Lull in mining means $88M less in coal tax revenue

Deputy State Budget Director John Hicks told members of the Interim Joint Committee on Energy and Environment that coal tax revenue is projected at $245 million this year. That's $88 million less than was expected when lawmakers passed the budget five months ago.

Hicks said the state budget can absorb the shortfall, but it will hit county governments hard.

State Sen. Dorsey Ridley, D-Henderson said the shortfall will mean local governments will have to prioritize infrastructure projects that are on the drawing boards and will likely have no choice other than to delay some.

Greg Harkenrider, deputy director of the Governor's Office for Policy Research, said the financial woes could be long-lasting.

"If there's a rebound in the offing, we haven't seen it," said Harkenrider, an adviser to a group of state economist charged with monitoring trends for the governor and lawmakers.

An unseasonably warm winter left power plants with huge stockpiles of unused coal because consumers were using less electricity to heat their homes, contributing to a steep decline in the price of coal. That long stretch of mild weather combined with other factors that led to the layoffs of some 2,000 coal miners in Kentucky's Appalachian region.