RICHMOND — The push to extend Virginia’s coal tax credit passed the Senate by a wide margin Monday.
The Senate voted 33-7 to keep the industry tax credit alive for another five years. That is a veto-proof margin of support — a key consideration as Gov. Terry McAuliffe struck down similar bills last year.
The coalfield employment tax credit, created to try to slow the decline of Virginia’s coal industry, generated an estimated $28.4 million in tax savings, refunds and economic development support for coal mine operators and the coalfield region last year.
The credit, which has come under criticism, is currently slated to sunset at the end of the year. Senate Bill 44, sponsored by Sen. Bill Carrico, would push that expiration date back to January 2022.
“This coal tax credit is vitally important to the region,” said Carrico, R-Grayson, adding Southwest Virginia has been hard hit by the loss of coal jobs and can ill afford to lose more ground.
Between 1990 and 2014, Virginia saw 251 coal mines close and lost more than 8,200 mining jobs, Carrico said. Today, fewer than 70 mines are in operation in the state.
The coal employment tax credit, one of the larger industry tax credits offered by the state, came under scrutiny after a 2012 study questioned whether it was meeting its goals.
Coal production and jobs have continued to decline at the same rate or faster despite the state pouring hundreds of millions into the coal employment credit and a second tax credit offered to coal-buying utility companies.
McAuliffe, whose administration spoke against Carrico’s bill during earlier hearings, has called for revamping how money is funneled into Southwest Virginia’s economic development. The state should shift its focus to cultivating growing industries like technology and renewable energy, he said.
But Sen. Ben Chafin, R-Russell, said during Monday’s debate those are speculative endeavors that aren’t offering jobs today.
“They’re encouraged to get jobs in Southwest Virginia with renewable energy companies,” Chafin said. “Show me one. I’ll fill out the job application for people. That is just simply not happening.”
“These [coal] jobs are real and they’re here now. But they’ll be gone tomorrow if you vote no on this.”
Citing estimates from the Virginia Coal & Energy Alliance, Chafin added that some predict up to 1,000 coal jobs will be lost if the tax credit support disappears.
That doesn’t include the effect on related industries, including rail shipping and ports, he said.
The final vote to extend the tax credit reflected a significant jump in support over last year when a similar extension bill was heard.
Sen. David Marsden, D-Fairfax, voted in favor of SB44, but also urged Southwest Virginia leaders to start embracing wind turbines and other renewable energy projects and “start recognizing the fact that the future for coal is not good.”
“Part of me says, look guys, give up the ghost,” he said. “They’re holding out like somehow or other coal is going to come back, and that ain’t likely to happen.”
But that said, he concluded, “I can’t vote to take these jobs away from these individuals.”
Marsden wasn’t immediately sure if he’d vote to override a veto if McAuliffe goes that route again. “I’d have to hear what the governor has to say,” he said.
The governor’s office said only that McAuliffe will evaluate the proposal if it reaches his desk. The House of Delegates is advancing a similar bill that would extend the coal tax credit to 2020.
Carrico said he was heartened by Monday’s vote and felt the tax credit extension was in a good position to pass even if it required a veto override.
“You may lose one or two people, but I don’t think you’re going to lose that many,” he said. “I think most people who’ve expressed their support for it realize they can’t leave the gaping hole wide open. They have to stop the bleeding, and let us work toward another alternative goal.”