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Seeking Smart Strategies for Spending Coal Tax Dollars

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Thursday, October 17, 2013   

BEREA, Ky. – A nonprofit organization that promotes sustainable development in eastern Kentucky is calling for community participation, accountability and transparency in how money generated by the coal severance tax is spent.

The tax is the largest pool of public dollars for economic development in the coalfields – $298 million last fiscal year alone.

The Mountain Association for Community Economic Development (MACED) in new report calls for a more coordinated strategy for spending that money.

"A lot of good people have spent a lot of time and a lot of money trying to do economic development in Appalachia Kentucky,” says Justin Maxson, MACED's president. “We just haven't had the results that we want. Part of the problem, in my mind, is we spent to much time investing in projects instead of in a system."

MACED proposes that 25 percent of the coal tax dollars be allocated to a diversification fund – overseen by a transparent, independent board that would lean on public input.

The MACED report notes that thousands of coal jobs have been lost recently, signaling a likely permanent decline of the region's primary industry.

Maxson says that makes well-planned economic diversification even more critical.

"Given that we've been in the midst of an economic catastrophe, as we've lost probably more than 6,000 coal jobs over the last 18 months, we really have to be more strategic about spending that money," he says.

Maxson adds some of the coal severance tax money has been spent on worthwhile projects that he says have made a difference.

But, the MACED report also notes that coal tax dollars have been used for legislative earmarks to shore up county budgets and to build industrial parks, many of which have sat empty.



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