Rural Blog: Unmined coal worth less, leaving Kentucky coalfield schools short on funding

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School districts in Kentucky’s two coalfields are suffering due to a decline in tax assessments of unmined coal, which presumably has become less valuable because coal is losing market share to natural gas.

Kentucky Commissioner of Education Stephen Pruitt said that the decrease “will have a significant impact on at least 12 school districts, mostly in Eastern Kentucky, and their local tax revenue generated from the tax on coal assessments,” Valerie Spears reports for the Herald Leader.

According to Pruitt, the estimated loss in unmined mineral tax revenue for those districts is at least $4.3 million, Spears writes.

“We’ve got some districts that are going to be really struggling,” Pruitt said at the state Board of Education meeting. “I frankly don’t know what some of them are going to do. They’ve already dipped into the contingency funds to be able to keep the lights on in some cases.”

School districts in the eastern counties of Knott, Bell, Breathitt, Floyd, Harlan, Leslie, Letcher, Martin, Perry and Pike, and Hopkins and Union in the west, “are estimated to see losses of more than $100,000” each, Spears writes. “Pike County’s school district loss is estimated at $745,000.”

“The Department of Revenue’s preliminary unmined mineral assessments have declined 43 percent from the prior year, or $955 million, Pruitt said. Also, the number of active mines has declined from 647 in 2006 to 184 in 2016,” Spears notes.

The revenue could be even lower than forecast. Revenue officials told Department of Education staffers that some taxpayers with unmined mineral property were protesting the valuations, Spears writes. The protests essentially allow taxpayers “to dispute the value and provide the Department of Revenue with more information that may lead to a lower final unmined minerals assessment and less tax revenue for the school districts,” Spears notes.

The finance director for Knott County schools, Greg Conn, told Spears that officials hope the state will give the district extra money to help make up for the shortfall. If not, Spears reports, “The district will be forced to cut jobs next school year because it can’t absorb the $1 million loss, Conn said.”

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The Rural Blog is a digest of events, trends, issues, ideas and journalism from and about rural America, from the IRJCI, based at the University of Kentucky. The Institute for Rural Journalism and Community Issues is an extension program for rural journalists and news outlets. It takes no positions on issues and advocates only for strong news coverage, responsible commentary and things that make them possible, such as open-government laws. For more information see www.RuralJournalism.org.

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