Kentucky Coal Counties Take Issue with Severance Tax Distribution

Oct 28, 2013


Coal counties receive a portion of coal severance revenue but several county officials say they aren’t getting enough. Webster County Judge Executive Jim Townsend says the state takes too much of the severance money to fund projects that are not in western or eastern Kentucky.

“I understand you’ve got to make your books balance and that but it doesn’t need to be taken away from the counties that are producing the coal,” he says.

Coal severance money has funded renovations to Lexington’s Rupp Arena, Madisonville’s Trover Clinic and programs at the universities of Louisville and Pikeville.

Townsend says initially half of the severance tax went back to the counties. Now coal counties get 15 percent in assistance money.

“The legislature has changed it many, many times, and has taken monies off the top that should be coming to the counties and done state-wide projects with it,” he says. “Granted, I feel those projects are all well deserved. But the majority of those projects are not here in western Kentucky or eastern Kentucky where coal is being mined. They’re going somewhere else.”

Muhlenberg County Judge Executive Rick Newman joins Townsend and other coal county officials in calling lawmakers to change the amount they get from the coal severance tax.

There is too much coal severance revenue that’s being taken directly of the top, in the middle and off the bottom by the state to fill some of their budgetary obligations to certain projects,” Newman says. “We’ve gotten get something changed because the size of that pot is getting smaller and smaller. But they’re still taking the same percentages.”

Townsend says coal county officials across the state are meeting with legislators to change the coal severance allotment.