Tennessee Valley Authority, which pays Muhlenberg County annual funds instead of taxes on the Paradise Fossil Plant near Drakesboro, has announced it is cutting its payment to the county by $2.3 million in the coming fiscal year.
TVA has been shutting down the coal-fired units at Paradise, and shuttered the final coal unit in February.
County Judge-Executive Curtis McGehee said the amount TVA pays to the county has decreased over the years. For the fiscal year that ends June 30, TVA paid the county $2.8 million.
McGehee said county officials were informed May 14 by TVA officials that the agency would pay the county $500,000 in fiscal year 2020-21. The new fiscal year begins July 1.
The county’s total revenue in the next fiscal year, before the cut, was $13 million, McGehee said.
“It’s a blow to the county,” McGehee said. “We anticipated there would be a reduction,” he said, but “we’d hope it would not be this drastic.
“We are seeing the result of the coal industry being significantly reduced,” McGehee said.
County magistrates have not been able to meet to discuss the shortfall, but will take up the matter at their next meeting on May 28. McGehee said he has been in talks individually with magistrates.
The TVA funds, “went into our general budget as it was needed,” McGehee said. The reduction has also been discussed with elected department heads, he said.
“All of the departments will feel this,” he said. “It will be painful.”
The revenue loss will result in some jobs being eliminated from county offices, McGehee said.
“Not only will officeholders feel this, but the county will feel this,” he said. “I’m confident we will lose several positions. It’s going to be a detrimental blow to our economy.”
McGehee said officials will have to determine what steps to take. He said he has reached out to state and federal officials, as well as the Felix E. Martin Jr. Foundation, but he does not anticipate those actions can remedy the shortfall.
“Everyone has assured me they will do whatever they can,” he said. “But they are limited in what they can do.
“There may be ways (the Felix E. Martin Jr. Foundation) can help us, but we don’t expect them to help us with a budget crisis,” McGehee said.
At one time, McGehee said, TVA payments to the county were about $6 million annually. McGehee said he anticipates magistrates will “make big decisions on May 28.”
“It’s not what we wanted,” McGehee said. “We’ll deal with it the best we can.”
James Mayse, 270-691-7303, firstname.lastname@example.org, Twitter: @JamesMayse