Virginia Legislators Resist Bailout of ‘Corporate Welfare Fund’
Virginia Gov. Terry McAuliffe has committed to more corporate welfare spending than he has the authority to pay for, and state lawmakers are hesitant to approve supplemental funding.
“Virginia faces a projected revenue shortfall of $2.4 billion over the next three years,” according to Watchdog.org, “and House Speaker Bill Howell says he’s committed to curbing the special breaks.”
Howell, a Republican, told Watchdog that, “Virginia needs a tax code that encourages growth,” and suggested, “We can eliminate those incentives and lower the overall tax burden on Virginia’s families and businesses.”
“Tax incentives have a role to play, but there has to be accountability to make sure those incentives are working,” he added, noting that, “Some incentives have probably outlived their usefulness.” (RELATED: Texas Gov. Rick Perry Wants Tesla in Texas)
In October, The Washington Post reported that “the McAuliffe administration has committed and offered more than $68 million in state incentive grants” in less than a year, signing 191 deals worth more than $4.7 billion in capital investment.
The primary vehicle for incentive spending is the Governor’s Opportunity Fund, which has already announced $24 million in grants, with another $26 million awaiting final approval. (RELATED: States May Have to Disclose Business Subsidy Costs)
“For the same period under former Republican governor Robert F. McDonnell,” by contrast, “the state awarded about $12.7 million in such grants.” McAuliffe’s predecessors were so frugal, in fact, that they were able to transfer “$29 million into the general fund to meet other needs.”
At the time, McAuliffe said he was “confident the General Assembly will keep the funds flush,” but legislators are now indicating that they consider tax relief a higher priority. (RELATED: Film Subsidies under Scrutiny in South Carolina)
Tim Wise, president of the Arlington County Taxpayers Association, told Watchdog that the General Assembly should offer the governor a trade. “In exchange for more incentive grants for more crony capitalism,” Wise proposed, lawmakers could “offer the governor an opportunity to sign a bill doing away with the corporate income tax,” which he said “would make Virginia products and services more competitive.”
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