Imagine if you got behind on your credit card payments. A couple of months later, and the interest plus the original debt has gotten a bit out of hand.
No problem, you tell the Visa or Mastercard payment department. I’ll pay what I first owed now, as long as you forget the interest and late fees. How’s that?
Exactly. Now imagine that instead of just making a credit card company richer, your payments supported the day to day operations of cash-depleted schools and local governments of Eastern Kentucky, that they totaled millions and they’d been delinquent for years.
Well, travel down the rabbit hole to Knott, Pike, Harlan and Magoffin Counties, where companies tied to West Virginia Gov. Jim Justice just paid some of the millions in their late property taxes. Except without penalties or late fees.
As reported by Bill Estep and William Wright, state finance officials, who worked out the deal, said it was better to get some of the money now instead of none of it later. The Justice family, which owns about 100 companies, including the posh Greenbrier Resort in West Virginia, you see, has fallen on hard times because of coal’s downturn. Forbes estimates that Justice is worth about $1.5 billion. So Jay Justice, the governor’s son who now runs the businesses, has agreed to pay $2.4 million to those counties even thought the total bill is $3.6 million.
Jay Justice, the governor’s son, sees himself as the good guy in this situation. “This is a really positive thing,” he told the Herald-Leader’s Bill Estep. “We all know these counties desperately need these dollars.”
We also know that the state moved to suspend Justice-company mining permits before the two sides worked out the deal. Those suspensions have since been released.
Apparently, the state thinks it’s just fine for some businesses to skip out on a third of their bills.
“I am happy that we were able to bring much needed tax revenue to these counties whose budgets have been tightened because of decreasing coal severance revenues and other expenses,” Finance Secretary William M. Landrum III said in a news release. “This settlement means the state and these counties no longer have to spend time, money and other resources on lawsuits that could take many years with no guarantee that the taxes would be paid.”
Who could blame the counties? This was probably the best deal they were going to get.
Justice’s Lexington attorney, Richard Getty, said the Justices were like many coal operators hit by the huge market downturn. They’ve been able to pay taxes now due to an upswing in the metallurgical coal they mine in West Virginia. Getty said unlike numerous other coal companies, the Justices chose not to challenge their tax assessments or declare bankruptcy, killing miners’ jobs and pensions. In the next year, he said, Justice Companies will be paying an estimated $15 million in payroll taxes in Kentucky.
Frankly, Getty said, the Justices shouldn’t be compared to a regular guy who has to pay taxes on time. “The difference, the normal person doesn’t provide hundreds of thousands of dollars in severance and property taxes to help schools and other services,” he said. “It’s reality.”
How true. It’s reality in counties like Knott (median household income: $30,503), which has become so financially decimated it laid off 32 city employees and cut its program providing hot meals to senior citizens.
It’s been reality for a long time in places like Eastern Kentucky, so dependent on coal that some operators get to decide when to pay what.
“Most of us don’t get to choose which bills we pay and which ones we don’t,” noted Dee Davis, president of the Center for Rural Strategies in Whitesburg. “A big shot billionaire governor like Justice thinks it should be his prerogative, and whether some little school system in Kentucky is harmed by it is not really his top priority. If some guest at the Greenbrier decided to stiff Justice and tell him he’d pay when he felt like it, I imagine there would be a swift response, and the court system would step in. Here we’ve got a situation where big shots often get away with thumbing their nose at the system.”
Justice has a history, as documented by Forbes Magazine in an April article titled “The Deadbeat Billionaire: The Inside Story Of How West Virginia Gov. Jim Justice Ducks Taxes And Slow-Pays His Bills.” Justice’s overdue bills in Eastern Kentucky are just part of a a pattern across Appalachia, one that’s so firmly entrenched that we’re convinced that tax shirkers are our saviors. Instead of getting excoriated, Justice got elected. Maybe that’s the most depressing reality of all.
Linda Blackford writes columns and commentary for the Herald-Leader.