County's share of severance tax proceeds to match a grant for restoration of an old firehouse. The county judge-executive and fiscal court control the local portion of the severance tax.

According to the Harlan paper, as quoted in the Herald-Leader article, the County Judge-Executive replied:

"I just told them that the coal companies are where the money comes from. If you're not willing to work with them and you're anti-coal, then the fiscal court members are not going to support you. They have already stated that. They don't feel comfortable helping out cities with coal monies, when the city is not trying to work with the coal company."

Considering the legacy of mining in Lynch, a company town named for the then-head of US Coal and Coke Company Thomas Lynch when it was plotted in 1917, it seems both unfair and not right to call the town – still home to many mining families – ‘anti-coal.’ 

Lynch, along with the neighboring towns of Benham and Cumberland, has taken a proactive look at its community assets and begun community-wide dialogue about how best to use them.  The Herald-Leader has covered pieces of this conversation, weighing in on the lands unsuitable for mining petition currently supported by some residents of Lynch and Benham to keep the ridges and streams surrounding the towns from being strip-mined.  The Herald-Leader editorial, written in support of the petition, argued that it isn’t ‘frivolous’ to protect communities like these company towns.

A former coal executive replied in this piece, saying essentially that history is relative and suggesting that many of the supporters for the lands unsuitable effort are not residents of the affected areas and therefore should not be taken seriously.  A former miner, MSHA inspector and current resident Stanley Sturgill countered in a reply, also published in the Lexington paper, indicating his personal support for the legal effort and discounting the executive's (a Virginia resident) argument on the executive's own 'outsider' grounds.

The comments in each of these pieces are interesting, and show how intensely emotional much of this conversation has become.  At its core, there is the question of ‘say’—who gets to say what happens where.  Do you have to be an active miner to have a say in mining?  How close do you have to live to a proposed mine to have a stake in addressing the potential impacts?

It isn’t surprising that emotions run high around the use of severance tax – and who decides where it is spent.  It is an issue we’re going to be taking a closer look at in the coming months through ATI, and we’re interested in your thoughts and input.

This conversation is hard, and it gets even harder when tensions are running high.  Our hope is that ATI provides some space, and soon information resources, for dialogue to take place around questions of who decides, and how are shared resources allocated.  Stay tuned for more on this tough topic.

**KFTC has a resource on the history of the severance tax in Kentucky, and a breakdown on how much of it (very little) is returned to coal-producing counties versus filling holes (most of it) in the state's General Fund.

Kristin Tracz

About Kristin Tracz

Kristin Tracz served MACED’s Research and Policy team from 2009-2012 working on clean energy policy, energy efficiency programs and the Appalachian Transition Initiative. She joined MACED after finishing her Master of Environmental Management degree at the Yale School of Forestry & Environmental Studies. She now lives and works in Washington, DC.