Cumberland Times-News

February 8, 2014

Jobs saved

Coal tax credit gets another year’s lease on life

Cumberland Times-News

— Hundreds of Maryland coal mining employees will be breathing easier — at least for the coming year — now that the state’s coal tax credit appears to be safe.

It’s been an annual tussle in Annapolis as Gov. Martin O’Malley has sought to repeal the credit. But this year he did not include the tax repeal in his budget. Sen. George Edwards said that while it is still possible a senator or delegate could seek repeal of the tax, the chances of such an attempt succeeding are largely nil.

Calculating the credit is complicated but the basic principle is simple enough. Public service companies and a few other designated companies receive a $3-per-ton credit for purchasing Maryland-produced coal.

The credit cannot pay a company anything over its tax liability for the year; it can only apply up to the limit of the tax liability, according to a fiscal and policy note prepared by the Department of Legislative Services prepared in 2013 after a repeal bill was filed.

The tax credit is a big deal in far Western Maryland. As many as 400 people in Garrett County are employed in coal mining and mining directly employs 600 in the state.

The Maryland Coal Association estimates another 3,000 spin-off jobs rely on coal mining. According to the American Coal Foundation, more than $2 billion is pumped into the Maryland economy by the direct and indirect effects of coal production.

The tax credit has an expiration date of 2021. It would be a relief if when O’Malley leaves office the next governor simply decides to let the credit stand until its expiration.

Otherwise, local officials will have to continue the annual fight to protect the tax credit and the jobs that rely on its existence.