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Kentucky has decided against seeking a $73,000 tax refund from the Harlan County school system on behalf of a bankrupt coal company that owes other delinquent taxes in the county.
The state does not intend to pursue a refund from the school system to Revelation Energy unless ordered to do so by the court, according to a news release issued Tuesday from the state. Revelation and a sister company, Blackjewel, left hundreds of miners unemployed when they entered bankruptcy last month.
The company issued cold checks to the miners on June 28, and they still haven’t been fully compensated.
The Kentucky Department of Revenue notified the school system in March that Revelation Energy had made an overpayment of $73,611 to the school system through a utility tax.
The school system owed the money back to Revelation, but school officials balked at making the refund, in part because Revelation owes the school system a greater amount in delinquent property taxes than the amount of the refund.
“It didn’t make a lot of common sense” to have to refund the money with Revelation owing the school system, Superintendent Brent Roark said Tuesday.
Roark said he was glad the state decided not to pursue the refund unless a judge orders it.
“That’s what we were hoping for,” he said. “It’s a significant amount of money to us.”
Roark said the school system wanted the money to go to miners or local services if it had to be repaid, not the coal company.
The refund quickly became a political issue this week, with Democrats calling on the administration of Republican Gov. Matt Bevin to abandon pursuing the refund.
“Taking money away from rural public schools and handing it over to a company that won’t even pay its workers is beyond the pale,” Attorney General Andy Beshear said in a statement Tuesday. Beshear, a Democrat, is running against Bevin for governor.
The Department of Revenue was acting in line with current state law in seeking the refund.
State Sen. Johnny Ray Turner, a Democrat, announced Tuesday that he plans to pursue legislation to close a “loophole” on such refunds.