A former University of Kentucky trustee’s coal companies owe $2.3 million to a single Eastern Kentucky county that has struggled to fund basic services in recent years, including its sheriff’s office and water district.
James H. “Jim” Booth, who acts as president or director of more than 30 companies in Kentucky and was a member of the UK Board of Trustees until earlier this year, has overdue property tax bills in Martin County stemming from seven companies and dating as far back as 2015, according to records from the Martin County Clerk’s office.
The original property tax bills, which totaled $1.4 million, have ballooned with more than $937,000 of penalties and interest. If paid, the money would be distributed to the local school system, county government, library, health department and state government.
Booth’s unpaid company taxes bear a striking resemblance to those of West Virginia Gov. Jim Justice, whose coal companies accumulated more than $2.5 million of delinquent tax bills across Eastern Kentucky. Justice’s companies struck deals with counties and the state earlier this year to pay the taxes, provided that the governments waive penalties and interest.
Booth owes nearly the same amount to Martin County alone.
Of the taxing districts being shorted by Booth’s companies, Martin County Schools have lost the most.
Booth’s delinquent taxes would generate $555,170 for the local school system. The state would receive more than $315,000, and the county government is due more than $101,000. The library and extension office would each receive more than $70,000.
“There’s a lot of need there for those funds,” said state Rep. Chris Harris, D-Forest Hills, who represents Martin County and part of Pike County. “We were critical of the West Virginia governor for not paying his taxes, and Jim Booth is no different. If he owes the tax, he needs to pay it.”
Martin County is one of the poorest in the state and has made headlines in recent years for its failure to properly fund its sheriff’s office and water district.
The water district, which is primarily funded by ratepayers, has notoriously struggled to provide reliable service to its thousands of customers, regularly leaving some families without running water for days at a time.
In February, Sheriff John Kirk announced he would temporarily cease all law enforcement activities because of budgetary shortfalls. At the time, Kirk posted on his personal Facebook page that all Martin County residents should “lock your doors, load your guns and get a biting, barking dog.”
Kirk told the Herald-Leader this week that he has resumed law enforcement activities, but that his lone deputy took another job at a federal prison, and will leave the sheriff’s office Friday. For the next six months, until two new deputies complete their training, Kirk will serve the county alone.
“We’re just skimming by,” he said.
Sheriffs get much of their funding through fees they receive from collecting taxes and serving legal documents, but they often receive funding from county governments. Kirk’s office got $75,000 from the county to cover salaries for deputies during his last budget cycle . That amount was half of what his office received just two years ago.
“Everybody needs to pay their taxes. If you’ve got property tax, whether your income is $10,000 a year or $10 million a year, you need to pay your taxes,” Kirk said. “I realize that people fall on hard times, and it’s not just the big companies — a lot of regular homeowners fall on hard times, but ultimately we’re the ones who hurt for it.”
Martin County Magistrate Jared Goforth said the county doubled its occupational tax rate this year to help with its ongoing budgetary struggles and fund the county’s roughly $6 million budget.
“I know we could sure use the money,” Goforth said, referring to taxes owed by Booth’s companies. “As far as I’m concerned, I don’t care if it’s the pope, they ought to pay it.”
A self-made millionaire
His story is that of a self-made millionaire. A coal miner turned coal baron. A hero or a villain, depending on who you ask.
Born to a coal-mining family in Warfield, just across the Tug Fork river from West Virginia, Booth began working underground almost as soon as he was of age.
While attending college at Morehead State University — he graduated in 1971 — he would drive home on his days off to work in the mines of Wolf Creek.
He married his high school sweetheart, and, with the help of two business partners, began his own coal mining operation in 1975.
Even at his own mines, Booth said he continued working underground until the late-1980s, regularly putting in 12-hour days or longer. At his office in Inez, a picture hangs on the wall showing a young Jim Booth standing underground alongside his fellow miners.
He would go on to become one of the largest coal operators in Eastern Kentucky; chair the Martin County Economic Development Board and the Morehead State University Board of Trustees; serve as a member of the University of Pikeville Board of Trustees; chair the Kentucky Chamber of Commerce; and rake in scores of political points through generous donations to state and federal politicians.
It was in 1984, with President Ronald Reagan in office, that Booth said his coal business began to pick up. The success of his coal mines allowed him to diversify, which he did aggressively.
Booth’s business empire runs deep in Martin County: gas stations, an insurance company, a building supply company, tobacco stores. Even a cemetery.
Over the years, his coal companies and businesses have employed thousands of people across Eastern Kentucky and southern West Virginia.
“I appreciate everything these companies do, providing jobs and all that, but your taxes got to be paid” said Goforth, the Martin County magistrate. “I’m sure they could pay it easier than a lot of these people on fixed incomes.”
The profits from other businesses often flowed back into his coal enterprises, allowing him to weather some of the boom-and-bust cycles of mining, he said.
Of the more than 30 companies of which Booth acts as president or director, seven owe delinquent taxes to Martin County. All seven are tied to the coal industry, and each owes between $55,000 and $1.39 million to Martin County.
The companies have not paid a single penny on any of the delinquent bills, according to tax records.
“That’s a real shock to me, that all that money is owed by one person,” said Mickey McCoy, a member of the Martin County School Board.
“The common folk pay theirs,” McCoy said. “The long time chair of the Martin County Economic Development Board owing so much to our county and our school system is horribly ironic and a travesty of justice.”
Booth, a staunch Republican, blames the delinquent taxes almost entirely on President Barack Obama, whose administration, he said, cracked down on the enforcement of environmental regulations and dramatically increased production costs.
“It hasn’t necessarily been the demand that has affected us, or the price, as much as it has cost,” Booth said.
He hopes another term of President Donald Trump will bring those costs back down.
“We’re seeing less of that now,” Booth said. “The enforcement agencies still have the same laws, same inspectors, same rules, but they’re enforced with a different attitude. It’s more of, ‘If there’s a way, let me help you be safe,’ instead of saying, ‘Let me stop you from mining coal.’”
Multiple studies, though, contradict the idea that regulations are squarely to blame for the coal industry’s decline.
Even the Trump Administration, in a report published in 2017 by the Department of Energy, found that competition from natural gas was the main driver of coal’s decline. Other studies, including one from Columbia University’s Center on Global Energy Policy, have reached the same conclusions.
Regardless of why coal has become less profitable, Booth said his companies simply don’t have enough money to pay taxes and salaries.
“It’s either buy mine supplies or pay taxes,” he said. “Well, if you don’t buy mine supplies you can’t keep mining, so you’ve got to send your men home.”
“We would have already paid (the taxes) if we could, and we will pay them. We’ll pay them as fast as we can,” he said.
County attorneys can file suit against companies and individuals for delinquent property tax bills, but, according to Booth, the Martin County Attorney’s office has declined to take that route.
“Because we are paying some, that keeps them at bay.” he said. “They know what we’re able to pay. We work with them, we work closely with them.”
Martin County Attorney Melissa Phelps, who took office after the 2018 election, declined to comment on Booth’s delinquent bills “as it is not proper to comment on matters that could be subject to collection litigation.”
Multiple other county officials, including Martin County Judge-Executive William Davis, did not respond to multiple requests for comment for this story.
‘Not a legitimate excuse’
Harris, Martin County’s state representative, doesn’t buy the idea that coal’s decline has left Booth’s companies unable to pay their tax bills.
“That’s not a legitimate excuse,” Harris said. “Every miner that he has working for him, every employee, pays his fair share of taxes, and he should have to pay his as well. There needs to be enforcement action taken — every penny that is delinquent needs to be paid in full.”
Martin County, like many Eastern Kentucky counties, has historically had higher delinquency rates than elsewhere in the state.
According to data from the Kentucky Department of Revenue, the average statewide delinquency rate for property taxes in 2017, the most recent year available, was 1.48 percent. Martin County’s delinquency rate was 20.46 percent during the same year.
In 2017, nine Eastern Kentucky counties had delinquency rates on property taxes above 10 percent.
Booth, whose companies began accumulating delinquent bills in 2015, said he cannot get a loan to cover his delinquent taxes. Banks are no longer willing to bet on coal, he said.
Striking a deal similar to Justice, the West Virginia governor, remains an option, he said.
“You know, we’ll try that,” he said. “It’s possible that we get some relief.”
Floyd County refused Justice’s deal earlier this year and Magoffin County Clerk Renee Arnett Shepherd said at the time that it wasn’t right for wealthy businessmen to get a break when poor people are required to pay in full.
“That’s not right,” Shepherd said. “I don’t agree and I think it’s crazy.”
Asked whether the Kentucky Department of Revenue has taken action on Booth’s delinquent taxes, Glenn Waldrop, a spokesman for the department, said the collection of property taxes “is the responsibility of the local county sheriff and county attorney.”
“The Department of Revenue readily provides assistance when requested, as demonstrated earlier this year with several Eastern Kentucky counties,” Waldrop said, referring to Jim Justice’s delinquent property taxes.
Harris said he would not support allowing Booth to broker an agreement to waive penalties and interest.
“I can tell you that I’m not in favor of cutting deals with people to pay their taxes,” he said. “We all pay our taxes, and they need to pay their taxes. There shouldn’t be any favoritism of discounting any taxes that are owned. There shouldn’t be any of that whatsoever.”