Gu­ber­na­to­rial can­di­date owes mil­lions in taxes

Daily Freeman (Kingston, NY) - - FRONT PAGE - By Dy­lan Lo­van and Jonathan Mat­tise

Jim Jus­tice, a coal bil­lion­aire run­ning for West Vir­ginia gover­nor, owes mil­lions in back taxes.

Jim Jus­tice, a coal bil­lion­aire run­ning for West Vir­ginia gover­nor, owes mil­lions in back taxes to some of Ap­palachia’s most im­pov­er­ished coun­ties, in­clud­ing one in Ken­tucky that is strug­gling to pay the debt on a new rec cen­ter and has turned the lights off in its parks and re­duced hot meals for se­nior cit­i­zens.

Many of these coun­ties have been dev­as­tated by the col­lapse of the coal in­dus­try over the past few years, and their fi­nan­cial strug­gles are not all Jus­tice’s fault. But county of­fi­cials say things would be a lot eas­ier if he paid up.

“It’s just ab­surd that a bil­lion­aire wouldn’t pay his taxes,” fel­low Demo­crat Zach Wein­berg, the top elected of­fi­cial in Ken­tucky’s Knott County, said as he thumbed through a folder of Jus­tice’s debts.

Jus­tice, who is lead­ing in the polls, makes no apolo­gies for the debt owed by some of his coal com­pa­nies, say­ing he is do­ing ev­ery­thing he can to keep his busi­nesses run­ning and work­ers em­ployed while other com­pa­nies go un­der.

One of the big­gest chunks of money owed is in Knott County, where Jus­tice has un­paid taxes of $2.3 mil­lion dat­ing to tax year 2014. That’s a sub­stan­tial hole, given the county gov­ern­ment’s $10 mil­lion bud­get and its sep­a­rate $23 mil­lion school bud­get.

Jus­tice has other un­paid tax bills scat­tered across the hills and hol­lows of east­ern Ken­tucky: $1.2 mil­lion in Pike County, $500,000 in Floyd County, $228,300 in Magof­fin County and $167,600 in Har­lan County, ac­cord­ing to county of­fi­cials.

He also has mil­lions in West Vir­ginia state tax liens against his com­pa­nies. Be­cause of pri­vacy laws, the state won’t say whether he is pay­ing them back.

The As­so­ci­ated Press has re­ported pre­vi­ously on Jus­tice’s debts to coal sup­pli­ers and con­trac­tors, and a re­cent Na­tional Pub­lic Ra­dio re­port com­piled a list of Jus­tice com­pany debts, in­clud­ing back taxes and mine safety fines to­tal­ing $15 mil­lion.

At the same time, Jus­tice — the rich­est man in West Vir­ginia, with a for­tune es­ti­mated at $1.56 bil­lion by Forbes mag­a­zine and a pro­fu­sion of coal and agri­cul­tural in­ter­ests — has spent al­most $2.6 mil­lion of his own money on his cam­paign.

His op­po­nent, Repub­li­can Bill Cole, has made an is­sue of Jus­tice’s bills, say­ing the busi­ness­man is putting coun­ties at risk. “They don’t need the money in a year or two years from now,” Cole said dur­ing a re­cent de­bate. “They need it right now.”

In his de­fense, Jus­tice cites the down­turn in the coal in­dus­try and the com­plex­ity of the 102 busi­nesses he is jug­gling. He doesn’t have “bar­rels of money” sit­ting around, he said, and his com­pa­nies have paid over $70 mil­lion in taxes an­nu­ally over the last four years.

Jus­tice has cast his ef­forts to keep his mines open in heroic terms.

“I didn’t de­clare bank­ruptcy, did I?” he said when asked about his un­paid debts at the de­bate. “You saw every great coal com­pany in the world belly up. They stiffed ev­ery­body. I just kept dig­ging. It’s tough. It’s re­ally tough at times. But we didn’t give up.”

He added: “If we would have given up, what would have hap­pened? Those good peo­ple, men and women that were work­ing, they would have gone home, they wouldn’t have had their jobs. And I won’t feel bad for a se­cond for try­ing to keep those peo­ple in their jobs.”

Jus­tice’s cam­paign has also em­pha­sized his abil­ity to pull off un­think­able eco­nomic de­vel­op­ment projects, point­ing to his pur­chase and turn­around of the once-broke Green­brier re­sort, a long­time play­ground in West Vir­ginia for mem­bers of Congress and for­eign dig­ni­taries.

As re­cently as five years ago, Knott County had about 1,000 min­ers pro­duc­ing some 5 mil­lion tons of coal a year and could count on $8 mil­lion to $9 mil­lion a year in min­ing-re­lated taxes. In those heady times, the county built a 66,000-square-foot sports and ac­tiv­ity cen­ter on top of a former mine.

Now, the county doesn’t have a sin­gle work­ing mine, un­em­ploy­ment is around 10 per­cent — or more than twice the na­tional av­er­age — the min­ing tax rev­enue is down to just a few hun­dred thou­sand dol­lars a year, and the county still owes $6 mil­lion on the sport­splex.

“We’re try­ing to do ev­ery­thing we can to keep the doors open, to pro­vide ser­vices to keep the roads up, to keep the jail go­ing, to keep the dogs off the road, and we just re­ally don’t have money to do it,” said Wein­berg, the county’s judge ex­ec­u­tive.

DY­LAN LO­VAN — AS­SO­CI­ATED PRESS

A photo taken in Au­gust shows Knott County Judge ex­ec­u­tive Zach Wein­berg look­ing through a file full of debts from a coal com­pany owned by Jim Jus­tice in Hindman, Ky.

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