Virginia General Assembly passes unusual bipartisan plan to help impoverished areas

Tuesday , February 13, 2018 - 10:20 AM

Gregory S. Schneider

(c) 2018, The Washington Post.

RICHMOND, Va. - A bipartisan bill aimed at luring companies to economically distressed parts of Virginia by offering tax breaks to their employees has advanced in the General Assembly, passing the House of Delegates on Tuesday after a similar measure cleared the Senate the day before.

The measure, dreamed up by Del. Will Morefield, R-Tazewell, as a hail-Mary attempt to help rural and disadvantaged areas that seem forgotten , drew unusual debate in both chambers. Lawmakers grappled with an idea that appears extreme but has drawn passionate support outside the usual partisan lines.

Morefield prefaced his presentation of the bill in the House by praising a colleague who has helped him build support across the aisle - Del. Lashcrecse Aird, a Democrat from Petersburg.

While Morefield is from an area that’s heavily white, Republican and rural, Aird is from a majority-black city and Democratic stronghold. But they have been allies on the bill, united by the desperate poverty experienced by people in their hometowns.

“If [she] is an example of the future of this body, we are in good hands,” Morefield said, drawing applause.

The measure would let suffering areas offer both corporate and personal income tax breaks for companies that agree to locate there, as long as they meet certain criteria. The bill contained a list of 39 counties and six cities, and was modified Monday to add another county.

Several Democrats spoke in favor of the bill during debate on Monday, and praised Morefield for his effort to come up with a creative way to seek economic development in troubled areas. But he drew tough questions from some senior Republicans, including Del. Chris Jones, R-Suffolk, the powerful chairman of the Appropriations Committee.

Jones said he felt the 10-year term of the tax breaks was too long. Ordinarily, he said, measures with a “sunset clause” would have a term of three to five years.

Morefield countered that he had interviewed multiple companies in preparing the bill, and was told that a 10-year term would be more likely to attract potential employers.

Del. Steve Landes, R-Rockingham, argued that the bill should be considered “special legislation” and handled differently, because it applies to only a few localities. But House Speaker Kirk Cox ruled that it was not.

The House passed it Tuesday by a vote of 87-12.

The Senate passed its version the day before. Debate there took a different turn, with criticism coming from several Democrats in wealthy districts.

Sen. Bill Stanley, R-Franklin, who carried the Senate version, went through a long litany of ways the Southwest and other rural areas are less fortunate than “the gold crescent” - the area from Northern Virginia to Richmond and over to Hampton Roads.

In Southwest, he said, people have lower life expectancy, less health insurance, less education and greater likelihood of opioid addiction. Stanley quoted Virginia community college chancellor Glenn DuBois, who said two years ago that “if it were its own state in educational attainment, the rural areas would be dead last, dead last in the nation.” The other parts of Virginia would rank second nationwide, he said.

Senators from wealthier areas peppered Stanley with questions and criticisms. Sen. Richard Saslaw, D-Fairfax, pointed out that someone who already lived and worked in one of the 39 counties and six cities specified in the bill could simply switch jobs to a new company and no longer have to pay state income tax.

Sen. Jennifer McClellan, D-Richmond, worried that someone could live in a wealthier area and commute to a job in one of the distressed areas to avoid taxes. Sen. Chap Petersen, D-Fairfax City, suggested the bill might violate the state constitution by giving special treatment to one class of people.

Stanley answered the questions patiently, but finally grew impatient. “We don’t need a handout. We don’t need more government assistance. We’ve got that,” he said. “We’re just asking for a hand and a chance.”

The bill passed the Senate 29-11.

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