Nov 26, 2002 By Steve Ostrosky/ 7 min read

As Central Greene School District business manager Walter Stout likes to say, all the district has to do to get a sense of where its tax base is headed is to keep watching the train cars filled with coal travel through Waynesburg every day. And while the district used the money it was able to accrue in its fund balance when coal was king to help balance its budget for five consecutive years, taxpayers have felt the sting of a 9.5-mill tax increase last year and a 6-mill increase this year.

“Expenses continue to increase, no matter how you try to control them,” he said. “Whether coal operators are in business or not, we still have to have school and we still have to pay teachers.”

School districts are perhaps the entity with the most to lose as the Greene County economy continues to depend less and less on coal as a source of tax revenue.

Districts in the eastern part of the county already are learning to educate students without coal revenue to help pay for salaries, programs and equipment, while districts like Central Greene and West Greene are learning from the past while girding themselves for what could be a very unstable financial future.

Stout said Central Greene felt the effects of the loss of $1.6 million in assessed value from coal depletion in 1996 after coal companies failed to turn in depletion reports for the previous four years, and he has watched as coal revenue has declined roughly 2 percent every year since.

“We got hit with four years of depletion all at once, and we didn’t know the extent of that depletion until we got those reports,” he said. “It was a pretty serious amount.”

Earlier this year, as the Greene County property reassessment entered its final few months, the district heard from Jeffrey Kern of Resource Technologies Inc., whom the county hired to help the assessment office arrive at fair market values for all of the coal operations and gas wells in the county.

His news for Central Greene was nothing Stout and others hadn’t heard before, but it still brought the reality of coal depletion home: The district will see a significant decline in revenue from coal within six years and will watch it disappear from the tax base altogether within 15 years.

For the most part, the district has been able to stave off the effects of depletion through development of surface properties to add to the tax base, but Stout said that ratio cannot hold up, as more and more coal is mined from the district annually.

The district was faced with hard choices – and continues to face them – as the coal continues to be mined. Stout said every year of the five years the district tapped into its fund balance, the money was used to balance the budget and not for any additional programs or expenses.

“At some point, something has to give,” he said. “We don’t know for sure how quickly that coal will be depleted and the board has not had to make any layoffs, but with the state mandating us to provide so much, something eventually is going to be lopped off.”

Stout, business manager at Central Greene for over 25 years, said he is hopeful the state will take some action on a funding plan for education, separate from the property tax, that increases the amount each district receives and lessens the local share.

He has heard the property tax issue raised throughout the 26 years he has been in the business; however, he said the issue is finally getting the attention it deserves, as more are affected by school funding and school districts rely more heavily on property taxes to make up for what the state will not provide.

“Twenty years ago, it was more senior citizens talking about it,” he said. “Today, it’s affecting everybody.”

Dilworth drained

Jefferson-Morgan School Board President Ellen Hildebrand is watching as Dilworth mine spends possibly its last year on the district’s tax rolls.

While the mine comprises only about 3 percent of the district’s total revenue, the roughly $300,000 that will be lost is nothing to ignore.

“It’s a significant impact, but it’s not the end of the world for us,” she said.

Over the past few years, Hildebrand said, the district has worked through under-spending and belt-tightening to build a $1.3 million reserve, which has allowed for projects like a renovation to the elementary school and construction of a new field house to happen.

But, she said more should have been done sooner to accumulate more funds while coal was a bigger revenue source, to keep less of the burden on taxpayers.

“It frustrates me that more wasn’t done to prepare for the business cycle,” she said. “If more was done then, we wouldn’t have to deal with neglected facilities now. We should have fixed these things when times were good, and we should have done it by taking the money from the coal industry.”

The district already has gone through the loss of coal, and the school board is faced with keeping the schools open and trying to maintain the tax rate. Hildebrand said new homes continue to go up and the effect of the countywide reassessment should be positive for Jefferson-Morgan, but that won’t mean a large revenue increase for the district.

She also has heard rumors that some deep coal in areas of the district may be mined at some point, but budgeting that money before miners are underground would be a mistake.

And, she also said that if the state didn’t rely on property taxes to fund education, she wouldn’t have to look at what the district has or doesn’t have, and it could better compete with schools in the region. Watching the choices that her counterparts in the western part of the county are faced with this year and years ahead, she said action must be taken.

“When you have to hurt education for economic reasons, those are not pleasant decisions,” Hildebrand said. “The money can only go so far, but the state Legislature is responsible for these issues.”

Districts throughout the county are working to control what expenses are in their realm of influence and hoping that those out of their control are within budget projections.

Hildebrand said state lawmakers have had no qualms about making other changes that have affected districts but are afraid to tackle property taxes.

“The state has dropped its subsidy and has passed other things on like making pension payments that are equivalent to Dilworth mine revenue,” she said. “If the funding formula was not based on property tax, there would not be problems in education. …We are there for education, not to raise taxes.”

Hildebrand, Stout and others are hopeful that the tax issue has gotten enough attention in recent months that all of the talk may finally turn to action. Hildebrand, who has lived in Jefferson-Morgan for 16 years, said changing the way education is funded can help Greene County schools remain competitive without asking the taxpayers to continually add more to the kitty.

“Education should be the top priority, and it is so important for districts to do long-term fiscal planning. With so much variability, it is important how that fund balance is spent,” she said.

“I don’t like to be in the position to choose between property taxes and children’s education. I hope the state acts,” she said.

Editor’s note: This story is the third in a three-part series examining the effects of the Dilworth mine shutdown and the future of the mining industry in Greene County.