The Pike County Fiscal Court must decide whether it will support the expansion of a local mining operation with a tax credit which could cost the county millions of dollars in tax revenue over the next 15 years.
At a meeting Tuesday, representatives from Alliance Coal asked the Pike Fiscal Court to approve a resolution in support of the company taking steps to expand its operation at Scotts Branch at Johns Creek in order to tap new coal reserves. Rusty Ashcraft, with Alliance, told the court the new reserves must be tapped or the operation will be forced to shut down within two years when its current coal reserves are exhausted.
Ashcraft said MC Mining and Excel Mining, which operate under the Alliance banner, hope to apply for a state tax credit that would allow a new mining operation to open up new coal reserves to feed Scotts Branch, and keep Scott’s Branch open for another 12 years or longer.
As part of its request for support, Alliance is also seeking a local tax credit, by way of the county’s 1-percent occupational tax, something which concerns county officials about the budget going forward.
During Tuesday’s meeting, Ashcraft said he anticipates payroll expenses for the proposed mining operation to be around $200 million over the 15-year life of the project. County officials were concerned after learning that the county could stand to lose more than $2 million in occupational tax revenue over the life of the project.
The court eventually tabled the issue and told Ashcraft they would revisit his request at a meeting early next week during which budget matters for the upcoming fiscal year are expected to be discussed.
Ashcraft told EKB News the tapping of the new coal reserves will keep Scotts Branch open, when it will otherwise close. The entire project, he said, is subject to approval by the Alliance Coal board.
He added that Alliance has numerous mining operations across the country with many mining companies competing to fill Alliance’s obligations.
Ashcraft said in exchange for the county’s assistance, Alliance would be willing to help fund local emergency response agencies.
The Scotts Branch operation has been operating since 1996.
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