Coal demand draining Illinois budget

July 2, 2013 | By Barbara Vergetis Lundin

The coal industry drained nearly $20 million from the Illinois state budget in subsidies and expenditures related to supporting the coal industry in Fiscal Year 2011, according to the latest research from the Center for Tax and Budget Accountability and Downstream Strategies.

Caption: Commonwealth Edison Stateline coal plant in Illinois. Credit: Wikimedia Commons/ Sequeira, Paul, Photographer (NARA record: 8464471)

"Coal mining and support activities play a relatively insignificant role in the Illinois economy, representing only 0.2 percent of private industry economic activity in 2010," said the Center's Amanda Kass. "The level that state lawmakers subsidize the coal industry in Illinois does not pay off for the state budget or for state residents."

Prairie Rivers Network, who commissioned the research along with the Sierra Club and Eco-Justice Collaborative, believes that Illinois state lawmakers need to redirect grants and tax breaks from the coal industry to sustainable energy development and job creation in the clean energy sector.

Demand for Illinois coal is rising with exports up five times since 2010.

"As the companies expand Illinois operations, the cost to the state associated with supporting and regulating the industry will grow as well, and these costs are significant, amounting to more than $66 million in Fiscal Year 2011," said Rory McIlmoil, former energy program manager at Downstream Strategies. "…the costs associated with the Illinois coal industry far exceed the revenues generated by coal-industry activity. This finding suggests that more should be done to maximize the revenues generated by the industry while at the same time reducing costs."

Illinois does not impose a severance tax on coal exports, meaning that Illinois pays for, but sees no local tax revenue from, the exports, McIlmoil explained.

"…coal costs us all. Coal exports from our state are on the rise yet little money comes into our state coffers," said Jack Darin Sierra Club Illinois chapter director. "Illinois subsidizes big polluters from the coal industry, while citizens pay the price for the impact of dirty coal on our health, the environment and accelerated climate change. Ending state subsidies and tax breaks for the Illinois coal industry will have a positive impact on the Illinois state budget as well as for the future of our families and environment."

For more:
- see the report

http://www.fierceenergy.com/story/coal-demand-draining-illinois-budget/2013-07-02