coal severance tax dollars

Wikimedia Commons/Author: PixOnTrax

Hopkins County is facing a nearly five percent budget cut thanks in large part to a reduction in coal severance tax revenue. The county is home to multiple underground mining operations. The severance tax revenue goes to counties based on a formula that includes the tonnage of coal extracted and its price. The $1.34m reduction won’t prompt any layoffs, according to Judge Executive Donnie Carroll.

City of Madisonville

The City of Madisonville and First United Bank are taking the former municipal building on East Center Street and turning it into a plaza with greenspace, a stage and public art display.

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.

A $700,000 shortfall in projected coal severance tax revenues is prompting the Hopkins County Fiscal Court to modify its plans to fund certain county construction projects. 

Kentucky collects a severance tax on coal as it's removed from the ground and sends some of it to coal producing counties. 

The state's top budget official is reporting an 8.3 percent increase in General Fund revenue in May, largely thanks to improved collections from the sales tax, individual income taxes and property taxes.

Budget Director Jane Driskell released a monthly revenue report on Monday. The report showed property tax collections increased by 75.2 percent in May. Individual income tax receipts rose by 8.3 percent. And sales tax receipts were up 5.2 percent.

A drop in coal severance tax revenues has several Kentucky leaders worried. Money from the tax on mined coal is used largely for state, county and city infrastructure projects, specifically in coal mining areas like Eastern Kentucky. House Speaker Greg Stumbo and Governor Steve Beshear say the significant drop in the tax revenue has caught their attention. Beshear says the decline is due to the tough domestic market for Kentucky coal. But he believes exports could cause a rebound. He points out that Kentucky interests recently struck a deal to send coal to India.

Hopkins Co. Coal Severance Going Down

Dec 24, 2012

Hopkins County officials are bracing for a drop in coal severance tax funds following a slowdown in coal production over the next 18 months.

State officials are reporting a 26 percent drop in coal severance for the 2012-13 fiscal year, which began July 1. That could leave Hopkins County with $1 million less than the $4.05 million officials projected from 2012-2014.

Earlington Lays Off Three City Workers

Dec 14, 2012

The City of Earlington is temporarily laying off three of its Street Department workers effective Dec. 21 with another three possible in the coming weeks.  The Madisonville Messenger reports the causes are a projected decrease in tax revenue and a delay in receiving coal severance funds. Earlington Mayor Mike Seiber says he made the decision to save the city $30,000 in order to offset the $40,000 decrease in projected property tax income. The city anticipates calling all of the laid-off workers back in six to eight weeks.

Coal Revenues Look Bleak

Jul 30, 2012

One of Governor Beshear’s top economic advisors said Kentucky’s coal industry should probably brace itself for a bad year. He said the outlook for this year leaves a lot to be desired.

"We sort of got used to an upward trend in the last decade, but the foreseeable future for coal and the next three quarters, I'm afraid are going to be decidingly negative," said Deputy Director Greg Harkenrider.

Afternoon Round-Up 5/31/12

May 31, 2012

Today on NPR: While "Five Wives Vodka" is made and sold in Utah, officials in Idaho have decided its name and label might offend both Mormons and women.

Four Rivers Region:

Construction begins next summer on a massive marina and riverfront project in downtown Paducah.