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Coal Counties Want More Severance Tax Money

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Leaders from the state’s coal-producing regions want counties to receive a greater share of coal severance tax revenue. Revenue from the severance tax is split evenly between the state and counties and has declined as a result of Kentucky’s flagging coal industry.

Webster County Judge/Executive Jim Townsend says his county’s severance tax revenue has declined from $6 million per year in 2011 to $300,000 last year. “If something isn’t done, our county’s going to go out of business, it’s just that simple,” Townsend says.

Counties use their share of the funds for local projects like parks, senior centers, rescue squads or industrial parks. Miners are extracting less coal from the mountains of Kentucky and selling it at a lower price, leading to massive declines in severance tax revenue going to county coffers.

Statewide, coal severance revenue dropped from $20.5 million per month in January 2011 to $8.9 million in January 2016.

Several bills have been proposed that would increase the percentage of severance revenue going to counties, including one that would send 70% of revenue to counties. The proposals will be considered in budget negotiations, which have to be settled by the time the legislature ends on April 13th.

Ryland Barton is the Managing Editor for Collaboratives for Kentucky Public Radio, a group of public radio stations including WKMS, WFPL in Louisville, WEKU in Richmond and WKYU in Bowling Green. A native of Lexington, Ryland most recently served as the Capitol Reporter for Kentucky Public Radio. He has covered politics and state government for NPR member stations KWBU in Waco and KUT in Austin.
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