A few thoughts on the coal severance issue: I am setting aside the question of distributive justice, since (i.e., these communities deserve the money) because I think it is a bigger, tougher issue.

So, from a pure economic development standpoint: would the new revenue be used productively? I am skeptical given current governance conditions. From what I have seen in a few unnamed Inner Appalachian counties, a lot of this money disappears into lavish local salaries (particularly upsetting compared to overall conditions/general nepotism in local government), brand new facilities for otherwise failing institutions (the occasional courthouse/school far nicer than most in the Bluegrass or Greater Louisville), and generally silly amenities (more than a few Appalachian cities have heavily-staffed “community centers” and, conspicuously, no activity parks). My favorite: publicly funded road signs for what are effectively driveways (e.g. “Papaw’s Lane”).

Your related suggestions are spot-on and I would feel much more relaxed if the state implemented them prior to dedicating the revenue to coal-producing counties. Consolidating counties, state crackdown on local corruption and waste, expectations related to spending on education cultural amenities, etc. I would add a region-wide regulatory reform agency who could provide grants for cities looking to liberalize and offer region-wide one-stop-permitting and siting assistance for Lexington/Louisville/Cincinnati businesses interested in expanding into the region. Appalachia desperately needs cities, and places like Ashland, Pikeville, and Middlesboro keeping their junk, out-of-the-box 1980s Euclidian zoning ordinances means that whatever growth happens has to take a generally inefficient, exurban form.