Coal and Renewables in Central Appalachia: The Impact of Coal on the West Virginia State Budget

In this report, we examine the net impact of the coal industry on the West Virginia state budget by compiling data on and estimating both the tax revenues and the expenditures attributable to the industry for Fiscal Year 2009: July 1, 2008 through June 30, 2009. In calculating these estimates, there is an inherent degree of uncertainty associated with the results. We do not claim that our accounting of revenues and expenditures is precise; in fact, we round our estimates so as not to provide a false impression of precision.

Overall, when taking all revenues and expenditures into account, we estimate that the total net impact of the coal industry on the West Virginia state budget in Fiscal Year 2009 amounted to a net cost to the state of $97.5 million. Examining the impact of the industry and its employees alone, and not accounting for tax expenditures or the impacts of indirect employment, we estimate a net benefit to the state of $193.2 million. However, including tax expenditures and indirect employment is important for examining the true impact.

Finally, it is important to note that the impacts of coal extend beyond traditional accountings of revenues and expenditures. While the focus of this report is on the industry’s net impact on the state budget for a single year, legacy costs resulting from past and future coal industry activity must be considered. These are important both for their potential impact on the availability of funds for various and more beneficial priorities, and for their future impact on the local and state economies, on the environment, and on the health of West Virginia residents.