We face a funding crisis in our county government. The tragic loss of jobs, revenue, and severance tax dollars caused by the decline in coal production, the decrease in the price of natural gas, and the decline of drilling new wells has forced us to come together to face this terrible problem that could tear our community apart. Our county judge/executive and magistrates have been unable to agree on a response to this crisis, but have now proposed a tax that could bankrupt the county government and shut down one of the leading economic engines in Letcher County.
The “business license fee” ordinance the county gave a successful first reading to at the last meeting is nothing more than an all-out attack on the oil and natural gas industry. The county believes it has the legal authority to create this new tax because they want to apply it to all “non-renewable” mineral sources, including coal mines and rock quarries. But how they decided to apply the tax means the oil and gas industry would basically be footing the bill. The county wants to tax $2,500 for every well in Letcher County, probably driving the whole industry out of town. If it passes, the tax would destroy the natural gas industry in Letcher County and all the economic benefits the industry has given the county, including severance taxes, payment to royalty owners and hook-ups for farm tap users.
The coal industry is opposed to this ordinance, the crushed stone industry is opposed to this ordinance, and the oil and natural gas industries would be put out of business with this ordinance. The small natural gas producers in Letcher County would have no way to pay this bill and would be financially ruined. The big operators would almost certainly start making decisions to plug wells and lay off employees. All of that happening would cost the county in severance tax dollars and reduce overall economic activity. But worse than all that, if this ordinance passes the county will face enormous legal expenses when it starts getting sued by everybody. To add insult to injury, we would likely lose in court because it is pretty clear that this tax targets one type of business more than any others. That is not fair, and it is probably not legal.
We urge the citizens of Letcher County to unite in opposition to the tax on coal, stone, and oil and gas up for a vote next Monday, April 10 at the Letcher County Fiscal Court. We truly must come together to address the county’s fiscal crisis, but we must do so in a responsible way that does not run off industries that have and can work in Letcher County, and would not lead to a financial and legal disaster for Letcher County. JOHN REEDY Mayking TED ADAMS Letcher