NEW REPORT: Why West Virginia Needs the Black Lung Excise Tax

NEW REPORT: Why West Virginia Needs the Black Lung Excise Tax

CHARLESTON, WV – This morning, advocates for miners with black lung and their families released a new report outlining the critically important impacts of the black lung excise tax and the Black Lung Disability Trust Fund in West Virginia. The report comes days after the excise tax rate was slashed due to Congressional inaction, gutting funding for the Black Lung Disability Trust Fund that supports benefits for thousands of miners in West Virginia.

VIEW THE REPORT HERE 

“Now that the excise tax has fallen in half, we are worried about what the implications could be for the future of benefits including the possibility of jeopardizing the availability of benefits or impacting our healthcare one day. We plan on reminding Congress how important our benefits are to the state of West Virginia and miners reliant on these benefits and hope to see an extension passed soon.” Gary Hairston, President of the National Black Lung Association.

Among other findings, the new report concludes that 4,423 West Virginia mining families  currently receive federal black lung benefits. Because the excise tax rate was cut by more than half on January 1, the Trust Fund is now losing approximately $2.8 million every week. Instead of those contributions to the Trust Fund coming from a modest per-ton tax on coal companies’ domestic sales, the Trust Fund will have to increase borrowing from the general fund,paid by the taxpayers of the United States. The report indicates that if Congress does not act to extend the historic rate, the Trust Fund’s taxpayer-paid debt could skyrocket to over $15 billion by 2050.

“Thousands of coal miners and their families across the country rely on the Black Lung Disability Trust Fund to make ends meet. ” said Chelsea Barnes, Legislative Director from Appalachian Voices. “Restoring the tax rate to the 2021 level is absolutely vital to ensuring that these families have the benefits they were promised and access to the health care they need.”

Last month, Senator Joe Manchin announced he would not support the Build Back Better Act, legislation that contains a four-year extension of the Black Lung Excise Tax. Earlier in 2021, Senator Manchin introduced the Black Lung Benefits Disability Trust Fund Act of 2021 to extend the excise tax for 10 years, but that legislation has not advanced. Therefore, when the clock struck midnight on January 1 without Congressional action, the higher excise tax rate expired and the revenue from the tax was slashed.

“It’s truly unacceptable that the black lung excise tax was cut. An extension of the excise tax is a really small thing to ask for – we’re just asking for a continuation of the status quo. Senators and Representatives continue to pledge their support for miners and their families but those words aren’t realized through action often enough,” said Rebecca Shelton, Director of Policy and Organizing from the Appalachian Citizens Law Center.

Background:

Coal miners who are disabled from black lung, as well their surviving dependents, are entitled by law to modest living and medical benefits. The Black Lung Disability Trust Fund pays for these benefits in cases where the miners’ employer has gone bankrupt or where no coal company can be identified as responsible for the miner’s disease. 

The trust fund is more important now than ever because a wave of bankruptcies in the coal industry has created increased pressure on the program. 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: $0.55/ ton of surface mined coal, and $1.10/ ton of coal mined underground. 

In 2018, the excise tax was reduced and collected at less than 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. The Black Lung Disability Trust Fund Act would extend the Black Lung Excise Tax on coal sales at the current tax rates for 10 years. Meanwhile, the Build Back Better Bill that recently passed through the House of Representatives includes a 4-year extension to the tax. A 10-year extension provides longer-term security for the fund, and for the miners who depend on it compared to short-term, one year extensions.