Appalachia weary of failed revitalization promises


This story was originally published by Southerly.


Nina McCoy has been waiting for an answer to a question for 40 years: What happens to a coal county and the people who live in it when all the coal is gone? She still has the 1981 articles from when both the New York Times and the Louisville Courier-Journal posed the same question. Now McCoy, the fellow residents of Martin County, Kentucky, and much of Appalachia are on the verge of finding out. In the fourth quarter of 2020, her county produced just over 25,000 tons of coal, according to the Kentucky Energy and Environment Cabinet — a 26% drop from the previous quarter and a 73% decline year over year. County officials say they expect mining to cease altogether within the next year. 

“When I started teaching at the high school, there were 1,100 kids there, and now there are closer to 600,” said McCoy, who retired in 2014 after 31 years teaching biology at Martin County High School. “You’ve just seen an exodus of poor people.”

The loss of people — and coal mines — means there’s a fraction of the tax revenue there once was. Dozens of counties in the central Appalachian states of Kentucky, West Virginia, and Tennessee rely on money from coal companies in the form of severance taxes, which are collected based on how much coal is extracted from the ground. The states place loose guardrails around the revenue that is supposed to go toward economic development efforts, with localities often using the proceeds to offset spending on daily operations. In Kentucky, coal-producing counties also use a percentage of it for civic and social services including public safety, environmental protection, public transportation, health, recreation, libraries, and educational facilities. 

Southerly covered this downward trend in 2019, and it’s only worsened in the two years since. Martin County’s economic assistance-based coal severance revenue fell from $1.2 million in FY 2011 to just $79,085 in FY 2021— a drop of 93% in just a decade. 

“Once we’re declared a non-producer, which is right around the corner, we won’t have any coal severance left,” said Martin County Judge Executive Victor Slone. “We’re operating on a bare-bones budget. There’s nowhere really to cut right now. The only other option is to raise taxes on the poorest people in the commonwealth.”

It’s a story playing out all over central Appalachia: Kentucky coal production declined by two-thirds from 2011 to 2019; West Virginia coal production fell 31%; Virginia fell 48%. And as coal mines have disappeared, so has the population. There are 2,000 fewer people in Martin County than in 2010, and the poverty rate has hovered between 34% and 45% for the last decade. 

For 50 years, economists and researchers have warned the coal industry would permanently wane, and yet political leaders continue to offer hollow promises about its prospects for a comeback. External support for a broad economic transition looks closer than ever before: President Joe Biden’s administration says it will prioritize coal communities, and the largest union for coal miners recently endorsed a plan to move towards clean energy if miners are offered well-paying jobs in the industry. During the COVID-19 pandemic, money has flowed in through the two congressional stimulus packages, offering a buffer against layoffs and related revenue plunges. 

Martin County received federal pandemic relief last year, and is slated for another $2.1 million through the American Rescue Plan, according to Slone. That money is largely set aside for broadband, sewer and water infrastructure, and COVID-19 relief. Nearby Harlan County has reduced its employees through attrition, cutting parks programs, and reducing the hours and seasonality of a boat dock. 

Harlan County Judge Executive Dan Mosley said he and his peers are preparing for the infusion by lining up needed water, sewer, and broadband internet projects. At the same time, infrastructure money can’t be applied to daily operations. “We don’t have the luxury to use it to balance the budget,” Mosley said. 

Without more substantial federal support or a clear plan, the long-term outlook is hazy. Residents and local officials are struggling, helping each other survive through a patchwork system of mutual aid networks, fundraisers, and small grant programs.  

“We’ve hit our new baseline [for coal revenue],”said Sean O’Leary, senior policy analyst at the West Virginia Center on Budget and Policy. “We’ve kind of bottomed out, and this is the new reality going forward.”

The COVID-19 pandemic has made the problem of lost revenue and civic services even more urgent. Rural mountain counties were among the last to see documented cases of COVID-19, but became fertile areas for its spread based on high rates of co-morbidities and a withered system of hospitals and clinics. The coalfields’ long-running decline in population has also resulted in lower school enrollment and a resulting drop in state funding, and during the pandemic, unreliable broadband service made virtual school harder for many families. 

In late March, President Biden announced his $2.25 trillion infrastructure package, the American Jobs Plan, in Pittsburgh — Appalachia’s most prominent city. Parts of the package are clearly aimed to relieve distressed coal communities by reclaiming abandoned coal mines and gas wells, creating thousands of union jobs, and laying the groundwork for new economic growth in sectors like clean energy.

Even if the Biden administration is able to pass the bill through Congress, McCoy, from Martin County, remains skeptical that it will be put to good use. She’s seen a lot of federal and grant money pass through Martin County in the past, starting in 1964 when President Lyndon Johnson traveled here to pitch his “War on Poverty” programs.

Martin County’s median household and per capita incomes lag the state’s by about 10 percentage points, for example. It trails the state average of people that have graduated high school or have a college degree by about 12 percentage points. Only 37% of Martin County residents over 16 are counted in the workforce, versus 59% statewide. 

Other coal counties across the region struggle with similar problems. They serve populations with higher poverty rates, older residents, and poorer health outcomes, while also dealing with challenges such as aging infrastructure and vulnerability to flooding. In recent months, residents have taken to Facebook and other social media to set up mutual-aid networks to ensure that every family that needs help can ask for it within an emotionally supportive environment. “We know that things are extra tough in the hills and hollers right now,” reads the group description for EKY Mutual Aid. Members post when they need clothes, food, help with rent, or are running free yard sales. 

Central Appalachian states need a more coordinated and supportive approach to helping residents, but each is dealing with these issues slightly differently due to varying partisan control. Democrats control the governorship and state legislature in Virginia. Republicans control them in West Virginia. And Kentucky is split between a Democratic governor and Republican state legislature.

Virginia lawmakers recently repealed the state’s two coal tax credits, which were intended to spur production of metallurgical (steel-making) coal and encourage the use of coal in power plants. The credits subsidized the coal industry; a study by Virginia’s audit commission found that they lost money and sustained only a handful of jobs. Their most concrete effects were propping up the industry and effectively replacing lost severance tax revenue to fund the Virginia Coalfield Economic Development Authority, which tries to attract new businesses and grow existing ones through marketing and providing low-interest loans. Now that the tax credit is gone and only four coal-producing counties have severance tax revenue, the authority will likely shrink its operations and perhaps eliminate the loans, said its director, Jonathan Belcher. 

West Virginia’s coal industry fared better the last several years than in Kentucky or Virginia. But it has shrunk. “Looking at the past 12 months, we’ve done basically OK,” said analyst O’Leary. “A lot of that can be attributed to the stimulus. But revenue projections for the out-years are down significantly.”

West Virginia Gov. Jim Justice aggressively pursued a proposal this year to cut the state income tax and raise other taxes — including changes to oil, natural gas, and coal severance taxes — but the supermajority Republican state legislature failed to pass it. Instead, they approved a bill that would affect how oil and natural gas infrastructure is taxed in ways that will likely reduce local revenue. In Boone County, which used to be West Virginia’s top coal county, commissioners recently ordered staff cuts that included losing five sheriff’s deputies. 

A similar situation happened in Martin County two years ago. Sheriff John Kirk went viral with his Facebook warning to residents about budget problems. Today, he says he’s still in the same position and without enough funds to operate. On Saturdays, he gets help from two deputies still training in the police academy, but other times he often responds to calls across the county by himself. He’s not confident those two deputies will stay in Martin County once they graduate — they typically leave. “Why would you work at a sheriff’s office with no healthcare insurance for $12 an hour, when you can go to another sheriff’s office with better pay?” he said.

McCoy is at the forefront of a push in Martin County to get the state and federal governments to address problems like these — especially failing and polluted drinking water infrastructure. She’s also grown weary of failed promises; when money has flowed in, its effectiveness is often disrupted by financial mismanagement and sometimes local corruption. Perhaps most of all, McCoy said she often wonders why nobody saw all of these problems coming sooner. 

“Since 1981, we’ve been waiting for this to happen,” McCoy said. “What is wrong with leaders that haven’t tried to answer that question that was asked 40 years ago? It’s a lack of vision.”

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