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Editorial: Northam should send back the coal tax credit bill

Editorial: Northam should send back the coal tax credit bill

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Del. Sally Hudson, D-Charlottesville, recently tweeted:

retired: coal tax credits

admired: Tesla rebates

inspired: e-bike discounts

This isn’t the most tone-deaf tweet ever but it might be the most tone-deaf one issued by a legislator during the current Virginia General Assembly session. All those measures might be quite popular with Hudson’s constituents in Charlottesville and Albemarle County, but they won’t offer much hope — or help — to people in Southwest Virginia who are trying to figure out how to deal with a post-coal economy. Maybe they’re not her concern, but they should be. After all, Hudson sponsored the House bill to abolish those coal tax credits. What Southwest Virginia gets in return is a smug tweet and the promise of a study. From time to time Democrats wonder why they don’t do better in rural Virginia. News flash: This is one of the reasons why. Southwest Virginia doesn’t need e-bike discounts and, frankly, it doesn’t need another economic study, either.

What it needs is … well, what does it need? That’s a question The New York Times recently asked about West Virginia — which isn’t Southwest Virginia but does share a lot of the same economic and demographic challenges. The occasion is the 50-50 split in the U.S. Senate which means that the Democrats’ least liberal senator, Joe Manchin of West Virginia, is really in a position to decide what passes on a party line vote (with Vice President Kamala Harris breaking the tie) and what doesn’t. “West Virginia Has Everyone’s Attention,” the Times headlined. “What Does it Really Need?”

The New York Times may wonder what West Virginia needs, but Virginia doesn’t have to wonder what its southwest corner (or rural Virginia at large) needs — it only needs to figure out how to make them happen. Unfortunately, West Virginia is in a better position politically than Southwest Virginia is (or rural Virginia generally).

Make no mistake: The coal tax credit will be repealed and we’re not here to defend it. Both politics and economics are against it. The politics can be found in a Democratic-controlled legislature that wants to eliminate fossil fuels to save the planet; the economics can be found in last year’s report by the Joint Legislative Audit and Review Commission analysis that found coal tax credits cost the state a lot of money and haven’t done much to slow the long decline of coal in the face of cheaper forms of energy. If the state Senate were split like the U.S. Senate, perhaps a mythical Joe Manchin from Southwest Virginia might have been able to bargain for something in return. But it’s not.

It’s only through the good graces of a Democrat from Northern Virginia — state Sen. Jeremy McPike of Prince William County — that Southwest Virginia is being offered anything in return for abolishing the coal tax credit. McPike has two bills of note. One, co-sponsored with state Sen. Todd Pillion, R-Washington, would offer new tax incentives for data centers in locate in rural areas, which would help Southwest Virginia as well as other communities. McPike also has a budget amendment that would provide money for coal counties to offer satellite internet to students who don’t have any. His original proposal was $2 million, which got whittled down to $500,000 in the Senate version of the budget. We notice Hudson didn’t offer any kind of compensation to Southwest Virginia, which is why her celebratory tweet is particularly galling. Abolishing the coal tax credits may be good for the climate, they may be good for the state’s bottom line, but that abolition will help undermine what few coal jobs remain — and those jobs are generally pretty well-paying. The state’s Bureau of Labor Statistics show that the annual mean wage of mining roof bolters is $59,940 — which might not be a big deal in Hudson’s district (where the median household income in Albemarle is a cushy $75,394) but is in Dickenson County where the similar figure is $29,226. Hudson is willing to trade those for a report on the shelf.

Southwest Virginia doesn’t have much recourse in the legislature but it potentially has one in the governor’s office. When the coal tax credit abolition bill reaches his desk, Ralph Northam should send it back with amendments. So what should Northam insist on? At the very least, he should insist on state funding for the Virginia Coalfields Economic Development Authority. Some of those tax credits have gone toward funding the authority. Once they provided the authority with up to $3 million a year; now they’re down to about $900,000. All those legislators who virtuously voted to sunset the coal tax credits also just voted to defund the coalfields’ main economic development agency. Kick people when they’re down much?

When Northam was running for governor, he proposed turning the University of Virginia’s College at Wise into a research university — with that research dedicated to renewable energy. We thought that was a great idea: Universities are economic engines. Perhaps Northam’s idea would turn Wise County into the Oak Ridge, Tennessee, of renewable energy. Alas, we haven’t seen any action on that. Governor, here’s your chance to make good on that campaign promise. Between 2010 and 2018 the state spent $314.6 million on coal tax credits. Guess what? The budgets for UVa-Wise over those years add up to add up to about $366 million. We could have abolished the coal tax credit more than a decade ago and nearly doubled the state investment in that college. We might already have a growing research center there kicking off economic spin-offs.

We can’t undo the past but we can undo a future that’s not yet written. The state should take the amount it’s been spending on coal tax credits and devote that to economic development in the coal counties. Anything less than that effectively sends the message: Virginia doesn’t care about the coal counties. If Virginia had a Joe Manchin exercising the decisive vote in the state Senate, maybe Southwest Virginia could bargain forever more. What about enough funding to get every student in the coal counties online now through Starlink, not some distant promise of laying fiber after they’ve graduated?

For goodness sake, don’t let the trade-off be simply a study. We all know what happens to most them. Nothing. Or, hey, here’s a possible compromise: Virginia could that money it’s been spending on coal tax credits and use it to buy everyone in the coal counties an e-bike. That would be more in the spirit of what the General Assembly is currently doing.

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