In a 68-page document released late last week, the pair said that the coal industry as a whole cost the state $19.8 million more than what it took in that year, once tax credits and subsidies are included in the final figures.
In the same year, according to the report entitled “The Impact of Coal on the Illinois State Budget”, tax incentives and grant programs for the coal industry cost $12.6 million.
Without factoring in coal-related revenues, Illinois’ coal industry expenditures were $66 million in the 2011 budget year.
Center for Tax and Budget Accountability official and report co-author Amanda Kass noted that, at the level that state lawmakers are subsidizing the state’s coal industry, “it’s really not paying off for the state budget or for state residents”
In fact, she said, thirteen out of Illinois' 102 counties produced about 35 million tons of coal in 2010, resulting in the employment of 3,481 miners, managers and upper-level staff.
The industry also supported another 7,826 jobs indirectly in the same year.
Combining those jobs together represents just 0.2% of the state's total employment, and coal mining and support activities made up 0.17% of the state’s private industry economic activity that year.
The report does note that the industry adds revenue to the state through taxes; Illinois totaled $2.1 million in tax revenue from the coal industry in fiscal year 2011.
However, she said, that revenue was just 0.01% of the total state-generated revenues for the general funds for Illinois.
Perhaps unsurprisingly, the Sierra Club, Prairie Rivers Network, Faith in Place and the Eco-Justice Collaborative all helped to commission the report and said that they were surprised at its findings.
“You have to wonder why in the world we as taxpayers would be giving money to companies that are engaged in activities that directly threaten our environment, and as this report shows, are costing us money,” Illinois Sierra Club Jack Darin said.
“People assume that because some people would work at a coal mine that it's on balance a good economic choice and we wanted to see whether or not that was true.
“What we found was it's really not.”
The authors went on in the report to describe its key recommendations on maximizing industry revenues, the first of which is the development of a state severance tax on coal that can then be distributed to local governments.
The method is already quite popular, and some form of it is already in place in 38 other US states.
“If Illinois had a severance tax in 2011, that would have brought in $100 million of new, additional revenue to the state,” Kass said, adding that Illinois should also do away with a sales tax exemption for mine-related purchases it implemented last year.
The groups also said that the state should establish a permanent mineral trust fund to protect against future declines in coal-related jobs and revenues.
The report also called for a detailed cost-benefit analysis of grant programs that support coal-related projects, along with greater transparency and oversight.
The report is available in its entirety at http://www.downstreamstrategies.com/documents/reports_publication/downstream-strategies_illinois_impact_of_coal_6-27-13.pdf.
