Baby D's Bagels
$20 Worth of Food and Drink for Only $10
Photo by Shawn Poynter

July 30, 2013

Reclaiming Kentucky

Why is the coal severance tax funding Rupp Arena’s renovation?

Jim Gray, the mayor of Lexington, can barely contain his smile. “This is a big day,” he says, his voice shaking with excitement. “This is a big day for Lexington. This is a big day for Big Blue … Just a big day for our state.”

The big news is that the Los Angeles architectural group NBBJ will redesign Rupp Arena and the downtown Lexington convention center. “We will free Rupp Arena and reinvent it.” This press conference, which includes Gov. Steve Beshear, is meant to celebrate the upcoming renovation. According to Mayor Gray, this project “will connect Lexington’s urban core to our world-class rural landscape.”

This press conference comes on the heels of the revelation that $2.5 million of the Rupp Arena money will come from the coal severance tax — money coal companies have to pay to coal-producing counties as compensation for the resources they extract. When The Lexington Herald-Leader reported the story, they quoted House Speaker Greg Stumbo as saying, “Though Rupp is not in the coalfields, many believe it plays an important role in the state because of the tradition of the University of Kentucky basketball program, and there is strong alumni support in our region as well.”

Coal companies pay that tax because coal is not renewable: Once it is taken, its value is gone forever. That makes coal severance money extra valuable. Many find it unfair that the poorest counties in the state will have to use that money to fund Lexington’s downtown project.

At the press conference, Gov. Beshear didn’t address the controversy directly, but he suggested what benefited Lexington benefited the entire commonwealth. “Strengthening this city strengthens this state,” he said. “Lexington is one of the state’s economic engines. Together we can put this engine to a higher gear.”

Ultimately, however, this story isn’t just about Rupp Arena. Two-and-a-half-million dollars is pocket change compared to what the renovation will cost. What’s more interesting is the debate that has followed. It shows that no matter how often we address this issue, we are operating on outdated assumptions about coal, about poverty and about the future of rural Kentucky. Right now, there are billions of dollars that the coal companies have paid that could be used to help poor counties and hire laid-off miners. The bulk of that money is simply not being spent. The problem isn’t that some of that money goes to Rupp Arena; it’s that so little of that money goes to where it is supposed to go.

 

After the press conference, LEO Weekly asked Gov. Beshear if the state still planned to use coal severance tax to pay for the Rupp Arena renovation. “No,” he said, “not to my knowledge.” When asked the question a second time, the governor shook his head. “No, no, no,” he said. “Not anymore.”

LEO then asked, “Do you mean no money aside from what’s already reported?”

“Right,” he said. “No more money than the $2.5 million.”

When asked a follow-up, the governor said he’d have his energy secretary get in touch. Then he nodded and left without taking the reporter’s name or contact information. A follow-up call to Energy Secretary Len Peters went unreturned.

Matt Jones — host of the morning call-in show “Kentucky Sports Radio,” founder of the website of the same name, and arguably the state’s biggest UK fan — expresses disappointment that coal money is going to Rupp. “The symbolism of it really irks me,” he says. “Every time coal is mined, something is lost in Eastern Kentucky. What’s taken from this area cannot be replaced.”

Though Jones is a proponent of the renovation project, he feels there are better ways to fund it. “If you don’t think the (coal severance) money should go to Eastern Kentucky, then why have a tax on it at all?”

Jones, originally from Middlesboro, took personal umbrage at Stumbo’s statement that Eastern Kentuckians benefit from the renovation because they are UK fans. “I like Stumbo, but it offends me that he, as an East Kentuckian, thinks because we like basketball, we’d be OK with this … People in Eastern Kentucky love UK? Sure. People in Central Kentucky love UK, too. Let them pay for it.”

Jones disputes the often-heard complaint that Lexington and Louisville support poorer counties through their taxes, so those counties can support the cities with their coal. “That’s a tax on income, which goes to various funds across the state,” he says. “That’s why you live in a state. This money exists for a particular reason. If you get past helping East Kentucky, then why do it?”

Stumbo tells LEO that the story in The Lexington Herald-Leader was written by a reporter “who didn’t want to hear the rest of what I had to say.” He says the $2.5 million is part of a deal that would bring back more money to coal counties. House Bill 499, passed last year, restores $19 million — money Gov. Paul Patton transferred from coal severance taxes to a workers’ compensation fund — to coal counties “where it belongs.” “Any way you look at it, we’re bringing in more money than we’re sending out,” Stumbo says.

 

The biggest myth about the coal economy in Eastern Kentucky is that there is a coal economy in Eastern Kentucky. There are roughly the same amount of working coal miners in Appalachian Kentucky (9,500) as there are disabled citizens in Pike County (9,200). There used to be a coal economy, but now “coal” is more of a culture than a job-provider. The amount of coal mined and the amount of coal jobs are evaporating at an alarming rate. Coal mining in central Appalachia peaked in 1990 and has declined at an exceptionally high rate ever since. Kentucky’s coal-producing Fifth District is the poorest congressional district in the nation, and its residents have the lowest life expectancy and, according to a Gallup poll, the lowest “state of physical, mental and social well-being.” Any honest discussion of the Kentucky economy has to start with the fact that what the area is doing right now isn’t working.

Yet many Kentucky politicians continue to say, “Coal is our future.” They blame the job losses on environmental restrictions and imply that if the EPA would “get off our backs” — to use Gov. Beshear’s phrase — then the coal jobs would reappear. In spite of warning after warning from scientists, economists and concerned citizens, they resist the call to transition to a post-coal economy.

“I would tell those people to face reality,” says Evan Hansen of Downstream Strategies, an environmental consulting group based in Morgantown, W.Va. They predict a mammoth decline in Appalachian coal production over the next few decades, with the most precipitous drop coming in the next few years. “So long as politicians have decided that they will fight reality and not come to the table, they are losing out on opportunities,” he says. “Instead, they’ve decided to act like it’s not happening.”

“Eastern Kentucky should have been transitioning away from a coal economy long before now,” agrees Stumbo. “Everyone knows coal has a finite life.”

Stumbo believes the future is investing the same money in higher education. “Until the state recognizes the need for a public four-year college, there’s not going to be a bright future (in Eastern Kentucky). We send as many students to college as the rest of the state, but there’s nowhere to finish.”

He says college is a way of keeping young talent in the area and calls out the regional colleges, like Pikeville and Alice Lloyd, that have come up short. “We were supposed to be serviced by the regional universities, but that just didn’t happen. If you look at it, they didn’t meet their challenge.”

Coal has been a part of Appalachia for so long that many citizens never thought they’d have to prepare for any alternative.

“Coal has historically operated on a boom-and-bust cycle, so it’s not hard to understand why some folks might think, ‘If we just wait it out, the boom will come again,’” says Carrie Ray, research and policy associate of the Mountain Association for Community Economic Development (MACED). “But all signs indicate that this next boom isn’t coming — even our state secretary of energy agrees.”

She stresses the need for urgency. “With the coal industry in significant decline in the region, severance money is not going to be around forever, so we need to be planning for the future. Well, we needed to be planning for the future 20 years ago, but we absolutely can’t wait any longer. Severance funds are a significant source of resources that are intended for economic development and diversification in the coalfields. We just aren’t spending them that way.”

“I don’t know what the future of Eastern Kentucky holds,” says Matt Jones. “But it doesn’t take a rocket scientist to know we have to diversify the economy.”

Though Jones identifies himself as a liberal, he gets frustrated with other liberals who dismiss coal and coal-culture out of hand. “Whatever you think about coal, whatever side of the aisle you’re sitting on, you have to find the individuals who work in coal day-to-day something. You can’t just replace the economy without having something to replace it with.”

 

Interestingly enough, right now there is up to $2.5 billion of federal money that could not only kick-start this transition, but also provide work for many of the thousands of miners who have been laid off over the past 18 months. The money comes from the Abandoned Mine Lands Fund, which coal companies pay to reclaim abandoned strip mines. “Reclaim,” in this context, means to refurbish and reforest the land, getting it as close as possible to its natural state before the land was mined. The problem is the money is simply not being spent.

“It’s almost impossible for anyone in Eastern Kentucky to get their hands on that money,” says Stumbo. “Congress has kept that money bottled up for 30 years. It’s the hardest money to access … If I knew the answer to (why), I’d probably be the smartest man in America.”

Stumbo points out that the jobs theoretically created by reclamation are jobs miners are uniquely qualified to do. “Most miners can do darn near anything,” he says. “They have to run equipment. They have a great skill-set.”

It’s a point echoed by Carrie Ray of MACED. “Reclamation … has the potential to be a big job creator, and one that can employ former miners who know how to operate the heavy machinery required to break up the compacted soil, regrade, etc.” Outside of the environmental and health benefits of such a cleanup, she says the short-term economic benefits are substantial. “The best use of AML funds would be to put Appalachians back to work on these reclamation jobs.”

Although AML funds have to focus on reclaiming old sites, the coal severance tax is more flexible. Ray sees great opportunity here. “Miners have skills that can be used in other industries, whether it’s the electrician who gets trained to install energy-efficient lighting or the dozer operator who can operate the heavy machinery needed to replant forests on abandoned mine sites. The key is to provide meaningful work. A person who’s a coal miner because it’s ‘in his blood,’ so to speak, is not going to be fulfilled answering phones at a call center for $10 an hour.”

She fears the funds won’t be spent this way. Her worst-case scenario is that “the money continues to be spent on one-off projects or to fill budget gaps, and in 20 years, we find we barely have the money to do even that anymore, much less make the huge investments we need to bring the Appalachian economy around.”

Ultimately, the Rupp Arena renovation may be a “one-off project,” or it may allow the “economic engine” of Lexington to shift to a higher gear. Either way, a region in Kentucky is still the absolute poorest part of America. Resources exist to help it transition into a healthy, sustainable economy. No one denies there’s a need for jobs, no one denies there is local talent, and most agree that Appalachian coal has helped build the nation. Now people have to decide if Appalachia is worth renovating. 

Superbly written article, if

By ronan1122
Superbly written article, if only all bloggers offered the same content as you, the internet would be a far better place.. dale Buczkowski

Thanks for sharing excellent

By ronan1122
Thanks for sharing excellent informations. Your web-site is very cool. I'm impressed by the details that you have on this web site. It reveals how nicely you perceive this subject. Bookmarked this web page, will come back for extra articles. You, my pal, ROCK! I found simply the information I already searched all over the place and simply couldn't come across. What a perfect web-site. secret survey by michael fiore

Cool article it's really.

By ronan1122
Cool article it's really. Friend on mine has long been awaiting just for this content. More about Got WPAC

I think this is an

By ronan1122
I think this is an informative post and it is very useful and knowledgeable. therefore, I would like to thank you for the efforts you have made in writing this article. bubblegum casting

I just want to say thanks

By Commenterman
I just want to say thanks for your wonderful post, it is contain a lot of knowledge and information that i needed right now. You really help me out my friend, thanks Click here

This is a good post. This

By carter1122
This is a good post. This post gives truly quality information. I’m definitely going to look into it. Really very useful tips are provided here. Thank you so much. Keep up the good works. the secret survey michael fiore

Understanding both

By Commenterman
Understanding both advantages and disadvantages are important in order to choose the best internet marketing strategy. Then consider yourself one of the few, true internet marketers. Jumping Castle Hire Melbourne

http://pikavipithetitilille.fi

By windii
This is a pretty advise in an remarkable streak of capacity, monumental route of procure this text to discourse. http://pikavipithetitilille.fi

Bonjour, J’aime beaucoup

By Commenterman
Bonjour, J’aime beaucoup ce site, surtout l’article sur les énergies renouvelables. En effet, de nos jours, il faut faire attention au peu de denrée qu’il nous reste sur Terre, je parle bien sûr du pétrole Korkmaz

I really enjoy simply

By Commenterman
I really enjoy simply reading all of your weblogs. Simply wanted to inform you that you have people like me who appreciate your work. Definitely a great post Hair Salons

The Venus Factor focuses on

By Commenterman
The Venus Factor focuses on the main issue of women's fat loss problems and provides a fat loss solution for women only around the world to lose belly fat and maintain a long term healthy weight Zemun

This is also a very good

By Commenterman
This is also a very good post which I really enjoyed reading. It is not everyday that I have the possibility to see something like this. energy efficient space heaters

Thanks for taking the time

By ronan1122
Thanks for taking the time to discuss that, I feel strongly about this and so really like getting to know more on this kind of field. Do you mind updating your blog post with additional insight? It should be really useful for all of us. https://www.rebelmouse.com/thevenusfactorreview

You neeԁ to take part inn a

By Commenterman
You neeԁ to take part inn a contest for one of the best sies օn tɦe net. ӏ'm going to highly recommend this sіte! jocopeople

onjour, J’aime beaucoup ce

By Commenterman
onjour, J’aime beaucoup ce site, surtout l’article sur les énergies renouvelables. En effet, de nos jours, il faut faire attention au peu de denrée qu’il nous reste sur Terre, je parle bien sûr du pétrole Buy Seo Services

This really is not much of a

By Commenterman
This really is not much of a secret that everyone out there is toasdad be a successful business on the internet, but a fact is that you include that it can be successful enough opportunities for everyone. Nfl Tickets

I high appreciate this post.

By carter1122
I high appreciate this post. It’s hard to find the good from the bad sometimes, but I think you’ve nailed it! would you mind updating your blog with more information? ebookers discount code

found your website perfect

By Commenterman
found your website perfect for my needs. It contains wonderful and helpful posts. I have read most of them and got a lot from them. To me, you are doing the great work. HMRC Mileage Investigation

found your website perfect

By Commenterman
found your website perfect for my needs. It contains wonderful and helpful posts. I have read most of them and got a lot from them. To me, you are doing the great work. HMRC Mileage Investigation

Very good points you wrote

By ronan1122
Very good points you wrote here..Great stuff...I think you've made some truly interesting points.Keep up the good work. Bail Bonds Costa Mesa

Great Information sharing ..

By ashleydanielle
Great Information sharing .. I am very happy to read this article .. thanks for giving us go through info.Fantastic nice. I appreciate this post. muscle maximizer kyle leon pdf reviews

I will apply what you said

By Commenterman
I will apply what you said for my website and for sure I will have excellent results! At least that is my opinion! yacht charter Greece here

Your content gives readers

By Commenterman
Your content gives readers things to think about in an interesting way. Thank you for your clear information. PSN Code Gratuit

This is a very good tips

By Commenterman
This is a very good tips especially to those new to blogosphere, brief and accurate information… Thanks for sharing this one. A must read article. File Protection for Data Privacy Protection

This is my first visit to

By Commenterman
This is my first visit to your blog! We are a team of volunteers and starting a new initiative in a community in the same niche. Your blog provided us useful information to work on. You have done a outstanding job! metrowestmusicians.com

You truly did more than

By Commenterman
You truly did more than visitors’ expectations. Thank you for rendering these helpful, trusted, edifying and in addition cool thoughts on the topic Acai

employment!Experiential

By Commenterman
employment!Experiential travel is mostly about valuing any experiences you undoubtedly have about what that you're told it's best to being engaging in by some other individual. We're many different, Urgent Care

Because Harawira is going to

By Commenterman
Because Harawira is going to be under-insured. When death finally does occur relative should start their own funerals. However, the wreath is pesticides a necessary step in funeral costs. Cremation is also a nice online review for us Ch Play

I am commenting to let you

By Commenterman
I am commenting to let you know what a terrific experience my daughter enjoyed reading through your web page. She noticed a wide variety of pieces, with the inclusion of what it is like to have an awesome helping style to have the rest without hassle grasp some grueling matters. Email Service

Good website! I truly love

By ronan1122
Good website! I truly love how it is easy on my eyes it is. I am wondering how I might be notified whenever a new post has been made. I have subscribed to your RSS which may do the trick? Have a great day! new kinds of apples

there were special surprise

By Commenterman
there were special surprise rockstars at every turn. Kris had the chance to shoot awesome live performance shots as well as intimate band portraits off the stage Promotion Agentur Messe

This is really a nice and

By carter1122
This is really a nice and informative, containing all information and also has a great impact on the new technology. Thanks for sharing it https://www.rebelmouse.com/reverseyourdiabetestodayreview/

Great write-up, I am a big

By ashleydanielle
Great write-up, I am a big believer in commenting on blogs to inform the blog writers know that they’ve added something worthwhile to the world wide web!.. best bitcoin hosting

There are tons of things in

By Commenterman
There are tons of things in the welding area where people can learn and make better of. The third thing I want to talk of if you have the gas and still get holes in the weld. As they begin their attack at the Wall, Jon manages to escape and rejoin the Watch. Timed lock down for Data Privacy Protection

Finally the local

By lanarina12
Finally the local authorities realized that the Lexington convention center needed a remodel, hopefully the Los Angeles architectural group NBBJ will come with and practical interesting design. They should invest in http://www.tnbpowersolutions.com/industrial_ups, such a building needs a clean, dependable electric power source.

I am always searching online

By Commenterman
I am always searching online for articles that can help me. There is obviously a lot to know about this. I think you made some good points in Features also. Keep working, great job! Castle Clash Hack

I really impressed after

By ronan1122
I really impressed after read this because of some quality work and informative thoughts . I just wanna say thanks for the writer and wish you all the best for coming!. code carte itunes gratuit

I have read your blog it is

By ronan1122
I have read your blog it is very helpful for me. I want to say thanks to you. I have bookmark your site for future updates. https://www.facebook.com/textyourexbackreview

I have bookmarked your blog,

By ronan1122
I have bookmarked your blog, the articles are way better than other similar blogs.. thanks for a great blog! meubelbewaring

Thank you so much for

By ronan1122
Thank you so much for sharing this great blog.Very inspiring and helpful too.Hope you continue to share more of your ideas.I will definitely love to read. minecraft free server

thanks for this usefull

By ronan1122
thanks for this usefull article, waiting for this article like this again. get the girl code

traveled in their Jones RV

By Commenterman
traveled in their Jones RV from party to party. What a wild ride! concur with your conclusions and will eagtraveled in their Jones RV from party to party. What a wild ride! concur with your conclusions and will eag payday loan debt relief

Thanks for the blog loaded

By ashleydanielle
Thanks for the blog loaded with so many information. Stopping by your blog helped me to get what I was looking for. LTE Speedtest

Good blog

By ndhn
Good blog! I truly love how it is easy on my eyes it is. I am wondering how I could be notified whenever a new post has been made. I’ve subscribed to your feed which may do the trick? Have a great day! Vaporizers

t's not my first time to

By Commenterman
t's not my first time to visit this web site, i am browsing this web page dailly and take nice facts from here every day Buy Revines

I accumulate supportive data

By Commenterman
I accumulate supportive data on this point as I am chipping away at a business venture. Much obliged to you posting relative data and its presently getting to be simpler to finish this chore. Data Security for Data Privacy Protection

Many thanks for this

By Commenterman
Many thanks for this brilliant post! Many points have extremely useful. Hopefully you'll continue sharing your knowledge around. lasik green bay

Existing without the answers

By Commenterman
Existing without the answers to the difficulties you’ve sorted out through this guide is a critical case, as well as the kind which could have badly affected my entire career if I had not discovered Montel Williams Blender

Thank you for an additional

By ronan1122
Thank you for an additional great post. Exactly where else could anybody get that kind of facts in this kind of a ideal way of writing? I have a presentation next week, and I’m around the appear for this kind of data. bubblegum casting

Great job for publishing

By ronan1122
Great job for publishing such a beneficial web site. Your web log isn’t only useful but it is additionally really creative too. There tend to be not many people who can certainly write not so simple posts that artistically. Continue the nice writing bubblegum casting