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Sunday, May 26, 2013
When Republican gubernatorial candidate Ken Cuccinelli announced his plans on May 7 to cut income taxes by $1.4 billion a year, he promised to offset some of the revenue loss by ending tax loopholes that “promote crony capitalism.”
Two days later, Cuccinelli was hanging out at the CONSOL Energy Center in downtown Pittsburgh watching the Pittsburgh Penguins hockey team in a playoff game, where ticket prices start at $125 for the nosebleed seats. He was there at the invitation of executives with CONSOL Energy, one of the largest coal companies in the United States, which was hosting a fundraiser on his behalf.
CONSOL has good reason to view Cuccinelli as a crony, er, ally. The company, with operations in Buchanan County, has already given Cuccinelli $50,000 for his gubernatorial campaign, according to the Virginia Public Access Project, and it invested $32,000 in his successful campaign for attorney general. He spent much of his AG term battling Environmental Protection Agency regulations and tormenting Michael Mann, a prominent climate change scientist who has the audacity to suggest that greenhouse gases are harming the planet.
No, I don’t think CONSOL has anything to fear from Cuccinelli’s tax plan, although I’m sure company employees got a good laugh when I called last week to ask them if they were worried.
Rather, it’s Virginians who care about schools, health care and law enforcement who should be concerned about the candidate’s frighteningly specific proposal to slash state revenues while making only vague promises to soften the blow on public services by eliminating tax loopholes. Details to follow. Or not.
I realize I am possibly the only person in Virginia right now fretting over policy. The scandal unfolding in Richmond involving Cuccinelli, Gov. Bob McDonnell, his former executive chef and a gift-dispensing businessman with a pending state tax dispute is turning into a plot line for a future Anthony Bourdain novel. Leafing through old tax studies is far more tedious. And, as a colleague astutely observed, I’ve already spent more time analyzing Cuccinelli’s policy proposal — I’m giving him too much credit here; it’s actually just a press release — than the candidate invested in its original authorship.
But I forge on. After all, one of this year’s gubernatorial candidates is going to be governor come January, and somebody needs to sift through the dumb ideas littering the campaign trail rather than wait until legislative committees are voting on bills with the potential to cause long-term damage.
In his press conference earlier this month, Cuccinelli declined to identify any specific tax loopholes he might target for elimination. He said he’d create a task force to prioritize all tax breaks.
“We will go from the bottom of that list, the lowest priorities, the ones that are least helpful to Virginia, on up the list and just eliminate them until we have got a balanced budget and we’ve got tax cuts that can help to spur job growth,” he said.
He pointed to a 2011 study of tax preferences by the Joint Legislative Audit and Review Commission, although he didn’t say whether he agreed with its conclusions. The report makes it clear it would be difficult to devise the list Cuccinelli envisions. Of 187 tax breaks examined, 131 were not being monitored for effectiveness.
But JLARC did single out for opprobrium two coal mining credits valued at $31 million annually. The credits were granted to the industry to slow the decline in mining jobs in Virginia, but employment has dropped by more than a third since the most recent tax break was adopted.
It’s impossible to know whether CONSOL benefits directly from the credits. State tax officials cannot disclose information on specific taxpayers. But CONSOL isn’t the only mining company throwing cash Cuccinelli’s way. He’s collected $161,000 from the industry in 2012 and 2013 so far.
Cuccinelli also has received $89,000 from electric utilities, $50,000 from natural gas companies, $56,000 from oil firms and $23,000 from railroads. Incidentally, JLARC tabulated the value of tax preferences for utilities at $345 million, $11 million for natural gas and oil, and $20 million for railroads.
Perhaps Cuccinelli won’t need a task force to help him identify tax loopholes that promote crony capitalism. All he needs to do is check his donor rolls.
Nuckols is editorial page editor for The Roanoke Times.
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