Nov 24, 2013 7 min read

Examining property tax revenues from the mining industry in Greene and Washington counties might be called, with deference to Charles Dickens, “A Tale of Two Coalfields.”

Bradley Boni, Washington County chief assessor, said Friday, “Our coal revenues aren’t as significant as they appear to be in Greene County.” Coal is a much smaller wedge of Washington County’s revenue pie while coal is the dominant industry in Greene County.

Washington County’s total tax assessment for 2014, including both taxable and tax-exempt properties, is $1.8 billion. Of that, coal represents $34 million, or 1.89 percent of the billion grand total.

But the taxable value of property in Greene County increased by about 4 percent this year primarily as a result of a jump in the value of coal, which now makes up one-third of the county’s total assessed property valuation.

During the past year, coal’s taxable value increased by 12 percent, adding $54.2 million in value to the county’s tax rolls, according to end-of-the-year assessment values prepared by the Greene County assessment office.

Last year, the value of coal had declined by about 10 percent, resulting in a 3 percent drop in the county’s taxable value.

Changes in the county’s assessed value are often attributed to coal as coal values fluctuate year-to-year and new reserves are permitted and added to the tax rolls and old reserves are mined and removed.

Most counties see more consistent changes in value one year to the next, said John Frazier, chief assessor. Greene County is different. “We have coal,” he said. “And because of the way it is valued, it can change annually.”

From last November to this month, Greene County’s total taxable value increased from $1.529 billion to $1.593 billion.

Coal now makes up 33 percent of the county’s total property valuation. “When I started off it was about 50 percent, but that was 18 years ago,” Frazier said. “It’s been holding pretty steady at about 33 percent for the past few years.”

Though it may seem that the market for coal is down, coal’s assessed value has remained fairly steady.

Coal is assessed on an income approach to valuation, Frazier explained. The calculation to determine a per acre value takes into account factors including the price of coal on the open market, its quality and marketability, a mine’s productivity and interest rates.

“The value on nonmined acres of coal (in Washington County) was formulated at time of last reassessment 32 years ago,” Boni said, pointing out that this was before he was born.

Boni said his office receives an annual coal depletion report from Consol Energy, which operates Bailey and Enlow Fork mines in Washington County, in time for the county and municipalities to plan their budgets for the coming year.

The county applies a formula to the active mines to determine its taxability. Boni explained this as a total coal acreage after depletion multiplied by a dollar amount of value per acre. This equals an indicated market value of that coal tract. That number is multiplied by the certified common level ratio to arrive at an assessed value. The common level ratio is an average disparity between sales to assessment ratio in Washington County.

The coal at Enlow Fork Mine in East Finley Township is valued at $7.3 million while the West Finley Township part of the Bailey Mine has an assessed value of $944,890. “I’m sure each year before it’s been a slightly larger percentage,” Boni said.

According to Boni, the county lost $84,494 in annual tax revenue from coal while the McGuffey district lost $407,204.

Unlike Greene County, Washington County, in the reassessment that took effect in 1981, does not change the designation of coal reserve to active mining as the state approves mining permits. “This is not a factor here to date,” he said.

Boni said that determining the taxable value of coal, other than depletion, can only be done in conjunction with a reassessment, which the county has just undertaken at a cost of $6.9 million.

Both Bailey and Enlow Fork mines in Washington County are part of McGuffey School District, which, along with Washington School District, took the county to court more than five years ago to force the reassessment, and a reassessment of active coal mines will definitely have an impact on McGuffey.

Boni called the district “a massive land area that’s very very rural. There’s no Southpointe in McGuffey. It’s not like new developments are happening there every day.”

The selling price for coal has remained level and even increased a bit, Frazier said. At the same time, production at area mines has been fairly steady and interest rates have remained low.

Demand also has remained strong for Greene County coal, Frazier said. “It’s good quality, high BTU coal, relatively low in sulfur and ash and relatively easy and profitable to mine.”

During the past year, coal companies also have permitted new areas of coal they expect to mine relatively soon, changing the coal’s taxable status from reserve to active. Active coal is given a higher assessed value.

Municipalities where coal has been reclassified as active and where mining is occurring or expected to occur soon saw increases in value.

Center and Wayne townships, for example, saw large increases in value as a result of coal being mined by Alpha Natural Resources’ Cumberland Mine. Center Township also saw a large increase in the value for improvements primary as a result of a new portal constructed for the mine being added to the tax rolls, Frazier said.

Center Township’s total taxable value increased by $37.3 million. Of the increase, $34.3 million was attributed to an increase in coal values.

The additional revenue will be welcomed, township supervisor Seann McCollum said. The township’s taxable value has deceased in the last few years, so this year’s bump “will kind of in a sense help us catch up,” he said.

McCollum said the supervisors, while welcoming the change, also are aware that the increase in value is something that will be short lived. “Once the coal is mined and gone it (the township’s taxable value) will drop back down.”

On the other hand, municipalities in which coal has been mined and removed from the tax rolls or returned to reserve status saw decreases in value.

One township that saw a loss was Dunkard Township, where the Dana Mining Co.’s 4 West Mine has mined much of its reserves and has moved west into Perry Township. Dunkard Township saw a $639,390 drop in coal values this year.

The impact of that, however, has not yet been felt, said Michelle Hurley, township secretary. “It’s going to impact us a lot but with the Act 13 funds coming in it’s balanced out and helped fill in for the slight decrease,” she said.

Hurley said mining is expected to be completed in the township in late 2015 or early 2016, and that is probably when the impact will really be felt.

The municipality that lost the most in coal value was Franklin Township, where the value declined by $2.5 million as Emerald Mine began moving into Jefferson Township. A jump in improvement value in Franklin of $1.6 million helped lessen the loss.

Franklin Township supervisor Reed Kiger said the loss has not had much of an impact on the township budget. He, too, cited the new revenue from the Act 13 natural gas impact fee.

“We’re still way ahead of the game,” Kiger said.