The Kentucky General Assembly came to a close last week, and its accomplishments (or lack thereof) leave much to be desired for eastern Kentucky. A bill to make permanent scholarships for coal county students attending coalfield schools passed, but beyond that, little was done to support eastern Kentucky’s struggling miners, communities and economy. Proposed bills to give unemployed miners preference in hiring, to promote renewable energy and to protect Appalachia’s waterways went nowhere. Neither did the attempt to return all coal severance revenues back to coal-producing counties.
It was, however, a budget year and as such more attention was given to how we spend our coal severance revenues. This two-year budget takes only small steps to ensure more strategic use of severance funds for the long-term development of eastern Kentucky’s economy.
An editorial from the Lexington Herald Leader on Friday sheds light on this problem:
Preparing for coal’s decline as a source of jobs and revenue was the idea in the 1990s when the legislature designated half of the coal severance tax for coal-producing counties. Eastern Kentucky failed to diversify its economy, nonetheless.
Too much of the tax revenue that was supposed to create a post-coal economy still subsidizes the coal industry through everything from coal-haul road repair to training mining engineers.
And then there are the goodies handed out by lawmakers, popular amenities that do nothing to create jobs. In the just ended session, the House earmarked severance revenue for an American Legion Post, a chess team, volunteer fire departments, senior citizens centers, on and on for pages.
But, at the Senate’s insistence, the budget was largely stripped of such earmarks. That means that $15 million in coal severance money is available to local governments.
By law that money is reserved for industrial development, but, as usual, lawmakers stipulated that it can be used for just about any non-recurring expense as long as the Department for Local Government or the Kentucky Infrastructure Authority concur.
We don’t argue with bringing water lines and sewage treatment to Eastern Kentucky, but the Department for Local Government should closely vet other proposals to be sure they have the potential to create employment.
Severance tax monies routinely fund emergency services, debt service, one-time projects, and an array of programs (scholarships, fighting drug abuse, reading programs, etc.). While many of these items could be defended on their own, they fail to add up to an overall strategy to diversify the region’s economy.
Funds allocated for the SOAR is a positive step, as is a proposal to put $2 million a year into a “regional strategic development fund” (though the money for these investments should not have come at the expense of mine safety funding). But we still lack the long-term view that is necessary to nurse our region back to economic health. SOAR’s working groups are meeting for the first time later this week. We can only hope that they are filled with enough diverse voices and new ideas that will build a smart, inclusive plan for eastern Kentucky’s future.
