We Pay the Price

We live in the “Saudi Arabia of Coal.” In fact, Illinois’ coal reserves contain more BTUs than the oil reserves of both Saudi Arabia and Kuwait. Yet, the impacts from the life-cycle of coal—including the mining, transporting, burning, and disposing of coal waste—are devastating to the state’s air, water, health and, surprisingly, the economy.

The coal industry in Illinois costs more than it contributes to the state’s economy according to a recent report by the Center for Tax and Budget Accountability (CTBA) and Downstream Strategies. Tax breaks and subsidies given to the Illinois coal industry drained nearly $20 million from the state budget in FY2011 according to “The Impact of Coal on the Illinois State Budget” report.

The state subsidizes the multi-million dollar coal industry, which is engaged in activities that costs us all. Meanwhile, Illinois lawmakers have spent countless hours considering deep cuts to essential services in the state’s budget like education.

We are all paying the price.

Air pollution from burning coal contributes to hospital admissions for asthma and respiratory problems and may lead to premature deaths. Mercury pollution from coal causes annual fish consumption warnings from the Illinois Department of Public Health, and new coal mines threaten our clean water supplies and damage beautiful farmland. Experts assert that mining coal accelerates the climate change that threatens our crops, our communities, and future generations.

Although the Illinois coal industry provides jobs and generates revenues, the report found that the coal industry accounts for a small portion of total employment for the state (0.2%). It also plays a relatively insignificant role in the Illinois economy, representing only 0.17% of private industry economic activity in 2010. The level that the state is subsidizing the coal industry is not paying off for the state budget or for residents.

We are all paying the price.

Ironically, the federal Clean Air Act Amendments of 1990 and improved technology have bolstered the coal production in Illinois in recent years as more power plants have installed systems for capturing emissions of sulfur dioxide, thereby allowing them to burn more high-sulfur coal.

Coal production and coal prices in Illinois are thus projected to increase significantly over the next 30 years. Should this occur, coal’s contribution to Illinois’ state and local budgets and economies will likely grow. However, as coal’s contributions grows, so will its costs. Coal companies, some with more than 600 mine permits violations on record, take advantage of these breaks while using damaging methods to mine high-sulfur coal and export it out of state.

We are all paying the price.

Authors of “The Impact of Coal on the Illinois State Budget” recommend a couple of policy changes to help shift the costs to revenues collected from the industry rather than being paid for by the public.

The first recommendation involves implementing a state severance tax on coal and distributing a portion of the revenues to local governments. The severance tax is a tax on extracting natural resources, such as oil, coal or natural gas. Thirty-eight states already have some type of severance tax. Secondly, the state could create a mineral trust fund to protect against future decline in jobs and revenues provided by the coal industry or to help with reclaiming abandoned coal mines.

The Illinois budget reflects and shapes our state’s priorities. As people of faith, we have a moral obligation to support the transition to a future with clean, sustainable energy. Given the findings of the report, realigning Illinois’ financial commitments to the coal industry will incentivize investment in the renewable and energy efficiency sectors. This transition will not only have a positive impact on Illinois’ state budget, it will also help to support the common good by protecting vital health and human services for our state’s most vulnerable residents. It’s a matter of stewardship and justice.

Stay tuned.

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