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Taking a swing / February 14, 2018
Winter is on the wane and spring training is officially underway. Let’s take a moment to get in a few hacks:

» Last week the topic in this space was the future of rural Southside, no biggie there. Our musings were prompted by census estimates suggesting that Halifax and surrounding counties are losing population at an alarming pace. Because the diagnosis is often easier to come by than the cure, we haven’t yet ventured a followup column with suggestions for what to do about this problem. But lo and behold, the Virginia General Assembly is poised to step in with its own answer.

That would be House Bill 222, which passed the lower chamber on Tuesday by an 87-12 vote, after similar legislation cleared the State Senate earlier this week. Co-patroned by Republican Delegate Will Morefield of Tazewell and Democratic Delegate Lashrecse Aird of Petersburg, HB 222 would waive corporate and personal state income taxes for out-of-state businesses that invest in economically-disadvantaged parts of Virginia. Tazewell and Petersburg are poles apart in many respects, but each could certainly serve as a poster child for downtrodden communities. Morefield came up with the idea for a blanket tax exemption to encourage investment in rural and inner-city Virginia, and the bill is winning converts at a surprising clip.

The optics of the legislation — birthed by a Southwest Republican who lost his father to opioid abuse, and championed by an African-American female colleague and Democrat who represents one of the most troubled localities in Virginia — do nothing to harm the bipartisan glow around this effort. And yes, Halifax is on the list of localities that would be covered under the tax exemption. Del. James Edmunds has signed up as a co-sponsor of the bill, and State Senator Bill Stanley, who represents the western half of Halifax County, is carrying companion legislation in the State Senate

So what more is there to say on the subject? Reading up on the bill this week, I was struck by this passage in a Monday article in The Washington Post: “If it doesn’t pass, Morefield said, he’ll try again next year. If it does pass, there’s no guarantee it will make a difference. ‘Who is anyone to say if it’ll work or not when it’s never been tried before?’ Morefield said.” Maybe I’m just being a contrarian, but include me among the skeptics who think this bill will fail to make much difference. Variations of this tax-free strategy have been tried before — and flopped. What does seem fair to say is that a sweeping tax exemption aimed at juicing rural development could be part of a cocktail of remedies for the economies of places like Southside Virginia. It’s very unlikely to prove a magic elixir unto itself.

Huge projects such as the Microsoft data center in Mecklenburg County can create false notions about job creation and community revitalization. (It’s important to note that Microsoft’s arrival has coincided with deepening population losses in Mecklenburg, which is losing people faster than Halifax). Contrary to the impression you might get from the usual economic development suspects, relatively few new jobs are created by companies that move into communities from out of state. In fact, these headline-grabbing prospect recruitments typically account for less than 5 percent of annual state job creation, while home-growth companies provide around 80 percent of new employment. As you may have guessed, the latter group is entirely ignored in the House legislation. Instead, this bill is tailored towards larger enterprises with no existing operations in Virginia, exactly the sector that historically has done the least to bring jobs to places like Southside.

What kind of company actually does create jobs? The answer, not surprisingly, is start-ups — while prone to failure, they do point to underlying vigor in local economies, and sometimes they succeed big-time. Yet these firms also are least poised to take advantage of income tax exemptions such as the General Assembly is proposing. (Most start-ups don’t produce significant taxable income for years, and few would meet the threshold investment and job creation requirements that are set in Morefield’s bill.) What factors, then, are important to start-ups? The list includes a community’s educational attainment, quality of the workforce, proximity to job training centers, colleges and universities, investments in K-12 education and other quality-of-life metrics. While it’s tough to complain about tax breaks to help down-and-out areas, it’s worth asking whether sweeping exemptions that might crimp the state’s revenue stream are more important than taxpayer-supported public assets that might make communities more attractive to begin with. Tax-cutting schemes always come at a cost, regardless of what their proponents may say. Maybe we should consider the possibility of opportunities forsaken before signing off on the Morefield-Aird bill.

One more thing: that Washington Post article tells a genuinely affecting story about Delegate Morefield: He lost his father, the son of a coal miner, to an opioid overdose, and similar tragedy befell Morefield’s brother, also dead of drug abuse. So there’s no doubting the depth of his feeling whenever Morefield describes the dire straits of his hometown of Tazewell. But here’s the thing: this rural Republican delegate is an ardent foe of Medicaid expansion, which could be a godsend for opioid addicts in his home area. (Medicaid is one of our most effective programs for combating substance abuse). Medicaid expansion also would create health care-related jobs in places like Southwest Virginia, which has been hit hard by hospital and medical center closings. The idea of providing a wholesale tax exemption for imaginary Fortune 500 companies moving into Tazewell, Va. while shunning a sure-fire program for creating new jobs in rural areas seems more than a little perverse to me. There may be no doubting the depth of Del. Morefield’s feeling. His analysis for what to do about the problem, alas, is more questionable.

Speaking of questionable, the White House has been busy this week covering for a credibly-accused wife beater in the person of Rob Porter, an up-and-comer in the Trump Administration until accounts of domestic abuse by his two ex-wives surfaced — with photos this time. Women with black eyes is a bad look even for this White House. Team Trump has had a heck of a time communicating anything that resembles the truth about what it knew beforehand about Jon Porter — including his inability to qualify for a security clearance, no small concern for a man charged with briefing the President of the United States on the country’s most important secrets. Up till now, I’ve been waiting to see what Special Counsel Robert Mueller produces with his Russian investigation before believing that Donald Trump might encounter a scandal that even he can’t weasel out of. Now I’m not so sure. Trump’s despicable behavior on so many fronts could possibly come to a head over questions of domestic violence and sexual misconduct. It’s time for all the White House lies to end and accountability to have its turn.

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