Whitesburg KY

Coal tax cuts bring layoffs to workers in W.Va. counties

West Virginia’s decline in coal jobs is resulting in mass layoffs for public employees in rural counties, David Gutman reports for the Charleston Gazette.

Boone County, W.Va., laid off 11 part-time public employees in December 2014. Nicholas County announced in March it was laying off 24 employees, and another 30 were asked to take pay cuts. And last week, Mingo County laid off 12 employees, cut hours for four more and increased the share of health premiums employees must pay.

The one area these and other counties point to is a loss of coal severance taxes, Gutman writes. “In 2012, coal severance taxes brought in more than $530 million, about double the take of a decade ago, the result of higher coal prices. But 2012 turned out to be the zenith. Last year brought in about $407 million in coal severance tax money, and this fiscal year, which ends in June, overall severance tax collection (which includes oil and gas) is nearly $50 million below expectations.”

Eleven of West Virginia’s 28 coal producing counties saw severance tax revenue from 2010 to 2014, but most of those counties are located in the northern part of the state, Gutman writes. Gas revenue is expected to decline in the next few years because wells are producing more gas than they can sell, and “coal production in Southern West Virginia isn’t likely to rebound anytime soon either, the result of a natural gas glut, depleted seams and environmental regulations.”

Boone County lost $3 million in coal severance tax from 2010 to 2015, Gutman writes. Mingo County has dropped from $1.7 million five years ago to an expected $800,000 this year. Webster County’s coal severance revenue fell 57 percent from fiscal year 2010 to 2014. Fayette County’s coal severance revenue is down 20 percent since 2010, and nearly 50 percent since it peaked in 2012. Wyoming County’s coal severance is up since 2010 but down $200,000 since peaking in 2012. Raleigh County has lost 25 percent of the coal severance money it had in 2010.

Source: University of Kentucky Institute for Rural Journalism and Community Issues

Leave a Reply