Del. Mark Sickles, a Democrat who is vice chairman of the House Appropriations Committee and a JLARC member, said a full review of the state’s tax incentives is warranted.
“They’re very difficult to stop once you start them,” he said.
The coal tax, in particular, is a politically charged topic, Sickles said, noting that Virginia’s coal country in the state’s southwest has long been economically challenged.
“It is very difficult to vote against something that a region of the state believes is its total lifeline,” he said.
Harry Childress, president of the Metallurgical Coal Producers Association, said he had not yet reviewed the report and couldn’t immediately comment on the tax credit recommendations.
The report also examined two so-called “enterprise zone” grants designed to incentivize property investment and job creation in certain distressed areas of the state.
“Local economic development staff rate the grants as useful, but they appear to have little effect on employment, income, and other economic indicators, according to statistical analysis and other research,” the report found.
Because the grants are nondiscretionary — meaning they are approved as long as minimum eligibility requirements are met — they likely reward behavior that would have occurred anyway, according to Ellen Miller, the commission’s chief economic development and quantitative analyst, who presented the report to lawmakers.