Members of each of the fire departments in Hazard and Perry County met with state legislators and members of the fiscal court last week to receive $10,000 in coal severance funds. The money has been an annual allocations from the fiscal court for the past few years.

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HAZARD – Every fire department in Perry County received a check on Friday for $10,000 in coal severance funds, though they were also reminded of the increasing likelihood that such future allocations may not be as readily available.

The fiscal court, while working with the district’s state legislators, has allocated these funds for local fire departments for the past few years. A continuing decline in coal production, however, may force officials to look elsewhere for money. Judge-Executive Denny Ray Noble said he thinks funds will be available next year, which would allow officials more time to work on alternative measures for the county’s departments if needed for the following year.

For volunteer departments, that will represent an important piece of their yearly budgets that go to maintaining equipment and paying monthly bills to keep their stations open.

“If you look at the volunteer departments, their budgets are not very much at all,” said Hazard Fire Chief Sam Stacy. “Mostly all they get is what coal severance funding they had, they get $8,250 from state aid, if they maintain all their training, and basically the only other income they’ve get is whatever they can raise during the year.”

Coal production in Eastern Kentucky dropped approximately 30 percent in the past year, and for most coal-producing counties in the region, that means a drop in the amount of funding coming back to local governments. In Perry County, according to an estimate from the Department for Local Government, the fiscal court could see a drop in funding of more than $900,000 in its LGEA fund.

These projected cuts are the direct result of a tougher federal stance on coal mining commonly referred to in Eastern Kentucky as the “war on coal,” said state Rep. Fitz Steele, who noted coal production in Kentucky as a whole is down more than 27 percent.

“There is going to be such a shortfall of coal severance that there’s going to be a scramble and a fight to keep single-county coal severance money, but where’s ready for that fight,” he said.

A bill Steele filed in the 2013 session of the General Assembly which would have brought 100 percent of the coal severance funds back to the coal-producing counties (about 50 percent currently goes into the state’s General Fund) will be filed again next year, Steele added, calling the legislation another “tool to fight with” to bring more severance funding back to the coal counties.

Last year’s drop in coal production resulted in a loss of $64 million, noted state Sen. Brandon Smith, and state officials are expecting a similar drop this year. That is money counties in the past have used to leverage federal matching dollars for projects like waterline and sewer extension. These losses likely will mean counties will begin to prioritize projects.

“There will be projects that we’ve had in the budget that will not get funded in a two-year period of time, simply because the money is gone,” Smith said.

And in a depressed economy, it will likely be harder for fire departments to depend on public fundraising, as there may not be as many people able to give.

Coal severance funding for the county’s fire departments annually has been a benefit not only to the departments, but also to local residents through lower home insurance rates, Smith added, and these are funds that he hopes will remain available.

“Fire department money is probably one of the best examples of how we can use coal severance money to affect everybody in their home through insurance rates,” he said.