Coal Tattoo

Gazette photo by Chip Ellis

Yesterday, anti-coal activists were busy with their latest publicity stunt, dumping 1,000 pounds of rock and dirt from West Virginia in front of  EPA headquarters in Washington, D.C.  And today, the folks from the industry front group FACES of Coal continued their own PR diversion campaign as they departed Charleston for a big pro-coal rally in the nation’s capital tomorrow.

But deep in the bowels of the West Virginia Capitol, there was some major good news out of legislative interim meetings here in West Virginia this week: Finally, a discussion at the statehouse about the costs and benefits of the state’s coal industry.

My buddy Larry Messina at The Associated Press has a report on the meeting in today’s Gazette:

State lawmakers were asked Monday to consider increasing not only the state’s main tax on coal but also the fees and fines paid on the trucks that haul that natural resource.

The recommendations were among a half-dozen from the authors of a recent report that concluded that the coal industry is costing the state budget more than it provides.

The West Virginia Center for Budget and Policy and the firm Downstream Strategies presented their findings to a House-Senate legislative interim subcommittee. Their June report estimated that while revenues from the industry topped $600 million during the 2009 budget year, it cost the state $97.4 million more.

The costs included $93 million spent repairing roads damaged by heavy coal trucks, and $173 million worth of tax credits and exemptions.

The story continued:

The report drew some of its revenue-related data from a February study of the state’s coal economy by researchers at Marshall and West Virginia universities. The lead Marshall contributor to that study warned lawmakers Monday of flaws in the subsequent report.

Cal Kent, Marshall’s vice president of business and economic research, said the June report omits property tax revenues and discounts the overall impact of severance-tax proceeds. Kent also took issue with the way it counted tax exemptions as costs to the state budget.

All told, Kent estimated that the industry provides $490 million more in revenues than costs.

Kent and Marshall researcher Elizabeth Eastham also provided figures showing that West Virginia levies the heaviest tax burden on its coal industry when compared to a dozen other coal-producing states, including all five of its neighbors.

Updated: Here’s a copy of Kent’s memo criticizing the Downstream Strategies report.


But [Rory] McIlmoil [of Downstream Strategies] and the budget and policy center’s Ted Boettner noted that their report also estimates $4 billion in such “legacy” costs as played-out surface mines that await cleanup and damage to state roads and bridges not yet repaired

Of course, Coal Tattoo has covered previously the release of the Downstream Strategies report that concluded coal actually costs the state government money and the WVU-Marshall-W.Va. Coal Association report that touted coal’s benefits to our state. Now, the Marshall researchers have posted two new reports: Coal Taxation in West Virginia and Taxation of Coal: A Comparative Analysis.

But the big positive was this:

Kent told lawmakers that the question of coal’s costs merited further study, while [Ted] Boettner said his group’s report aimed to start a dialogue on the subject. Delegate Nancy Guthrie, D-Kanawha, said the subcommittee should request a new study that draws from both reports as well as a third recently issued on the topic, and “determine, once and for all, what the true impact and costs and benefits are from coal.”

“Each one of these provides only a snapshot,” said Guthrie.

Both sides obviously have a right to use whatever tactics are available to them, from peaceful civil disobedience to high-priced PR efforts . And such campaigns shouldn’t be ignored as having played a role in making discussions like yesterday’s possible by getting the attention of the media and elected officials.

Whatever your own views on coal,  a more open and honest discussion of these issues is exactly what West Virginia and other coalfield states need, especially given the potential arrival very soon of “peak coal” and the expected decline in production here in Central Appalachia.