Last week marked the 45th anniversary of the late Sen. Robert Kennedy’s visit to Hazard and other Eastern Kentucky towns. It was here in Hazard where he walked along Liberty Street with a group of locals as he toured one of the nation’s most economically distressed communities. It was here where he saw some of the worst poverty our nation has to offer. And it is here, in many Eastern Kentucky counties, where not enough has changed for the better.
One thing that struck us about Sen. Kennedy’s visit more than four decades ago was the coverage of his visit. The Hazard Herald covered Sen. Kennedy widely that week, publishing several photos and an editorial on Feb. 15, 1968. In that editorial, the Herald advocated for an extraction tax on minerals, of which Kennedy was also in support. A similar tax would later be approved, and we know it today as coal severance.
Here’s what the Herald said about it then: “If an extraction tax had been placed on minerals twenty years ago, Eastern Kentucky would be envied for its wealth, not scorned and televised nationwide as the ‘poverty belt.’”
The state did begin collecting coal severance taxes in 1972, but obviously, 41 years later, there’s no envy and little wealth.
Though poverty rates have significantly declined since 1972, rates in Central Appalachia remain well above the state and national averages, and today two things are very clear to us: One, not enough coal severance is coming back to the counties most impacted by coal mining, and two, in some cases, the taxes that are trickling back to the coal counties are not being used wisely.
There are pockets of the region faring much better than others. Pike County continues to develop, and here in Perry County we’ve not been facing massive budget cuts or layoffs, and our business climate seems to remain healthy despite a massive downturn in the coal industry.
Other coal counties simply are not faring as well, however, and with coal on the decline their outlook appears bleak. But while some severance revenues do return, now is a good time for these counties to begin putting some funds back for a rainy day. Form a trust with these severance funds, allow them to build over time, and help build the region in the future. This isn’t a new concept, but it’s one certainly that makes sense now.
Often we hear our elected leaders make remarks about conserving for future generations. Here is a perfect example, and an opportunity for our coal counties to actually build wealth and capacity over the years from which our children can benefit.
The sad fact at present, however, is that not enough coal severance is coming back to our coal counties. We don’t expect this will change, considering roughly half of coal severance taxes go to the state’s general fund and the state can little afford to lose these funds with a pension crisis looming.
Considering all of this — the projected decline in coal severance revenue, ongoing poverty in Appalachian coal counties, and a disproportionate amount of severance never making its way back to the coal counties — it makes even more sense now to begin putting some funds back for future use. Our region has suffered for too long from poor decisions; it’s time now to make a wise one.
— The Hazard Herald