Coal Tax Credit Phasing Out Bill May Impact VCEDA Local News

0

LEBANON – While a proposed legislative change to phase out Virginia’s coal tax credits could benefit a college in Southwest Virginia, another long-standing regional agency is waiting to see the full impact on his income.

Jonathan Belcher, executive director of the Virginia Coalfield Economic Development Authority, said Gov. Ralph Northam’s call to amend General Assembly Bill 1899 to allocate planned coal production and use tax revenues at the College of the University of Virginia at Wise would be a good move for the region.

“We are very happy to see funds going to college in the governor’s proposal,” Belcher said Friday. “This still does not resolve the issue of removing the funding of government revenue.”

While Northam’s proposal to fund UVA Wise from the phase-out of the tax credit has yet to be passed in the General Assembly’s veto session on April 7, Belcher said it could mean up to to $ 900,000 in income cuts from about three years old.

In contrast, Northam’s amendment to the bill, if passed, would see UVA Wise start receiving around $ 6.5 million per year starting at around three years of age.

Belcher said the reduction would mean a loss of about 25% of the administration’s annual funding of $ 3-4 million.

The VCEDA, for more than three decades, has operated with the revenue from the state coal and gas departure tax for economic development projects in the service area of ​​the authority of eight counties and one city. Belcher said the authority also received income from tax credits for Virginia coal producers and utility companies using Virginia coal, but state law first required the use of departure tax funds.

While coal and gas departure tax money enabled VCEDA to fund several large commercial and manufacturing projects in the 1990s, Belcher said that the decline in coal production from the 1990s to today marked a greater reliance on income based on the tax credit.

“We still receive departure tax revenue from mining in three or four counties, but that money has gone down,” Belcher said. “We are the only agency negatively impacted in terms of economic development in the state budget bill.”

Belcher said HB 1899’s sponsor Del. Sally Hudson, D-Albemarle, addressed concerns about a possible loss of VCEDA funding in the bill with provisions for a stakeholder review process before the complete elimination of tax credits.

“It at least puts in place a mechanism to deal with those concerns,” Belcher said. “Delegate Hudson has indicated that she is not trying to interfere with economic development efforts in Southwest Virginia.”

In the VCEDA service region, Belcher said, four counties provide nearly all of the coal and gas departure tax revenue: Buchanan, Dickenson, Tazewell and Wise, in descending order of production.

Even with a declining coal economy, Belcher said, 2021 has been one of the authority’s busiest years in terms of large-scale projects and the number of small businesses securing grants and loans under the scheme. VCEDA’s seed capital program.

VCEDA’s recent activity includes supporting the expansion of the Tempurpedic plant in Duffield and manufacturing projects in Tazewell and other counties, Belcher said. Other long-term projects include sites in the Lonesome Pine Technology Park in Wise County and support for the Mullican Flooring factory, also in Wise County.

“Small business projects under the Seed Capital program make up about 10% of our budget, but they are also an important part of our work,” Belcher said.

Share.

About Author

Leave A Reply