The “Virginia Way” has long represented the harmonic, “people above party” verbalization of acting upon the common good of the people, an homage to Plato’s “Form of the Good,” wherein doing what is defined as the good in society is the categorical imperative. Following this mantra, in times of extreme political partisanship, some lawmakers have found a unifying theme that has captivated the hearts and minds of Virginians in order to forward the necessary ideas and plans to aid the growth of society.
A few weeks ago, State Senator Bill Stanley (R-Franklin) and former head of the Democratic Party of Virginia Paul Goldman teamed up to embark on a path to craft a plan to modernize the Commonwealth’s crumbling schools. Regardless of their political designations, they found that the school children in both Stanley’s rural setting and Goldman’s urban region have the unfortunate relationship of being united through disparaging conditions in their institutions of learning. Therefore, they have put their political parties aside to achieve a goal that benefits all.
There is now an additional instance of wading across the aisle of political quagmire to achieve excellency, working together for the common good.
Delegate Will Morefield (R-Tazewell), a white conservative from the coalfields of Southwest Virginia, and Delegate Lashrecse Aird (D-Petersburg), a liberal African-American from the former industrial hub of Central Virginia, have teamed up to tackle an issue that both sets of their constituents face, even though they are in very politically diverse areas.
While there are not many similarities between Tazewell County and the City of Petersburg, they share – like Richmond and Franklin County share the same situation surrounding debilitating schools – an atmosphere of economic distress.
Decades ago, when the U.S. was running mainly on coal-fired power plants, the area was booming. Nearly everyone in the southwestern region of the state was working, in some capacity, in the coal industry. However, after more stringent environmental regulations have been passed and the general national animus has been to move away from the burning of fossil fuels for energy, the area has languished economically.
Petersburg, at one time, was an industrial leviathan in the southeastern part of the U.S. Industry prospered up until the late 1980s when the city saw tobacco giant Brown & Williamson, the city’s largest manufacturer, close up and leave. Compounded by vast de-industrialization, the restructuring of railroads, and related national structural economic changes, the city was left without a strong job market, similar to what happened in numerous older industrial cities across the “Rust Belt” of the North and Midwest.
Both rural and urban Virginia have been in dire need of something fresh and creative to happen to spur growth.
The result of this commonly uncommon relationship between a rural Republican and an urban Democrat was proposed legislation during the 2018 General Assembly session, which is now law, to create unique tax breaks for employers that locate in economically desperate areas throughout the state.
Introduced by Delegate Morefield, with Delegate Arid signing on, H.B. 222 establishes an income tax modification for companies that “invest at least $5 million in new capital investment in a qualified locality and create at least 10 jobs, paying at least 150 percent of the minimum wage in a qualified locality,” or a company may “create at least 50 jobs paying at least 150 percent of the minimum wage in a qualified locality,” the bill states.
A company is eligible to claim the income tax modification only if it had no property or payroll in Virginia on the effective date of the act. The program is set to run from 2018 through 2024.
According to the bill, a “qualified locality” includes:
“The Counties of Alleghany, Bland, Buchanan, Carroll, Craig, Dickenson, Giles, Grayson, Lee, Russell, Scott, Smyth, Tazewell, Washington, Wise, and Wythe and the Cities of Bristol, Galax, and Norton; the Counties of Amelia, Appomattox, Buckingham, Charlotte, Cumberland, Halifax, Henry, Lunenburg, Mecklenburg, Nottoway, Patrick, Pittsylvania, and Prince Edward and the Cities of Danville and Martinsville; the Counties of Accomack, Caroline, Essex, Gloucester, King and Queen, King William, Lancaster, Mathews, Middlesex, Northampton, Northumberland, Richmond, and Westmoreland; and the Counties of Brunswick and Dinwiddie and the City of Petersburg.”
For a company to qualify for the modification, they must obtain an annual certification from the Virginia Economic Development Partnership (VEDP) that the company will have a positive fiscal impact on Virginia, all based on a predetermined set of guidelines.
Furthermore, the bill permits qualified localities to provide grants and loans to companies that qualify for the modification, and also authorizes grants and loans of up to $2,000 per job per year from the Commonwealth’s Development Opportunity Fund to an eligible company.
Although the six-year program is not an immediate solution, it is one that will allow for long-term effects. Nevertheless, Morefield is continuing to push for more ways to change the economic dynamic of rural Virginia. His proposal is for local economic development authorities in rural areas to set up joint ventures with their counterparts in urban areas and share the revenue.
What an urban area lacks in land area, it can make up for in funds to underwrite a project. As well, what a rural area lacks in funding, it makes up for with land. Therefore, a symbiotic relationship could be created to benefit the citizens of both areas.
Though, Morefield’s has an even more daunting idea: local governments in Virginia signing similar joint development deals with local governments in other states. The Virginia Constitution does allow this.
Large corporations in big cities like Seattle, San Francisco, and even New York City have felt the strain of high taxes, leaving them little room to expand. So, for instance, a rural locality in Virginia could sign a deal with Seattle – the city directs some of those tech jobs Virginia’s way, and in return the Commonwealth shares in some of the revenue.
This is a creative way to bolster economic growth without relying solely on tax breaks for companies relocating to Virginia localities.
As The Roanoke Times says, “the biggest implication of Morefield’s proposal about interstate economic development partnerships: It raises the bar for what we expect of local officials.”
“We elect both presidents and governors with the understanding they’ll negotiate trade deals — presidents with countries, governors with specific companies,” the Times added. “Perhaps we should expect much the same from local officials, just in a different way.”