The Pike County Fiscal Court approved a plan Tuesday to provide a break on the county’s occupational tax to a coal company whose mining operation is in danger of shutting down.
Two weeks ago, representatives of Alliance Coal approached the Pike County Fiscal Court saying the company’s Scotts Branch mining complex will likely shut down in early 2020 if new coal reserves are not tapped. As part of a plan to expand to new coal reserves, the company requested a break on the county’s occupational tax in order to apply for further tax incentives through the state. At Tuesday’s fiscal court meeting, the court approved a resolution to provide that break, which will cost the county about $80,000 per year, but will help keep hundreds of coal miners working for at least the next decade.
In the resolution approved Tuesday, the court committed to rebating the occupational tax funds collected from Alliance Coal employees at Scotts Branch back to the company itself. The resolution, and the action approved in it, was required to allow Alliance to apply for further tax incentives — up to 400 percent more than those approved by the Pike Fiscal Court — through the Kentucky Industrial Revitalization Act.
Officials said the effect of the loss of revenue in Pike County will be offset by the benefits of keeping hundreds of people employed.
The resolution approved unanimously by the court Tuesday does not exempt Scotts Branch employees from paying into the county’s occupational tax. That tax revenue, however, will be rebated back to Alliance Coal and escrowed for the capital investment in the mine expansion. Half of that total revenue will then be returned to Pike County by way of support to local fire departments.
That equates to Pike County losing only about half of the occupational tax revenue it would have collected from Scotts Branch employees.
The county will still continue to generate revenue from Scotts Branch through the 1-percent net profits tax. Those in Pike County government believe the fiscal court’s action was action in the best interest of the county and its residents.
The plan to expand the Scotts Branch operation is still subject to approval by the Alliance Coal board, which Assistant Pike County Attorney Kyle Deskins said could meet as early as this week.
[su_youtube url=”https://youtu.be/w0GV8EsVY6Q” height=”340″]
