Tue | Aug 22, 2017

West Virginia candidate for governor owes millions in taxes

Published:Monday | October 24, 2016 | 10:00 AM

HINDMAN, Kentucky. (AP):

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 recreation centre 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.

 

UNPAID TAX BILLS

 

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 $2-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 totalling $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."

 

BARRELS OF MONEY

 

In his defence, 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 emphasised his ability to pull off unthinkable economic development projects, pointing to his purchase and turnaround of the once-broke Greenbrier resort, a long-time playground in West Virginia for members of Congress and foreign dignitaries.