A nonprofit publication of the Kentucky Center for Public Service Journalism

Tyler White: Don’t burden coal country with a tax increase on the industry; coal needs to compete

Black Lung is a terrible disease. Just one case is a case too many. All miners who suffer from black lung must receive the benefits they deserve. 

These are indisputable facts.

But we need to ensure the systems in place to secure benefits for those who need them are the right solutions. Handled incorrectly, future funding for The Black Lung Disability Trust Fund could do unintended damage to coal country. It’s a mistake we should be careful not to make.

Tyler White

At the end of this year, an excise tax on every ton of coal production used to fund the Black Disability Trust Fund is scheduled to revert to its original statutory levels. It’s a development that has some concerned about the solvency of the fund and benefits payments from it. But even with the excise tax rates reverting to their original levels, revenue for the fund will be sufficient to cover claims. Last year, the excise tax collected $429 million in revenue while $198 million was needed to cover benefits payments. Despite concern to the contrary, benefits will be covered under the reduced rates.

Questions over the solvency of the fund are really questions that should be narrowly focused on the fund’s debt. The fund does, in fact, carry debt but it’s debt that exists because of government mismanagement of the fund that dates back decades. 

Soon after the fund’s inception in 1977, after funding had been carefully matched to cover those eligible, the government decided to change the eligibility criteria and more than 23,000 previously denied claims became the fund’s responsibility. The fund has been saddled with debt ever since.
In 1986, Congress temporarily raised the excise tax rates to address that debt. Those higher levels are finally scheduled to revert back to their original levels. It’s relief the industry – still reeling from Obama years – desperately needs. It’s also relief that makes sense. In 1986, there were about 160,000 Trust Fund beneficiaries. Based off 2017 data, there are now less than 26,000. 

Importantly, the Black Lung Disability Trust Fund only pays benefits for claims when no responsible operator can be identified. Along with the excise tax, and separate from the fund, each operator of a coal mine is responsible for paying benefits to its miners. When a claim for benefits is approved, it is paid by the responsible operator, which is generally the last coal operator to employ the miner.

Yet despite the fact coal companies are already paying twice to ensure miners are covered, there is a crowd both in and outside of Congress that wants to see Congress pull a “U” turn on the agreement to return the excise tax to its original levels. Doing so will amount to a $200 million per year tax increase on an industry that needs just the opposite. 

Raising the excise tax on the industry will put increased strain on coal companies fighting to compete. The result could very well be more mines shut down and more job losses – the very last thing coal communities need. Placing more miners’ jobs at risk rather than saving those jobs is reason enough to reject a higher excise tax.
It would be a grave mistake to let misplaced concern over black lung benefits deepen the challenges facing coal communities. Coal country needs a chance to compete again, not tax increases.

Tyler White is president of the Kentucky Coal Association. He can be reached at twhite@kentuckycoal.com

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  1. Mark Nolan says:

    It is disappointing that KY Forward would publish such a blatant piece of false propaganda without at least seeking someone knowledgeable to present the facts. Could KY Forward not locate the United Mine Workers office for another view of the Black Lung Trust Fund status?.

    White has no credibility, and KY Forward jeopardizes its own reputation by print this fake news.

    • judyclabes says:

      Mr. Nolan, We can’t (and won’t) control the opinions of others and we do have an OPINION piece from the other side in the queue. We are open — as everyone should be — to all opinions and points of view. That’s why we publish these under “Opinions,” so that discerning readers can understand both sides and make up their own minds. Just because you disagree with it doesn’t make it “fake news” — notwithstanding the fact that it is not “news” in the first place.

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