The true cost of coal: Counties miss out on coal severance dollars after coal mines pull out

KENTUCKY (WFIE) - As some coal mines have pulled out of local western Kentucky counties in the last few years, some local counties are starting to see holes in their budget where coal severance funds used to be.

Webster County is one of those communities. In the last several years, the county lost their mine in Sebree. Then, In 2019, they lost their Dotiki Mine.

“The shutting down of coal mines have been tough on Webster County...” said County Judge-Executive Steve Henry.

“We’ve lost about a million dollars since 2017. 2018, it continued to drop, in 2019 it continued to drop to about half that. Then we ended up not having any...”

The Judge-Executive said those coal severance dollars accounted for about a tenth of their overall budget.

Counties that produce coal get a portion of the tax revenue back through the local county government assistance fund. County officials told us they can use that money to fund different services like senior centers and sheriff offices.

We were able to find state records that show funding to the county slowed.

In 2016 state records show the county received around $1.1 million.

After the Sebree mines left, state records show the county lost hundreds of thousands of dollars of that money in coal severance funding

Those funds dug deeper into the budget after the fall of the Dotiki Mine in 2019, state records show.

After a rocky road, Judge Henry says the budget is now stable.

This is an issue not just impacting Webster County. McLean County was hit, too.

“We did see a roughly $300,000 dollar decline in coal severance funds which is sad because that was the most we had ever had,” said Judge-Executive Curtis Dame. “It was really ramping up.”

In the last three years, two mines closed in McLean County

In 2019, we reported the Rhino mine in Beech Grove was bought out, but closed it’s doors.

The next year, in 2020, we reported the Poplar Grove Mine closed it’s gates, too.

The McLean County Judge said the occupational tax is where the county also took a big hit.

Judge Dame said the loss of these two mines didn’t break the bank for McLean County. Losing mines is something Dame said the county is used to.

“You can halfway go back and look and see those ebbs and flows with those LGA funds,” Judge-Dame said. “The key thing was our county was not totally dependent on those funds.”

Both counties still receive some coal severance funds in the form of economic development funds. But, they’re more restrictive and the counties have to apply for them to use it.

Both leaders said they’re working on economic development projects as they look toward the future.

Even though coal has left Webster County for now, Judge Henry said they’re ready to welcome back coal whenever it comes back.

He says coal is still successful in the commonwealth.

<SOT - Henry> - “We’ve actually seen receipts up with coal last year and this year and projected again for next year, a significant increase that we see that coal is still alive....”

Copyright 2022 WFIE. All rights reserved.