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Media: Press Release

Coal Tax Could Raise $100 Million For Texas

April 24, 2001

Contact:
Karen Hadden, 512-479-7744
SEED Coalition, Clean Air Coordinator

Money Could Be Used For Health Care,
Air and Water Clean Up, and Wildlife Protection

"Texas could be collecting almost $100 million a year if coal were to be taxed at the same rate as oil and gas," announced Karen Hadden, Clean Air Coordinator for the Sustainable Energy and Economic Development (SEED) Coalition.

Hadden was joined by Tom "Smitty" Smith, Director of Public Citizen's Texas Office, and Representative Lon Burnam, D-Fort Worth at a press conference at the Capitol today. A tax bill was presented by Rep. Burnam to a costumed "Mr. Coal Company," showing a total of $100 million owed for damages to health, air, water, and wildlife.

A new report by the SEED Coalition, Texas Coal: Potential Income Source for Government Funding, authored by Paul Robbins, was released by the groups. It examines taxes for coal in other states, and determines the income Texas could have if coal taxes were enacted.

"Texas is the country's largest user of coal, and the 5th largest coal producer. However, unlike oil and natural gas, there is no severance tax charged when coal is removed from the ground, or when it is sold," explained Hadden.

"Our state is getting a raw deal. We're missing out on a huge chunk of income and giving an unfair advantage to coal over oil and gas. The worst part is that coal is very polluting, up to ten times dirtier than oil and gas when used in generating electricity," continued Hadden.

"Giving a tax break to coal companies means dirtier air. At the same time, no tax money from coal is going to meet the health care needs of people living in polluted areas, No money is going to clean up our air or water, or to protect wildlife that is being harmed by pollutants from the burning of coal. For example, fish are now being contaminated by mercury from coal-burning power plants. It is unsafe to eat fish from eight lakes in Texas, and some fish along the entire Gulf Coast, due to mercury contamination."

If Texas were to apply to coal the very same tax that is used for natural gas, 7.5%, it would mean an income of $52.3 million in severance taxes. If the state also taxed coal brought into the state, another $46.4 million would be raised, bringing the total close to $100 million.

The report surveys the coal taxes used in other states, and finds that even higher tax rates are used elsewhere. Projections are made in the report based on today's rate of coal use, for taxes that could be gained over the next 14 years. The report finds that using the 7.5% Texas rate for oil and gas, $727 million could be raised in this time frame by severance taxes alone (excluding imported coal). With the West Virginia rate, in $731 million would be raised, and with the New Mexico rate, Texas would bring in $1.4 billion.

The report suggests that the taxes could be used as a way to offset environmental damage caused by mining and the burning of coal, and as a way to meet state budget needs.

Hadden concluded, "If other states have these coal taxes, why not Texas? If the oil and gas industry pay these taxes, why not the coal companies? We need the money more than ever in the current state economy. The state must stop giving coal industries a subsidy, while our children breathe dirty air from its use."

Texas Coal: Potential Income Source for Government Spending will be available online at www.seedcoalition.org.

 

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