Sunday, March 6, The Virginian-Pilot ran the below op-ed column from Travis Blankenship, government affairs manager for Virginia LCV, on the need to eliminate ineffective coal tax credits that cost taxpayers millions of dollars while providing no return. Legislation extending these credits has passed out of the General Assembly and now awaits action from the Governor.
Travis Blankenship: Stop throwing away money in the coal fields
THE DECLINING coal industry has left unemployment in Southwest Virginia’s coalfield counties double that of the state average.
That’s the harsh reality, despite the fact that everyone agrees we need to figure out how to stem job losses and turn the corner from a waning coal industry.
I grew up in Russell County and am proud to call Southwest Virginia home. But the plight of this traditionally coal-driven region has become just another political football in Virginia’s General Assembly.
Both chambers have passed extensions of coal tax credits, touted as job saviors even though they are ineffective at creating or sustaining jobs. Since the credits began in 1988, the number of coal jobs has fallen from more than 11,000 to fewer than 3,000 today. Such lackluster results come despite yearly taxpayer subsidies totalling $610.6 million, paid directly to coal companies and utilities, not miners.
According to preliminary 2015 numbers, $37.3 million in taxpayer money went out the door — an increase of $9.2 million over 2014 — while the coal industry shed nearly 1,000 more jobs.
Still, a bipartisan majority in both chambers supported Senate Bill 44, which extends the state’s Coal Employment and Production Incentive Tax Credit and the Coalfield Employment Enhancement Tax Credit, despite broad evidence they do not work and that market forces will continue to move us further and further away from coal combustion.
Last year, the legislature split along traditional party lines on this issue. But 2015 was an election year and the credits still had another year before their scheduled expiration. This year was different. Democrats voted alongside Republicans to extend the credits, pressured to do so based on the empirically false argument that these credits are somehow saving coal jobs.
According to the U.S. Energy Information Administration, only 10 percent of the coal mined in Virginia is actually used for power generation in the state. Half is exported overseas — and even those numbers are declining due to global markets — while the remaining 40 percent is sent to other states.
Once the leading source of electricity in the commonwealth, today coal cannot compete with cheaper and more abundant natural gas, which has become the go-to fossil fuel for most utilities and now accounts for far more energy generation.
The only way Virginia has led in recent years with coal is through its ports, which are the nation’s top exporter of the fossil fuel, shipping one-third of the nation’s total, according to the EIA. But Virginia’s ports are also seeing sharp declines in the tonnage of coal that makes its way into the export market; 34.5 percent less coal shipped out of Virginia ports in 2015 from the year prior.
Job loss, lower yields of production and fewer exports: The arguments for using millions of taxpayer dollars to prop up our declining coal industry grow weaker and weaker.
The General Assembly should be doing everything it can to bring true economic recovery to the region — investing in new opportunities, workforce-development and education — which in turn will actually create jobs and economic growth across all of Virginia.
When given this opportunity, however, the General Assembly has continued to cling to old ideas.
For example, House and Senate committees killed legislation — sponsored by Virginia Beach Republican Del. Ron Villanueva in the House and Henrico Democratic Sen. Don McEachin in the Senate — directing Virginia to join a regional cap-and-trade program that would have steered revenues from trading with other states toward renewable energy investment, flooding resiliency in Hampton Roads and job creation in Southwest Virginia.
Early estimates predicted this program would have funneled $25 million per year through 2030 toward economic development efforts in the coalfield region and $125 million per year in flooding adaptation assistance. This was money left on the table without serious consideration.
If our legislature wants to get serious about job creation in Southwest Virginia — and Hampton Roads — it needs to come to terms with the fact that doing the same thing over again and expecting a different result is simply bad public policy.
I hope some day to return home to a Southwest Virginia that has accepted the fate of coal’s future and moved toward a revitalized and diversified economy. Maybe then, the people of Southwest will stop being political pawns in a rhetorical conversation.
Travis Blankenship
is the government affairs manager for the Richmond-based Virginia League of Conservation Voters. Email: tblankenship@valcv.org.