ACLC NEWS: Coal Miners & Advocates Applaud Introduction of 10-Year Extension of Excise Tax for Black Lung Disability Trust Fund

APPALACHIA – Today,  Senators Joe Manchin (D-WV), Sherrod Brown (D-OH), Tim Kaine (D-VA), Bob Casey (D-PA) and Mark Warner (D-VA) introduced the Black Lung Benefits Disability Trust Fund Act of 2021 to extend the black lung excise tax for 10 years. The excise tax is the only source of revenue for the Black Lung Disability Trust Fund (BLDTF), a fund that is already over $4 billion in debt. The BLDTF pays for medical benefits and provides a small monthly living stipend to coal miners who are disabled by black lung disease and their surviving dependents in cases where the miners’ employer has gone bankrupt or not been found responsible. 

In 2018, the excise tax was reduced and collected at 50% of its historic rate for the entirety of 2019, pushing the BLDTF deeper into debt. In 2019 and 2020 the higher, historic rate of the excise tax was reinstated through one-year tax extender bills, but the rate will be cut in half again at the end of this year without action from Congress. This new bill extends the Black Lung Excise Tax on coal sales at the current tax rates for 10 years. A 10-year extension provides longer-term security for the fund and the miners who depend on it compared to short-term, one year extensions. 

“Giving us 10 years of the historically higher excise tax prevents us from having to fight every year. We don’t have to worry every year about how the fund will be paid or have to call in to make sure they pass an extension,” said Gary Hairston, President of the National Black Lung Association, based in Fayette Co., WV.  “We appreciate what Manchin has done, but we are waiting to see what more he is planning because if the fund falls into debt the taxpayers will have to pay it.”

The introduction of the 10-year extension comes after the House Ways and Means Committee passed a 4-year extension of the tax as part of its budget reconciliation bill. The 10-year extension more appropriately addresses the insolvency of the fund outlined in a May 2018 Government Accountability Office report, which indicated that the fund would not have sufficient revenue to cover beneficiary payments and administrative costs beginning in fiscal year 2020. The report found that increasing the tax rates by 25 percent would be necessary to eliminate the Trust Fund debt by fiscal year 2050. Solutions beyond an extension of the excise tax are becoming more and more critical as coal production declines. Revenues from the tax dropped by over 20% in fiscal year 2020 compared to revenues collected in 2018.

“We are grateful for the leadership of Senators Manchin, Brown, Kaine, Casey and Warner on this important issue. Without this bill, the rate of the black lung excise tax that provides revenues for the trust fund would reduce by 50% at the end of the year,” said Rebecca Shelton, the Director of Policy and Organizing, Appalachian Citizens’ Law Center. “We know that an extension of the excise tax isn’t the only measure that is needed to address the solvency of the fund, but it is an important first step and we look forward to working with all of these Senators to develop a long-term solution.” 

“It is crucial that Congress act before the end of the year to ensure long-term solvency of the Trust Fund by including this tax extension in the budget reconciliation bill. Coal miners across the country have sacrificed their health and their lives to power our nation for centuries; ensuring these health and disability benefits long-term must be a priority. This bill is a crucial step forward,” said Chelsea Barnes, Legislative Director of Appalachian Voices.

Background:

Rates of Black Lung disease have hit a 25-year high in Appalachian coal mining states, and have reached epidemic levels in coal communities across the nation. In addition, many miners diagnosed with the disease today are young and sicker than ever before. 

Coal miners and their widows who are able to prove that they are disabled from black lung are entitled by law to modest living and medical benefits, after what can be an excruciating legal process that sometimes outlasts the life of the miner. The Black Lung Disability Trust Fund pays for benefits to coal miners and their surviving dependents in cases where the miners’ employer has gone bankrupt or not been found responsible. 

The Trust Fund is more important now than ever because a wave of bankruptcies in the coal industry has created increased pressure. It is supported by a small excise tax paid by companies per ton of coal sold domestically, at a rate that was unchanged for more than three decades. Congress allowed the rate to be cut in half at the end of 2018 and reinstated it for one year at the end of 2019 and 2020.