Struggling coal county exec fails to get tax aimed mainly at natural-gas producers; layoffs coming

Letcher County, Kentucky (Wikipedia map)

Leaders in a depressed Eastern Kentucky coal county failed to pass an ordinance Monday that "would require a $2,500 license for every facility extracting non-renewable resources," Sam Adams reports for The Mountain Eagle in Whitesburg, Ky. The tax, which would have been levied on gas wells, coal mines, gravel quarries and other such operations, would have resulted in about $3.7 million in revenue.

The Letcher County Fiscal Court tied 3-3 on the proposal by County Judge Executive Jim Ward, who said it would have helped make up for the 75 percent loss in coal severance-tax receipts, Angela Reighard reports for WYMT-TV in nearby Hazard: "I was trying to think outside of the box so it wouldn't put a tax directly on the people here. Some of the court members already told me they wouldn't vote for an occupational tax or a net profit tax. They won't vote to raise property taxes. So, that doesn't leave me with very many options."

Ward told Adams that "state officials are projecting Letcher County to be $1.3 million to $1.5 million short on revenue next year and revenue is already down sharply." He said the county's workforce is down to 108 employees, from 190, "and the next step would have to be furloughs, cutting road department employees to four days a week. He said that would still not bring the county spending in line with revenue and the pain it would cause the road workers is not acceptable."

Ward said the tax would have restored the budget to 2012 levels, "before the bottom dropped out of coal production in Eastern Kentucky," Bill Estep reports for the Lexington Herald-Leader. "Ward said he thought the fee was a fair proposal because extractive industries have taken billions of dollars worth of resources from the county." He said "the oil and gas industry recovered $600 million worth of product from the county in the last decade alone."

The Mountain Eagle, which has a two-week paywall, can be accessed here.