Coal Industry Costs Taxpayers Millions

Written by Amanda Starbuck

Topics: Coal

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The coal industry makes a great deal of noise about the benefits they bring to state budgets. But, here’s the inconvenient truth.

When it comes to the bottom line of state budgets, the coal industry costs the states more than it provides. Two reports released today by Downstream Strategies are among the first to examine actual revenues and expenditures related to coal industry employment, taxes and subsidies in Tennessee and West Virginia.

For example, in Tennessee, the report finds that the coal industry contributed just over $1 million to the state budget—less than one-tenth of one percent of the state’s total revenue in 2009. That benefit was overwhelmed by the costs imposed by the industry, including state subsidies, regulation, road repair and mine reclamation costs. The bottom line was an approximate net economic loss of $3 million for the people of Tennessee in 2009.

These are costs that, lacking a change in state policy, will be paid by the citizens of Appalachia for decades,” said lead report author Rory McIlmoil.

“We’ve long suspected that citizens, as taxpayers, carry an unfair share of the externalized costs of coal mining,” said SOCM Strip Mine Committee Chair, Cathie Bird. “This report takes us a huge step forward in trying to quantify some of the costs the people of Tennessee pay so that the coal industry can profit.”

Though coal brings in a bigger percentage of state revenues in West Virginia, the end result matches that of Tennessee; the $600.7 million in total revenues coal brought to the state was about $97.5 million less than it cost the state to support the industry.

Copies of both reports can be found at www.downstreamstrategies.com.

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