Dwindling local revenues, static state funds and reduced federal funding have for the past few years led to our local school systems taking mid-year funding cuts, our workers doing more with less and renowned economists predicting a perfect storm of financial meltdown by 2013.
Here in our little neck of the woods in Perry County, though our county has remained on sound financial footing, disaster always hides just around the corner. So when another group released another report urging the formation of a trust fund using coal severance tax dollars, well, let’s just say that piqued our interest.
It was last year when the Mountain Association for Economic Development reached their own conclusion as to the necessity of such a trust fund, and just this month the Central Appalachia Regional Network did the same.
In short, they contend, Kentucky should be putting some of our coal severance dollars into a trust fund as an investment, a rainy day fund of sorts. Considering the state’s and the nation’s economic fitness, we think this would be a good use of money, rather than an approach of get it and spend it right away.
Here in Perry County, of course, we certainly have urgent need for the millions in coal severance that we do receive. We still need to continue waterline extension to a few pockets of unserved areas. We also need to extend sewer lines to help rid the county of polluting and illegal straight pipes.
But what we need most of all is a future.
With the sad decline of the Appalachian coal industry due to a lingering lack of demand and burdensome federal policy on new power plants and ongoing mining operations, we’re currently unsure from where the future demand for our coal will come. According to the Rural Blog, more coal than ever is being shipped to foreign countries, but is that something we can continue to count on?
At present, there is simply too much uncertainty in Eastern Kentucky to say anything for sure, which makes it even more sensible to tuck some of the severance money we glean from the coal industry into a trust and let it grow, and later dip into it to help develop our infrastructure.
We can not agree with other points of the report, such as higher tax rates for coal severance, because while this would certainly fill the state’s coffers some more in the short term, at this point higher taxes make little sense in an industry already facing challenges of higher costs.
But we can certainly agree that we should be taking some of these funds and putting them back for future use. We would prefer state legislation that would allow each of the counties to set up their own trusts, perhaps with the help of a community foundation, so that each county would have its own fund to dip into once coal production decreases even further. We would also prefer any money used for this trust not to come out of the money counties receive each year, but from the millions the state takes off the top before allocating funds to the coal counties.
Either way, though, this is an issue our legislators should not only be looking into, but they should be drafting a bill.
— The Hazard Herald