Tuesday, June 18, 2013

It's My Money and I Need It Now!

Coal Severance Tax Funds Used for Rupp Arena Renovations

$2.5 million of coal severance tax money has been taken out of the state-approved budget for renovations to Lexington's Rupp Arena.  The problem with that is that coal severance tax money is supposed to go back into the counties in the state that produce coal.  A huge chunk of that money has been set aside to fund Rupp's makeover.  

This decision is not sitting well with coal producing counties.  The coal severance tax is a levy the state collects on the coal as it's mined.  Much of that money is already kept by the state, and the rest is supposed to be divided up proportionally amongst counties that produce coal.  These funds are then used to assist local government, boost tourism, and help diversify local economies beyond mining.  

Rupp Arena's $2.5 million renovations are among 30 other projects dipping into the severance tax money.  The amount that remained was then split among coal producing counties.  During the past 11 months the state of Kentucky has collected $213 million in coal severance taxes.  This number is a 23% drop from last year.  This, combined with rising unemployment rates are sending a 1-2 punch throughout Eastern Kentucky.  Budgets are being drastically slashed, and as a result vital programs such as those benefiting senior citizens, are in danger of being cut out all together.  

What Rupp will look like after renovations...because there are so many horses just running wild in downtown Lexington

Letcher County Judge Executive Jim Ward, also chairman of the Kentucky Coal County Coalition, said our county's budget was cut by $1.3 million as a result.  Last year Letcher County received around $1.3 million in coal severance tax funds. That's roughly half of the amount being used in Lexington, where no coal is mined.

The Kentucky Department for Local Government oversees coal severance tax spending and said it was left with no choice but to take the $2.5 million, as well as funding for the other 30 projects, from the coal money.  When he originally proposed the budget last year, Governor Steve Beshear allotted $3.5 million from state bonds to fund the Rupp project.  We dug deep, and the only explanation we could come up with for the switch was that "Leading lawmakers met behind closed doors, dropped the amount to $2.5 million, and switched the bonds out for coal severance tax money."

House Speaker Greg Stumbo, D-Prestonsburg, backed the funding in a statement a prepared statement.  He said the money had to come from the coal severance tax, because there was no where else to get it from....how about just not taking it?  He went on to make even less sense, stating that "Though Rupp is not in the coalfields, it plays an important role in the state because of the tradition of UK basketball."

The mountains that produce coal

Ward said the lack of funding is hampering local governments ability to better the lives of it's citizens.  Papers had been filed for work on water and sewer projects using multi-county coal severance money, and now there won't be enough money for that.  So what Greg Stumbo and Fayette County politicians are saying is that it's more important for renovations to be done to an already nationally known arena than it is for it's basketball fans to have properly filtered water and sewage systems.  Makes a lot of sense, huh?  

Friday Stumbo, feeling the heat, announced plans to see that the $2.5 million is replaced.  In the next few weeks they hope to raise enough money in bonds to fund the renovations....sounds like a good plan.  Stumbo said House Democrats wanted to use bonds for the renovation funding originally, but Republicans refused to allow additional debt in the budget. State Representatives Leslie Combs and Fitz Steele introduced a bill during last winter's legislation that would have returned All the severance tax money to coal producing counties.  It died on the floor. 

Generations ago, mining companies from the north came down to the mountains and bought up all the mineral rights they could obtain, in as shady a manner as needed.  The same thing is still happening, but on a more local level.  Taking vital funding away in this manner is why these mountains remain at least 10 years behind the rest of the world.  While Lexington and urban areas hours away are getting fat, some of our miner's are wishing they had access to clean running water.  Who cares if they wash the coal dust off, as long as they show up to work.  Maybe we should all load up on tour buses and organize a sit-in at Rupp, to use their restroom facilities....they should be really nice!

1 comment:

  1. I done a paper over this in college. It is amazing to see how many millions (yes millions) of dollars in coal severance was taken from Letcher, Knott, Perry, and Pike counties in the coal boom in the 70's. Millions taken out but very little put back into the counties. Yet hundreds of thousands of dollars were put back in Lexington, Frankfort, and Louisville, but very little or none paid in. Very interesting topic.