The year is young and still full of possibilities.
That makes today an ideal time to engage in a little thought experiment: What would it take to turn the coalfields around economically?
Last month in Richmond, two legislators from two different parties got into something of a verbal sparring match over the subject. “Coal is not going to save that region — we’re going to have to get involved,” said Sen. Richard Saslaw, D-Fairfax County, the Virginia Senate Democratic leader. State Sen. Bill Stanley, R-Franklin County, disputed the notion that coal was dead.
What a sad and tiresome exchange. Certain types of coal may, indeed, make a modest rebound. If the Trump administration pushes through its massive infrastructure spending plan, or can somehow revive more traditional forms of American manufacturing, then metallurgical coal (used to make steel) might make a comeback.
However, the notion that steam coal (used for generating power) is coming back is a fantasy. Companies make power-generation decision for decades at a time. Take the Celanese plant in Giles County, which spent $150 million to convert from coal-fired boilers to ones running on natural gas. Celanese is not going to suddenly tear out a $150 million investment and start over again. We’d all be better off if politicians checked their ideologies at the door and took a more dispassionate — and long-term — view of where the economy is headed. Those pushing the notion that coal might come back are peddling false hope.
Instead, let’s deal with Saslaw’s point that to turn around the economy of Virginia’s coal counties, “we’re going to have to get involved” — the “we” there being state government. It’s unclear what he’s got in mind, if anything. We’ve heard a lot of things before, so we’re naturally skeptical.
However, what if Saslaw was serious? What could state government really do?
The things that make economic development work are hardly secrets:
1. You need a 21st Century workforce — in some case that means a workforce with technical skills, in other cases that means educational levels.
2. You need the quality-of-life amenities in your communities that will attract (and keep) those workers.
3. You need the infrastructure — for some companies that means roads and rail sidings, for others that means broadband.
4. You need what used to be called “a good business climate” — favorable tax and regulatory policies.
5. You also need a place to put companies, which usually means land.
Of those five things, the last is the most difficult of all to change in the coalfields. You can’t move mountains (though you can shave off the top of them, if you want to deal with the repercussions). Before Dickenson County built a new high school recently, that rugged county had only two sites available for large-scale development. Now it just has one. There has been legislation pending in Congress to change the rules on reclaiming old mine sites, but it hasn’t gone anywhere. In any case, that’s a federal thing, not a state one.
So what could Richmond do on its own? Here are two big ideas. Mind you, these are not necessarily practical ideas. Instead, we present them in a pie-in-the-sky way to spur discussion. Both left and right have different ideas on how to spur the economy. Rather than debate them, why not adopt them all and take them to the max? For instance:
n Make community college free for any resident of the coal counties. The coal counties have some of the lowest levels of educational attainment in the state; this might help fix that. Free community college isn’t that outrageous a suggestion. Last year, Tennessee — not exactly a Marxist state — became the first in the country to offer free tuition to community college. Roanoke, Roanoke County, Salem, Botetourt County, Franklin County and Giles County all have programs that provide free tuition for qualifying students at their respective community colleges.
The philosophical basis is a simple recognition that a mere high school diploma is no longer sufficient for most jobs. Maybe the notion that free education only goes through 12th grade is simply outdated and needs to be adjusted upwards to reflect the new reality.
Would it be unfair to students in other parts of Virginia if their counterparts in the coalfields got a free education? Maybe. But the point here is to fix the fundamental problems of a region whose dominant economy is withering away — and turn it into a place that generates more tax revenue. One possible tweak: Make this offer apply to students in any county with similar economic problems. That would likely bring in some localities in Southside, too. If that seems too heavy a dose of liberal economics, then add in an equal dose of conservative economics, too:
n Eliminate or at least drastically reduce corporate taxes for any business in the coalfields. That ought to provide some incentive for companies to locate there. Yes, you’d need some provision to keep companies from creating shell operations there — the way a lot of companies are incorporated in Delaware, which has very favorable tax laws, even though their operations are really elsewhere. That’s a detail, though; this is just a concept to push the envelope of our thinking.
Ronald Reagan promoted designating low-tax “enterprise zones” as a way to draw jobs back to inner cities, with admittedly mixed results. This simply takes that notion to another level and positions it for a better outcome. Liberals uneasy at the prospect of such a big corporate tax break may want to remember that even Hillary Clinton promised eliminating the capital gains tax for long-term investments in the coalfields. She just never talked about it; instead she talked about putting coal miners out of work.
Wouldn’t a tax-free zone that’s six counties big distort the economy by providing incentives to locate in one part of the state and not another? Umm, well, that’s kind of the point — for the state government to do something, anything, to create incentives to invest in the coalfields to create a new economy there. A giant tax-free zone just employs conservative tools to accomplish that. A purely libertarian free market approach would just say to the coalfields: “Tough luck; you’re on your own, buddy.”