With coal severance tax shrinking, lawmakers must be more 'disciplined' in spending it, Stivers says

06/24/2013 07:35 AM

The days of politically popular project spending paid for by coal severance tax may be coming to an end as lawmakers must be more “disciplined” to focus the funding on long-term job training and education programs, the Senate’s leader said.

Senate President Robert Stivers, R-Manchester, said the shrinking tax base in Eastern Kentucky as miners are laid off and mines are closed — or not opened — means that lawmakers from that area won’t have the luxury of being able to earmark funds for projects that have little economic development value. Kentucky has seen its coal severance tax receipts drop by $100 million.

“We’re going to have to be more disciplined. We can’t sit there and build trophy cases and flag poles and do programmatic functions that last for a season. I’m not saying some of those programs aren’t good but it’s not something that’s going to have a 20-year impact,” Stivers said (4:00).

Stivers was using real examples. In 2008, House Democrats tagged $5,000 of the coal severance tax for a trophy case at Hazard High School and $15,000 for a flagpole at the Knott County Area Technology Center.

Stivers also said it was Democratic House Speaker Greg Stumbo who wanted to use $2.5 million of coal severance tax in the last budget to help finance a study of renovations to Rupp Arena, where the University of Kentucky plays basketball.

When Rep. Leslie Combs, D-Pikeville, initially proposed using some coal severance tax money to fund scholarships, Stivers said her proposal to have those funds pay for students in six counties to attend the University of Pikeville was “inappropriate.” Instead, Stivers said he supports a broader approach that provides scholarships to students in coal-producing counties so that they could go to any college or university in the region. That proposal failed to pass last session.

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