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Tuesday, October 15, 2013

Diminishing coal industry spurs calls for economic diversification in Eastern Kentucky

As its coal industry shrivels, Eastern Kentucky will need a way to diversify its job base, according to a regional economic-development organization. The Mountain Association for Community Economic Development is asking lawmakers to establish a strategic fund for the region's economy and use coal severance-tax money to make it happen.

Herald-Leader photo by Charles Bertram
Eastern Kentucky lost more than 5,700 coal jobs in the last two years. Some people believe federal environmental rules are the reason, but many industry analysts say the low price of natural gas is the major factor, Bill Estep reports for the Lexington Herald-Leader. The decline in coal production has meant a decline in revenue from the state severance tax on coal, notes Russ Cassady of the Appalachian News-Express in Pikeville.

The MACED plan calls for using 25 percent of the severance tax, which could not only be used to set the plan immediately in motion but also to provide for other needs. State Rep. Leslie Combs of Pikeville seemed to favor of the plan but pointed out that "many local officials would oppose splitting coal-severance money away from their already-tight budgets," Estep writes. Harlan County Judge-Executive Joe Grieshop told Estep that giving up money now would be hard, but could benefit everyone in the long run" "Our situation will not improve without major overhaul."

Severance-funded projects have helped counties recently, but haven't been part of a big plan to boost the economy. "Piecemeal projects will never be as successful as those implemented in conjunction with a wider vision for how each piece works together," MACED said in its report. It recommended a new Appalachian commission that would promote "broad participation in creating a development plan, solicit the best ideas for the region's economic transition, and promote coordination," Estep reports.

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