On May 1, Coal Age received a press release from the Virginia Energy and Coal Alliance (VECA), which said that Governor McAuliffe had vetoed a proposed sunset extension of the Coalfield Employment Enhancement Tax Credit and the Coal Employment and Production Incentive Tax Credit. Both bills (HB 1879 and SB 1161) passed the 2015 Virginia General Assembly with overwhelming bipartisan support. Many, especially the VECA, believe the coal tax credits were essential in helping southwest Virginia’s economy adjust to the decline in coal production, the closure of mines, and the loss of hundreds of direct and indirect jobs. These tax credits, according to VECA, had also generated vitally important tax revenues for essential infrastructure projects across the region.
Explaining his decision, Governor McAuliffe cited a report from the Joint Legislative Audit and Review Commission (January 2012) that found that the effectiveness of tax preferences designed to promote specific activities appeared to be mixed. “The purpose of these two tax credits was to slow the decline of coal production and employment,” McAuliffe said. “Due to both coal production and coal employment declining at the same or even faster rates than predicted… the report concluded that the economic activity had not moved in the desired direction and that the credits had not achieved their goal.”
From 1988 until 2014, coal mine operators, electricity generators and other coal-related companies in Virginia claimed more than $573 million in tax credits. However, during the same period, the number of coal miners in Virginia has declined from 11,106 to 3,600. Common sense would say the people of southwest Virginia need the help more now than ever.
Governor McAuliffe reminded everyone that he has worked tirelessly to build a new Virginia economy and ensure that Virginia is the No. 1 place in which to do business. “To attract new jobs, I must assure business leaders that Virginia has both fair tax policies and is the best choice for employees and their families,” McAuliffe said. Then, he vetoed a bill with bipartisan support for the coalfields of southwest Virginia.
He and Todd also talked about how to move the U.S. economy forward. “Look at Virginia, today, that’s a year in office,” McAuliffe said. “Our economy is booming, lowest unemployment rate… we have brought people together in a bipartisan way around ideas. And that’s what Hillary can do to this country. And that’s what she will do.” Rest easy, like the miners of southwest Virginia, Hillary is on her way.
Steve Fiscor, Coal Age Editor-in-Chief