Commentary: Taxes on coal industry should increase

How do benefits from the coal industry stack up against the costs?

If you live below one of the thousands of forgotten dams that are part of coal's legacy, including one that threatened 150 homes in Letcher County earlier this month, your ideas might differ from those of the 18,000 Kentuckians employed by the industry.

A non-profit economic development organization, the Berea-based Mountain Association for Community Economic Development, set out to calculate coal's effect on the state budget, using methodology originated almost 30 years ago by the Legislative Research Commission.

Conclusion: Coal is a parasite on the state budget.

In 2006, state government spent $115 more on services and programs for the coal industry and those to whom it provides jobs than it collected in taxes from them.

The authors present detailed explanations for how they reached their conclusions, which you can find at www.maced.org/coal.

There's a lot to think about here, some of which will be subject to hot debate.

One conclusion is inescapable, though: The legislature should raise the coal-severance tax.

Kentucky's coal-severance tax rate, which is lower than West Virginia's, has been unchanged for 30 years. In 2006, the year that was studied, Kentucky collected less in severance taxes from the industry ($224 million) than it cost to repair roads damaged by heavy trucks transporting coal from mines ($239 million).

To read the complete editorial, visit The Lexington Herald-Leader.