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Coal companies controlled by a billionaire running for governor of West Virginia owe $3.5 million in delinquent property taxes in Eastern Kentucky, shortchanging schools and other public agencies at a time many are struggling...
The companies controlled by Jim Justice have delinquent taxes on mining equipment, land or coal reserves — or all three in some cases — in Pike, Floyd, Knott, Harlan, Magoffin and Breathitt counties, tax records show.
Jay Justice, the son of Jim Justice and an executive of a coal company controlled by his father, vowed that his father's companies ultimately will satisfy their tax debts.
"We will make good on all our obligations in Kentucky," Jay Justice said.
Jay Justice said he understood the companies have agreements in place to pay the back taxes.
That was true in some counties, but officials in Pike and Harlan counties said no such payment plans were in place as of Oct. 8.
In Pike County, a Justice subsidiary called Kentucky Fuel Corporation agreed to pay delinquent taxes after the Herald-Leader contacted a company official last December about the debt, which then totaled $527,000 with interest and penalties.
The company paid some smaller bills after that, but did not pay a large delinquent bill on equipment by the March deadline, according to County Attorney Howard Keith Hall's office. The payment agreement was canceled.
With interest and penalties, Kentucky Fuel now owes $620,000 on a delinquent 2013 bill in Pike County, plus $446,000 in delinquent 2014 property taxes, a total of just more than $1 million, according to records.
Property taxes are a key source of funding in Kentucky's counties for schools, local governments and services such as libraries and health departments.
For instance, the Pike County school system's share of the original 2013 tax bill on Kentucky Fuel's equipment would have been $136,000. That would cover the annual salary and benefits of more than two teachers, said Nancy Ratliff Grubb, the school district's finance director.
That's no small consideration in a school system that has had to cut staffing as enrollment declines.
"Anytime that you can fund a teacher, it's a big deal to us," Grubb said. "They should pay. It's the kids that are suffering."
In Knott County, a representative of Kentucky Fuel said the company would pay hundreds of thousands in delinquent taxes after the county sued early this year, said Randy G. Slone, assistant county attorney.
Kentucky Fuel made two of three payments — totaling more than $800,000 — but did not make the last payment, Slone said.
With the remaining balance on 2013 taxes and unpaid 2014 taxes, Kentucky Fuel's delinquent taxes in Knott County totaled $1.27 million the first week of October, local records show.
Jim Justice's companies are not alone in failing to pay their property taxes on time during a sharp downturn in the coal industry in Eastern Kentucky and Central Appalachia.
Hundreds of mines in the region have closed since 2011 because of a combination of factors, including competition from cheap natural gas; cheaper coal from other U.S. regions; tougher rules to protect air and water quality; and the depletion of thicker coal seams after more than a century of mining.
The U.S. Mine Safety and Health Administration lists Justice as the controller of 158 surface or underground mines and related facilities, such as coal-preparation plants, in several states. However, nearly all of Justice's mines are listed as temporarily idled, non-producing or abandoned.
Still, Justice — who has some of the largest delinquent tax bills among coal companies in Eastern Kentucky — has resources many coal operators do not.
When Jim Justice announced in May he would run for governor in 2016 as a Democrat, his estimated net worth was reportedly $1.6 billion, a fortune he amassed in coal mining, agriculture and timber.
He has been lauded for his support of youth sports programs, his millions in charitable contributions and for efforts to save The Greenbrier, an iconic West Virginia resort in danger of bankruptcy before Justice bought it for $20 million in 2009.
Justice has since spent tens of millions on the property, adding a casino, a medical institute, a football practice facility and other amenities. The resort hosts a PGA Tour golf tournament each year.
However, Justice also has faced lawsuits in Kentucky and other states from suppliers complaining of non-payment, and criticism over environmental violations and unpaid safety fines at his coal mines.
In August 2014, Justice acknowledged hundreds of reclamation violations at mines in Eastern Kentucky and agreed to post $10.6 million in bonds to fix the problems. That deal came after the state threatened to suspend his company's permits.
He also agreed to pay $1.5 million in fines. He owed $4.4 million, but the state dropped the total as part of the agreement.
Justice and his son pledged their personal assets to guarantee payment of the fines and reclamation work, state regulators said.
Dick Brown, spokesman for the state Energy and Environment Cabinet, said Justice has posted the required reclamation bonds and has paid $950,000 of the $1.5 million fine. Justice is current on his fine payments.
'We need the money'
Justice has made efforts to pay down his delinquent property tax debt in Kentucky and elsewhere, but it has taken prodding by local officials, and his companies are still millions behind.
Kentucky Fuel did not file a response after Knott County sued the company early this year in an effort to collect delinquent property taxes. A judge issued a default judgment in March in favor of the county for $1.2 million, which included taxes and other costs.
Slone, the assistant county attorney, said that after that, an attorney for Kentucky Fuel called him and they worked out an agreement for the company to settle the debt in three payments. The company made the first two, but not the third, according to a court record.
Slone filed a motion Sept. 15 asking a judge to order a forced sale of the company's assets in the county to settle the debt.
In a letter dated the next day, a Justice company official notified Knott County Clerk Ken Gayheart's office that Kentucky Fuel would pay $40,000 a week until its tax debt is settled.
The office has so far received three $40,000 checks, the most recent one on Oct. 5. At that pace, Kentucky Fuel would satisfy its delinquent taxes before next summer.
Slone said he hopes that happens, but is keeping a watchful eye. Justice's companies seem to have a pattern of not paying bills, he said.
"I'll have to see the money before I'll actually believe it," Slone said.
Companies controlled by Justice also owe delinquent taxes in West Virginia.
Martin West, the sheriff in McDowell County, W.Va., said Justice paid about $1 million in taxes after West threatened to sue, but still owes about $300,000 in delinquent taxes.
West said Justice called him, apparently to see if he was serious about pushing for collection.
"He said, 'I wish you could be a little more compassionate,'" West said.
The sheriff was not moved, noting that Justice reportedly gave out handfuls of cash at a golf tournament at The Greenbrier this year — enough to have made a big dent in what he owes McDowell County.
"We need the money to run this county," West said. "Jim Justice tries to get by with everything."
Some have questioned why Justice doesn't use money from other companies to pay the taxes for his coal properties. His campaign website says he is president and CEO of 47 companies.
However, Jay Justice said all the businesses are operated as separate entities. The plan is to have the coal companies stand on their own in paying their taxes, he said.
The companies have significant tax debts, he said, because of the "really tough situation" in the coal industry.
He noted that unlike many companies, some Justice-controlled coal operations are still running and providing jobs.
Jay Justice said Kentucky Fuel has one mine operating in Kentucky — the Beech Creek surface mine in Pike County — and plans to resume production at the Bevins Branch surface mine in the county around the end of the year.
'Track them down'
Having a payment agreement in place, as Justice said he believed was the case in all the Kentucky counties where his father's companies owe delinquent taxes, protects a taxpayer from having the delinquent bill sold to a third-party investor. Such a sale would bring even higher costs to ultimately settle the debt.
Local officials confirmed Kentucky Fuel is under payment agreements in some counties, but not all.
In Magoffin County, for instance, assistant county attorney Travis Joseph said Kentucky Fuel made a payment of nearly $100,000 earlier this year on delinquent taxes, then signed an agreement a few weeks ago to pay off its remaining delinquent 2013 and 2014 taxes.
"We had to track them down," Joseph said.
The company owes $183,372, according to county Clerk Renee Arnett-Shepherd.
Joseph said Kentucky Fuel is due to send its first check under the payment agreement this month.
Records in Floyd County show that many delinquent Kentucky Fuel bills on real estate, some dating to 2011, are under a payment plan as well.
However, county Clerk Chris D. Waugh's office said the company does not have a payment agreement covering its delinquent 2014 tax bills on unmined coal, which total more than $160,000.
Altogether, the company owes more than $500,000 in delinquent taxes in the county.
The office of Hall, the Pike County attorney, said Kentucky Fuel has no payment plan in place with the office for its delinquent taxes.
And in Harlan County, three Justice-controlled companies do not have payment agreements in place to satisfy their delinquent taxes, said Denise Williams, who handles those plans in the office of county Attorney Fred Busroe.
Sequoia Energy, Virginia Fuel and Infinity Energy owe a total of more than $450,000 in delinquent 2013 and 2014 property taxes, according to local records.
Williams said that beginning last December, she worked with Justice corporate officials for months in an effort to set up a payment plan on the coal companies' delinquent taxes. She made changes as they requested and sent new versions.
She couldn't get responses at times, however, and the contacts she was dealing with kept changing, Williams said.
Justice's corporation finally signed an agreement in April that called for an initial payment of $70,000 in May.
It didn't come, Williams said.
"Maybe they're waiting for next May," she said.
By Bill Estep
OCTOBER 5, 2015
Public is invited to meet Republican gubernatorial nominee during rally at Louisa Mini Park
LOUISA- Matt Bevin, the Republican nominee for Kentucky Governor, will visit Lawrence County on Thursday, October 15. The public is invited to attend a free rally from 4 p.m. until 6 p.m. at the Louisa Mini Park (across the railroad tracks from the public library). There is no cost to attend the event which will feature gospel singing, inflatables for kids and free hot dogs.
Bevin has campaigned hard in Eastern Kentucky as a pro-coal, pro-life, pro-gun candidate who has been very critical of President Barack Obama’s administration in Washington, DC.
Bevin carried Lawrence County in the May Republican primary and hopes to do so again with votes from Democrats, Republicans and Independents in the November general election.
“This election is not about party registration, it’s about sending the right man to Frankfort to be our governor. Matt will look that Obama bunch in Washington straight in the eye and say ‘I’m not going to let you keep sticking it to us,’” said Lawrence County Attorney Mike Hogan, who is supporting Bevin for governor.
“I’ve gotten to know Matt very well over the past year and I’ve been impressed from day one,” Hogan said.
“Like me, Matt’s a U.S. Army veteran, he’s a conservative and he’s not afraid to call it like it is—he’s exactly the man we need as governor and we need to carry Lawrence County big for him,” continued Hogan.
The general election for governor and other statewide constitutional office is Tuesday, November 3rd.
More than 1,000 retired coal miners and supporters from Kentucky and surrounding states came together in Madisonville to support legislation that could protect workers' health care and pension benefits.
The United Mine Workers of America held the rally Monday at the Ballard Convention Center as part of the union's effort to push ongoing legislation forward.
Through the proposed Miners' Protection Act of 2015 and Coal Healthcare and Pension Protection Act of 2015, which were introduced in the U.S. House and Senate respectively this year, the Surface Mining Control and Reclamation Act of 1977 will be amended.
This would transfer funds from the Abandoned Mine Reclamation Fund to the Multiemployer Health Benefit Plan to pay health benefits to retired miners, according to the U.S. Congressional website.
Under both acts, workers who are now enrolled in the plan will continue receiving benefits, and retirees who would otherwise be denied benefits if their former employer declares bankruptcy, will now be protected.
UMWA International Secretary-Treasurer Dan Kane told the crowd the legislation was only a matter of ensuring that coal companies keep their promises to laborers.
"(In World War II) The American soldier was supplied better than anybody else on Earth and that was done by American industrial might," Kane said. "We mined the coal that made the steel, ships, guns and bombs and if it were not for that effort, this world would be living under tyranny today.
"When we (won the war) we were promised in the White House that if we supplied the energy that this country needed," he continued, "if we work in the mines and gave our youth and health to the coal companies, we would get health care and pensions for life — from cradle to the grave. This is not an entitlement. We are not asking for a handout. We are saying that we fulfilled our part of the bargain and now it's time for you to pay your bills."
Yet, declaring bankruptcy should not absolve a company of its obligation to its workforce, Kane said.
"We have the 14th (Constitutional) Amendment and that guarantees us equal treatment under the law," he said. "How is it equal that a company can walk away from its bills, declare bankruptcy and who gets paid? The lawyers and the people at the top — the workers don't get paid. That's not equal treatment under the law and we're not going to stand for it."
Michael Pape, former district director for Rep. Ed Whitfield, told supporters that they must fight for survival as former miners in a fledgling industry.
"My father and grandfather were coal miners … they knew what hard work is," he said. "Those men taught me a valuable lesson when I was growing up. When you shake someone's hand and say you're going to do something, that's your bond. That's your word.
"In your case, it was written down on paper," he continued. "But I will say this — bankruptcy should never be a safe-clause for moral obligation."
According to UMWA President Cecil E. Roberts, passing legislation as quickly as possible is critical to the health of the retired.
"Right this minute, right now, there are people in hospitals across Kentucky, West Virginia, Alabama, Indiana, Illinois, Pennsylvania and Virginia in emergency rooms," Roberts said. "They're on the operating table right now. People are in hospice and they're dying and taking their last breaths.
"We're not asking for anything that doesn't belong to us," he added. "This belongs to us. For those of us who mined coal 50 years ago, when did we ever ratify a collective bargaining agreement?"
For the price of American coal producing the cheapest electricity in the world, 105,000 miners have died on the job and 100,000 eventually succumbed to black lung disease, Roberts said.
"We sacrificed our brothers and sisters so America could be great," he said. "We came to this room today earning what we asked for. We earned the right to petition our government to protect our pensions and health care, and we will win this fight."
Kane said he was optimistic the bills will be passed.
"We've talked to some representatives and a bunch of people in Congress have stood up for us," he said. "Together there is nothing we can't accomplish. We'll get this legislation passed because its the right thing to do, and this is the most financially responsible way of doing it."
By Laura Buchanan
The Messenger, Madisonville
While there’s plenty of theater surrounding the state’s gubernatorial race — both fact and fiction — the Kentucky Retirement System’s unfunded liabilities aren’t a fictitious problem and the Kentucky Government Retirees advocacy group has asked the current governor to shine a spotlight on the system’s processes and include them in the search for a new director.
In a letter addressed to Gov. Steve Beshear and a call to action to the KRS chairman Thomas Elliott, the Kentucky Government Retirees have asked they have not only have a place at the table during the search for a new director, but also at the KRS board meetings.
The next governor will have to find a fiscal solution to funding one of the worst-funded pension systems in the nation with a $9 billion shortfall and assets that could only cover 21 percent of its liabilities in the KRS non-hazardous pension fund in the years ahead.
According to a recent audit the fund could reach insolvency in the next 20 years. In the last fiscal year, the fund paid out $930 million in benefits to its members.
On Saturday, co-founder Jim Carroll sent the letter on the group’s behalf requesting Beshear review the “repressive stakeholder engagement policies” of KRS saying stakeholders have not been involved in the search for a new director, those meetings have taken place at a law firm in Louisville.
The group’s call to action, sent to Elliott last Wednesday, includes a request that consultant EFL Associates and the search committee have a public meeting in Frankfort where retirees can voice their concerns.
According to Carroll, members contacted Elliott and haven’t received a response. Similarly, a member of the group requested to speak at the board’s meeting in April but was denied as part of its “sit down and shut up” policy.
“I don’t know of any (state) agency that doesn’t allow the public the opportunity to speak at its meetings,” Carroll said. “It’s absurd. It’s typical that other state pension plans have a public comment period including the largest plan in the nation — California.
“You wouldn’t expect otherwise. Why would KRS be the exception? What justification do they have making themselves an exception on this issue?”
Retirees participated in an online survey in regards to the search for a new executive director, but it lacked one key point, Carroll said.
“The one issue we felt was important was not dealt with on survey,” Carroll said. “No where on the survey did it say that the next executive director should be an advocate for the fund. We felt that was a core characteristic that we would like to see.”
Current KRS Executive Director Bill Thielen said the board is aware of the requests (allow public comment at meetings and request for a public meeting) in the letter and will determine in due course how to deal with it.
By Brad Bowman
The State Journal
Kentucky Press News Service
The Kentucky State Police is now taking applications for its 94th Academy Class. Interested applicants should visit the KSP website at http://www.kentuckystatepolice.org/career.html
Information available on the website includes an outline of the application process, a list of minimum requirements and disqualifications, a downloadable application form with a list of supporting documents required, a downloadable study guide for the written test, physical standards requirements and a list of testing dates, times and locations.
KSP will offer the written test regionally beginning on Oct. 8 through Dec. 30 at several locations. All application materials must be completed and returned to the KSP Recruitment Branch at 919 Versailles Road, Frankfort, KY 40601 no later than Dec. 21 by the close of business.
Thursday, Oct. 8, 6 p.m. EDT– Pikeville, KY
University of Pikeville
147 Sycamore Street
Application Deadline: Monday, Oct. 5
Thursday, Oct. 15, 6 p.m. CDT– Murray, KY
Murray State University
1375 Chesnut Street
Application Deadline: Monday, Oct. 12
Thursday, Oct. 22, 6 p.m. CDT– Bowling Green, KY
Warren East High School
6867 Louisville Road
Bowling Green, Kentucky
Application Deadline: Monday, Oct. 19
Thursday, Oct. 29, 6 p.m. EDT– Barbourville, KY
310 College Street
Application Deadline: Monday, Oct. 26
Thursday, Nov. 19, 1 p.m. EST– Frankfort, KY
Kentucky State Police Headquarters
919 Versailles Road
Frankfort, KY 40601
Application Deadline: Monday, Nov. 16
Monday, Dec. 28, 9 a.m. EST– Richmond, KY
Eastern Kentucky University
Richmond, KY 40475
Application Deadline: Monday, Dec. 21st
Tuesday, Dec. 29, 9 a.m. EST– Richmond, KY
Eastern Kentucky University
Richmond, KY 40475
Application Deadline: Monday, Dec. 21st
Wednesday, Dec. 30, 9 a.m. EST– Richmond, KY
Eastern Kentucky University
Richmond, KY 40475
Application Deadline: Monday, Dec. 21
If more information is needed after visiting the website, applicants can call toll-free to (866) 360-3165 during office hours from 8 a.m. - 4:30 p.m. (ET) Monday through Friday or leave a message any other time.