Two of the largest tax incentives in Virginia are about to end, although members of the General Assembly and the governor are divided about what to do with the money.
Six million dollars a year. That was supposed to be how much money would have gone to UVA’s College at Wise after discontinuing two coal tax credits that subsidized production and employment. Instead of going to mining companies, Governor Ralph Northam wanted the money to go toward new course offerings in renewable energy and data science.
But the House and Senate both rejected the governor's amendment. "It was disappointing to me, but we'll continue to do everything that we can to bring jobs to that area," Northam said in an interview.
Democrats who are now in control of the General Assembly say the governor can't dictate future budgets. Delegate Vivian Watts is chairwoman of the House Finance Committee, and she says language in the amendment outlining an "intent" to spend the money on UVA Wise wouldn't accomplish anything in the short term and may even be damaging in the long term. "Even if the amendment was passed, it would have absolutely no effect. The only thing that would be accomplished is to set bad precedent."
"Well that's their side of it," Northam says. He wants to plan for the future. "Education is a priority of mine, and I suspect it's a priority of the House and the Senate as well. So as we plan for revenue that's coming into Virginia we should at least have a dialogue of how we plan on spending it."
In the Senate, the governor's amendment was met with deep skepticism. Republican Senator Bill Stanley suggested the intention to spend money on UVA Wise would fade, and the region would fall victim to a bait and switch. He says the late Senator Ben Chafin championed the coal tax credits and worked to reform them to meet the changing needs of the region. "The moment he's gone, so are these tax credits with nothing more than a pat on the head to Southwest Virginia. Maybe you'll get some of that money later for UVA Wise. No we won't. You'll find another pet project for it. You'll find another way to send it to Northern Virginia because y'all don't care about Southwest Virginia. You don't!"
Northam says he does care about Southwest Virginia, adding that he's worked to upgrade Interstate 81 and bring passenger rail to Christiansburg and hopefully even all the way to Bristol. He says he's directed money to build new schools in the region and increase access to healthcare. "My intentions have been genuine, and I've delivered on what I had promised and to make comments like that on the floor that nobody cares about the Southwest are not constructive at all."
So now that the General Assembly has rejected the governor's amendment, the ball is back in the governor's court. He could sign the unamended version or just forget the whole thing and let the coal tax credits stand. "Oh I'll sign the unamended version," he admits.
Northam says that the coal tax credits have outlived their purpose, and they no longer protect jobs in the coal industry because of the shifting economic landscape. "I had hoped to get revenue into the University of Virginia Wise. That's actually a promise that I made during the debate out at the University of Virginia Wise. But I certainly understand the will of the General Assembly."
A recent report on the coal tax credits shows taxpayers spent about $300 million on the economic incentive over the last decade. Now lawmakers will decide if they want to spend that money on Southwest or some other priority.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
