HAZARD — Last week, the Hazard Herald published a report about the Perry County Fiscal Court’s special called meeting on July 29. The most discussed item on the meeting’s agenda was a resolution for the Fiscal Court to acquire a loan for $1.2 million from a local bank to pay debts, most of which have accumulated at the Kentucky River Regional Jail. The resolution passed by a 3 to 1 vote, meaning the Perry County Fiscal Court will go forward with obtaining the loan. District 1 Magistrate Keith Miller cast the solitary no vote, citing his wishes to see clearer language in the resolution, which defines how the loan money can be spent.
Judge Exec. Scott Alexander claims that the jail’s debt crisis developed prior to his inauguration in January of 2015. Alexander says the current administration has no choice in this situation other than taking out a loan because the IRS is prepared to penalize Perry County unless the jail’s debts are paid right away.
“The taxpayers are being punished,” Alexander told the Hazard Herald, “It’s very difficult to see this happen, but I can tell you it won’t happen again.”
The Hazard Herald received records from the Judge Executive’s Office, which show a year by year breakdown of the Kentucky River Regional Jail’s tax debt. According to these documents, for the years 2011 through 2014, the Kentucky River Regional Jail owes $508,485.23. The records reveal that the jail owed $166,578.16 for 2015 on Sept. 30 of that year. The overall total for tax money owed by the jail since 2011 equals $675,063.74, with the vast majority of that debt accumulating prior to 2015.
The Fiscal Court’s debts involve more than taxes at the jail. On Jan. 17, 2015, the Perry County Fiscal Court received a notice from Humana, indicating an over-due balance of $105,393.15 owed to the insurance company from 2014. In June of 2015, another insurance provider, KACo, also sent a past due bill for $200,419.44, accounting for a premium payment, which KACo expected to receive in November of 2014. A bill for $19,875.21 that was due in September of 2014 from the Transportation Cabinet is also included in the records from the Judge Executive’s Office. Everything combined, along with the jail’s tax payments, equals $1,000,751.54. This is an estimated total. Other charges, such as interest and late payment penalties, might also be added onto the overall amount owed. Plus, any debt acquired prior to 2011 by the jail could factor into the equation too.
Alexander proposes that yearly audits of the jail, as opposed to the current rate of auditing the jail every two or three years, could help prevent situations like this from happening in the future. Digital printouts that detail jail finances are another method of possible prevention mentioned by Alexander.
The Fiscal Court’s $1.2 million loan is projected to help Perry County avoid penalty from the IRS, which is buckling down on these past due payments. As is the case with any loan used to pay bills, the action involves trading one debt for another. The money will still be owed, with the exception that it will now be owed to the bank instead of the government.
Perry County faces immense budget strains at the beginning of another fiscal year. This is not the first loan received by the current administration over the past couple of years. However, Alexander claims that these measures are being taken because of actions that unfolded prior to his inauguration.
“It’s going to be hard,” Alexander said, “This is money we’d rather be spending on parks, and gravel, and roads. There’s going to be no more he said, she said. We’re just going to make sure that it doesn’t happen again.”
Sam Neace can be reached at 606-629-3243 or on Twitter @HazardHerald.