Governor Terry McAuliffe today vetoed Senate Bill 1470, which would reinstate the coal employment and production incentive tax credit and extend the coalfield enhancement tax credit without meaningful reforms:
March 17, 2017
Pursuant to Article V, Section 6, of the Constitution of Virginia of Virginia, I veto Senate Bill 1470, which would reinstate the coal employment and production incentive tax credit and extend the allowance of the coalfield employment enhancement tax credit without meaningful reform.
As I stated last year when I vetoed similar legislation, I work tirelessly to build a new Virginia economy and ensure that the Commonwealth is the best place to live, work, and run a business. Making the most effective use of every dollar taxpayers entrust to their government is an essential part of that effort.
In January 2012, the Joint Legislative Audit and Review Commission (JLARC) published its final report, Review of the Effectiveness of Virginia Tax Preferences, Senate Document No. 4. That report established that the coal tax credits were intended to slow the decline of coal production and employment. Instead, JLARC found that the decline of coal production and employment was the same or even faster than was predicted before the credits were created. JLARC's report concluded that the economic activity had not moved in the desired direction and that the credits had not achieved their goal.
Specifically, from 1988 until 2016, coal mine operators, electricity generators, and other coal-related companies have claimed over $637 million in tax credits. However, during the same period, the number of coal miners in Virginia has declined from 11,106 to 2,483. It would be unwise to spend additional taxpayer dollars on a tax credit that has fallen so short of its intended effectiveness.
Given the findings of the JLARC study and the lack of meaningful reform, including in this year’s legislative session, I believe it would be inappropriate to sign this legislation.
Accordingly, I veto this bill.
Terence R. McAuliffe