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County budgets feeling the impact of the coal industry

Published On: Dec 24 2013 04:04:22 PM CST
Updated On: Nov 20 2013 06:00:00 PM CST

Several counties in Southwest Virginia are facing budget shortfalls this year and county administrators say much of the deficit is because of the coal industry.

WISE COUNTY, Va. -

Buchanan, Dickenson and Wise counties all rely heavily on coal production, but the budgets this year are already feeling the effects of a downturn in the coal industry.

You don't have to go far in Wise County to find someone concerned about coal. "People losing jobs weekly, mines shutting down and families being put in harder places than what they already are," says Southwest Virginia resident Glen Hill.

To see the effects on paper, we stopped by the office of Wise County Finance Administrator David Cox. "My forecast at this point, we'll be approximately at a total collection of $4 million, so half of that. $8 million, it'll be 50 percent of what we budgeted," he told us.

We're told the shortfall comes from drop in coal tax paid by coal companies based on production and price. Some places like Wise County budgeted for a drop in coal tax, but never expected the drop to be this severe.

To compare we got figures from Dickenson, Buchanan and Wise counties. Here's a breakdown:

Buchanan County: Budgeted $10 million, Down $6 million

Dickenson County: Budgeted $3 million, Down $2 million

Wise County: Budgeted $8 million, Down $6 million

So what happens next? Some places like Wise have enough in reserve funds to get through a tough year, but may have to look at cuts.

However, in Buchanan County, the county administrator says there are no reserve funds and the county would have to borrow money.

Wise County is hoping for a long-term solution by bringing in more industry and jobs. "We are focusing on economic development for Wise County. A development that's outside of coal. Several things such as EnviroCarbon," adds Cox. Click here to read more about EnviroCarbon.

But some residents are afraid it's going to be a while before it gets better. "It's going to get worse," adds Hill.

The numbers we got are all estimates; there is a chance as the fiscal year progresses the numbers will get better, but at this point counties seem to be bracing in case there's not much improvement.