A new study however is showing no matter where you live in Kentucky and whether there is coal to mine there you are personally impacted. It appears the Coal Industry is costing the Commonwealth much more than it brings in:
MACED is a nonprofit organization focused on developing economic opportunity in Central Appalachia. It periodically issues policy studies, and with an affiliate, it makes several million dollars in small-business loans.
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.
Unknown to most taxpayers, MACED said, the state also gives the coal industry a variety of tax breaks, subsidizes the regulatory agencies that deal with its impact and even pays for pro-coal materials through a "coal education program" aimed at schoolchildren.
The severance taxes and mine permit fees the industry pays Frankfort to cover its costs have not increased in about 30 years. Of top coal-producing states, Kentucky gets the least from severance taxes - 2.9 percent of its tax income, compared with 7.1 percent for neighboring West Virginia.
http://www.kentucky.com/210/st...
These numbers came despite favoring the coal industry in several ways:
It did not account for costs related to air and water polluted by mining and coal-fired power plants, or workers sickened or crippled by coal jobs. It credited the industry for the full $224 million in coal severance taxes paid that year (after $18 million in special deductions), although half that money went to coal-producing counties and did not stay in the state's general fund.
Also, because MACED looked at 2006 data, it did not count the hundreds of millions of dollars in coal incentives approved during a special session of the legislature in 2007 at the request of Peabody Energy Corp. Like half of its fellow members in the Kentucky Coal Association, Peabody - which last year reported record cash flows - mines Kentucky coal but is headquartered in another state.
Industry lobbyists were quick to fire back:
Bill Caylor, who lobbies Frankfort for the Kentucky Coal Association, said he didn't know about the study and thus had no specific rebuttal, but he's sure it's inaccurate. The coal industry contributes plenty and is the largest private employer in some Eastern Kentucky counties, Caylor said.
"I've got a lot of choice words that I could offer on this, but it would sound pretty bad," Caylor said. "It's voodoo economics."
Maxson however, went into further detail about the negative effects of the industry:
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.
Kentucky must diversify its energy sources and economy so that the decline of Central Appalachian coal - in the face of more accessible Western U.S. coal and the arrival of federal carbon-emission controls - does not devastate the state, Maxson said.
Which drew an agreement from the industry, sort of...:
Caylor, of the Kentucky Coal Association, said he agreed with this in part. Kentucky coal is in trouble because Western coal can be cheaply retrieved, and impending environmental laws are likely to reduce the amount of coal that is burned, Caylor said.
But that's why this is the wrong time to raise taxes on the coal industry, he said. Coal companies can't send any more money to Frankfort, he said.
"They want to tax us into prosperity. I don't buy it," Caylor said. "Look, coal has produced billions of dollars for this state. We create a lot of high-paying jobs, jobs that pay $58,000 a year on average. Do they want us to close down and go away?"
Now, this is where I must interject. This is where Caylor totally lost me for the Coal lobby. First, if these companies are not paying enough taxes to recompensate the taxpayers for damage done their property then they SHOULD be paying more taxes period.
Secondly, I think it is childish and idiotic to threaten and hold jobs hostage. A Coal company should expect to pay taxes for the roads that are the lifeblood of their business without shutting down. I would like to remind him too that those jobs pay so much not from the genorosity of King Coal, but because of the brave men and women who fought and in some cases died for unions to negotiate wages and benefits. Just watch the movie "Harlan County War".
This study I believe raises some serious questions. While I would not want to cost anyone their job, I think that the Coal Companies in many cases are getting away with far too much. Maybe it is time we re-examine our policies toward these companies and make sure they are paying at least for what they destroy.
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