Governor’s Bill Raids General Fund for Bonuses to Private Road Developers
Southern Environmental Law Center, Virginia League of Conservation Voters, Virginia Conservation Network,
Coalition for Smarter Growth, & Piedmont Environmental Council
PRESS RELEASE
For Immediate Release
March 5, 2010
Contact
Trip Pollard, SELC, 804-318-7484 (c)
Lisa Guthrie, VALCV, 804-240-1976 (c), 804-225-1902 (w)
(bill in House General Laws Monday)
Governor’s Bill Raids General Fund for Bonuses to Private Road Developers
House Bill 1395 Likely to Lead to More Cuts to Education, Health Care, and other Services
Last week, Governor McDonnell requested introduction of House Bill 1395, which would grant bonus payments to private highway developers and others out of the tax revenues generated by certain economic development activities. This bill will be considered in House General Laws on Monday.
The Senate Finance Committee rejected a nearly identical bill (SB181) in February. Like the Senate bill, HB1395 would allow state officials to grant private highway financers and construction firms a share of state sales, income, and corporate taxes, without approval by the General Assembly.
“Virginia is already facing severe cuts to education, health care, and environmental protection, along with other critical needs,” said Lisa Guthrie, Executive Director of the Virginia League of Conservation Voters. “HB 1395 would siphon off an unspecified amount of General Fund revenues and likely cause additional cuts and layoffs.”
“This bill would allow a giveaway of taxpayer’s hard-earned dollars to private highway financers and builders,” noted Trip Pollard, Land and Community Program Director for the Southern Environmental Law Center. “It is well-intentioned but fundamentally flawed. It’s a blank check to highway developers that may well result in a net loss of jobs.”
Under HB 1395, if a new bypass resulted in a new mall, for example, the road builder could be given 50% of the state sales, income and corporate income taxes from the mall, all while the mall may also be draining revenue and jobs from existing downtown businesses. In opposing SB 181, members of the Senate Finance Committee noted that Virginia cannot afford to give away more tax revenues, that estimates of future economic activity are notoriously unreliable, and that the bill is so open-ended that it could have meant giving the private Beltway HOT lane builders 50% of future tax revenues from an expanding Tyson’s Corner.
“We need to dedicate our General Fund resources to investing in people – teachers, police, health care, job training, and small business investment. When it comes to transportation we need to focus on fixing existing infrastructure, on smart growth land use and transportation solutions, and on funding transportation with appropriate revenue sources,” concluded Stewart Schwartz, Executive Director of the Coalition for Smarter Growth.
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