Environment
3:17 pm
Thu September 6, 2012

Lull in Mining Means $88 Million Less in Revenue

A slowdown in Kentucky's mining industry is causing financial problems. Diminished severance tax revenue could force some planned construction projects in the coalfields to be postponed.

Revenue from the state's coal severance tax is plummeting, with mines shutting down and miners being laid off.

Deputy State Budget Director John Hicks told lawmakers today that coal tax revenue is projected at $245 million this year. That's $88 million less than was expected when lawmakers passed the budget less than five months ago.

While some of the severance tax funds go to the state government, a portion remains in the coal-producing counties. The state budget can absorb the shortfall, but it will hit county governments hard.

Democratic state senator Dorsey Ridley of Henderson said the shortfall will mean local governments will have to prioritize infrastructure projects that are on the drawing boards and will likely have no choice other than to delay some.