General Government Local Government Economic Assistance Fund
Actual FY 2024Actual FY 2025Revised FY 2026Recommended FY 2027Recommended FY 2028
SOURCE OF FUNDS General Fund
Regular Appropriation35,214,20037,228,20031,983,90027,926,60025,211,700
Other3,081,257(5,071,204)(2,416,400)
Total General Fund38,295,45732,156,99629,567,50027,926,60025,211,700
TOTAL SOURCE OF FUNDS38,295,45732,156,99629,567,50027,926,60025,211,700
EXPENDITURES BY CLASS
Grants Loans Benefits38,295,45732,156,99629,567,50027,926,60025,211,700
TOTAL EXPENDITURES38,295,45732,156,99629,567,50027,926,60025,211,700
EXPENDITURES BY FUND SOURCE
General Fund38,295,45732,156,99629,567,50027,926,60025,211,700
TOTAL EXPENDITURES38,295,45732,156,99629,567,50027,926,60025,211,700
EXPENDITURES BY UNIT
County Coal Severance16,506,29912,950,0228,379,5007,905,1005,808,500
Cities Coal Severance1,828,1911,438,891931,100878,300645,400
County Mineral Severance18,008,01915,553,46418,231,20017,228,90016,882,000
Cities Mineral Severance1,952,9492,214,6192,025,7001,914,3001,875,800
TOTAL EXPENDITURES38,295,45732,156,99629,567,50027,926,60025,211,700
The Local Government Economic Assistance Fund (LGEAF) in KRS 42.450-42.495 is a revenue sharing program that was created by the 1980 Regular Session of the General Assembly to return a portion of the coal and minerals severance taxes to local governments in areas where the minerals were extracted. These funds are used by those communities to strengthen and "to improve the environment for new industry and to improve the quality of life of the residents." Counties that contain industries involved in the production of coal or minerals such as natural gas, oil, and stone and incorporated cities within those counties are eligible to receive LGEAF payments. Likewise, counties and their cities affected by the transportation of coal are eligible to receive a portion of the returned severance taxes.
The LGEAF program is funded from 50 percent of minerals taxes (oil, natural gas, and other minerals) and a share of coal severance tax receipts. The portion of the program funded from coal severance funds currently returns funds to an estimated 22 counties and 60 cities at the end of each fiscal quarter. While Kentucky statute directs that 15 percent of the coal severance tax receipts to the LGEAF, recent appropriation bills have authorized that 30 percent of coal severance tax receipts are transferred to the LGEAF to be distributed to local governments. Quarterly allocations are made to localities according to such criteria as population, income, the amount and distance coal is transported over local areas, and coal severance taxes collected from producers in the county.
The LGEAF minerals severance tax program currently returns funds to an estimated 99 counties and approximately 254 cities. Quarterly allocations are made to localities according to taxes collected from producers in the county.