Groups Issue Revised Report on Coal's Costs
Charleston Gazette
15 November 2010
By Ken Ward Jr.
CHARLESTON, W.Va. -- West Virginia's coal industry costs the state
government's budget more than it pays, but not quite as much more as
estimated in a ground-breaking report issued in June.
The Morgantown consulting firm Downstream Strategies and the West
Virginia Center for Budget and Policy had put the coal industry's cost
to state government at $97.5 million more than it paid in taxes and
other revenues.
On Monday, the two organizations issued a revised report they wrote
based in part on criticism leveled by coal lobbyists and by industry
researchers at Marshall University.
The new report concluded the coal industry last year cost the state
budget $42 million more in tax breaks, damage to roads and other
impacts than industry pays in taxes and other revenues.
"We agreed with a number of their suggestions, however, several are
simply mistaken and fail to acknowledge many of the costs associated
with coal mining," said Ted Boettner, director of the center. "After
incorporating their suggestions that were valid, we found that the net
impact of the coal industry for the state budget in fiscal year 2009
remains negative, meaning that the industry imposed an overall cost on
the state and its taxpayers."
The original report, funded in part by environmental groups, found that
while coal mining provides West Virginia valuable jobs and tax
revenues, the industry actually cost the state government budget more
than it pays. Government pays huge sums each year for agencies that
regulate coal, tax breaks for mining operators, and coal truck damage
to state roads and bridges.
Among the biggest changes in the estimates was the addition of $31.5
million to the estimate of direct coal industry revenues to cover local
property taxes that provide additional state aid to schools through
county school boards.
The new report again emphasized concerns about what it estimated at $5
billion in "legacy costs" to fix damaged roads and clean up abandoned
coal mines covered by West Virginia's special reclamation program.
"The Legislature should consider enacting new policies that ensure that
the coal industry, rather than the state's taxpayers, pays for the
costs associated with coal-related activity," said Rory McIlmoil of
Downstream Strategies.
Boetter urged lawmakers to take up the suggestion of Delegate Nancy
Guthrie, D-Kanawha, to fund a more comprehensive study of coal's cost
and benefits.
"Understanding the true impact of the coal industry is vital when
making policy decisions pertaining to energy and economic development
that will impact our state for decades to come," Boettner said.
Reach Ken Ward Jr. at kw...@wvgazette.com or 304-348-1702.