Bredesen backs fiftyfold increase in coal tax; impact may be higher electricity bills

NASHVILLE, TN – Democrat lawmakers in Nashville, backed by Gov. Phil Bredesen, are pushing for a fifty-fold increase in the state’s tax on coal mining at a time when people all across Tennessee and America are already struggling with soaring energy costs.

The Democrats want to increase the coal severance tax, which brought in $140,000 in 2007, to more than $7 million per year.

“Democrats like to complain about rising energy costs, but this tax increase will do nothing but make things worse,” said Bill Hobbs, communications director for the Tennessee Republican Party. “Increasing the coal severance tax won’t just contribute to higher electric rates, it also will hurt coal miners, coal mining companies who do business in the stat, and the workers at the barge companies that transport Tennessee coal to customers.”

Gov. Bredesen is quoted in press accounts saying he doesn’t want Tennessee to be “a cheap place to mine coal,” but if this tax becomes law it could drive coal mining companies out of the state by raising the per-ton cost of recovering coal too high, industry officials testified at a recent Senate tax subcommittee meeting.

“Gov. Bredesen may find coal mining distasteful, but for decades, coal mining has helped thousands of Tennessee families pay the bills,” Hobbs said. “It’s a vital part of the economy in some communities in East Tennessee. A tax increase that makes Tennessee less attractive to coal mining is going to further hammer an industry that has already seen tough times in Tennessee for the last two decades.”

“Democrats make promises of cheap energy and a pristine environment, promises that tickle the ears of Tennesseans, but only Republicans are working for real solutions to the problem of high energy costs,” said Robin Smith, Chairman of the Tennessee Republican Party.