Cumberland Times-News

January 10, 2013

Job-killer

Ending coal tax credit would hurt mine industry


Cumberland Times-News

— Gov. Martin O’Malley repeatedly touts job creation for Maryland. Our hope is he will consider the negative impact on jobs that would likely occur should the state’s coal tax credit disappear.

This will be the third year that the state has attempted to get rid of the tax credit. Fortunately, the legislation got bottled up in the House of Delegates last year and failed to make its way to the governor's desk.

Public service companies and a few other designated firms receive a $3-per-ton credit for purchasing coal that is mined in Maryland. The credit cannot pay a company anything over its liability for the year; it can only apply up to the limit of the tax liability. The public service providers then rebate part of their savings back to coal companies based on their contracts with the companies.

For Allegany and Garrett counties, the tax credit is a big deal. Sixteen mines are in operation in the state, and Maryland stands 30th among the states in coal use.

The state’s mining industry employs 600 people directly in the state and creates another 3,000 spin-off jobs, according to Adrienne Ottaviani, executive director of the Maryland Coal Association.

The state has the tax credit in its crosshairs because of the amount of revenue at stake.

The bill’s fiscal policy note states that the Maryland general fund would increase by $4.5 million in fiscal 2013 if the coal tax credit is repealed. The tax credit is supposed to run through fiscal 2021 and between that year and this one, $34.5 million in tax credits would be given out.

But helping out the state’s coffers would come at a steep price to the local economy and local workers. Is it really worth jeopardizing a high number of jobs at a time when Western Maryland’s economy continues to be on near life-support?

This year’s version of the coal tax credit repeal is contained in House Bill 11, pre-filed by Delegate Herb McMillan of Anne Arundel County.

The local delegation in Annapolis has vigorously opposed the coal tax credit repeal for two straight years. It will speak out against the repeal again this year.

Mining employees and firms should add their opposition to the legislation and let members of the General Assembly know about the consequences should the bill become law.