Amber Kelly teaching in her Wise County classroom. She's part of the Tobacco Commission's talent attraction program. Courtesy of Wise County schools.

It’s easy to be cynical about studies, especially government studies. Over the years, whole forests have been clear-cut to make the paper for studies that now sit on some dusty shelf. Nowadays, there are probably whole data centers whirring to present those studies online (data centers that many in Northern Virginia don’t want and many in Southwest and Southside do, but I digress).

It’s especially easy to be cynical about the study that the Democratic-controlled General Assembly commissioned about the economy of Southwest Virginia’s coal counties. Earlier this year the legislature repealed the state’s coal tax credits – which admittedly were costing the state a lot of money and obviously hadn’t saved the coal industry. In return, the coal counties got a study.

A persnickety editorial writer for The Roanoke Times wrote at the time: “Now the coal counties have nothing, absolutely nothing, except the promise of a study. That’s pretty insulting, too.”

Oh, wait, that was me.

Clearly I wasn’t impressed by the idea of yet another study. I wrote at the time that Southwest Virginia should have demanded a lot more than another bureaucratic exercise. Anyway, that was then, this is now, and now the study is out – so I will try to set aside my previous cynicism and look at this study with an open mind.

I’m still not sure Southwest Virginia got much in return for repealing the coal tax credits. Granted, the coal tax credits were going away anyway. It wasn’t just coal-hating environmentalists who were against the coal tax credits. Even the green eyeshade number-crunchers at the Joint Legislative Audit and Review Commission – which no one has ever confused with a bunch of bleeding hearts – concluded that the coal tax credits actually cost the state more jobs than they saved. Nobody really argued with that math because arguing math with JLARC is never a good idea. Still there were some inconvenient side effects to repealing the coal tax credits that the proponents in the General Assembly tended to gloss over in their enthusiasm at voting for something green: Some of the coal tax credit money has gone to fund the region’s main economic development agency, the Virginia Coalfield Economic Development Authority. Once that amounted to $3 million a year. More recently, it’s been $900,000 a year. With repeal, that will go to, umm, $0. So, yes, if you want to be cynical (and practical), the legislature voted to cut funding for the economic development agency in a part of the state that desperately needs a new economy – but hey, there’s a study, OK?

Anyway, we now have 22 pages worth so let’s take a look at them. There are four recommendations – or maybe 11, since the last item has seven actions:

  1. Ensure the coalfield region has access to funding for site development in the Commonwealth’s site development fund.
  2. Expand existing solar energy programs, ensuring low to moderate income residents across the Commonwealth can participate in the clean energy transition.
  3. Support the growth of higher education in the coalfield region and enhance the quality of life for student populations in surrounding communities.
  4. Establish an inter-agency task force that seeks stakeholder input to address the revitalization of Southwest Virginia, starting with a review of the following seven priority proposals, identified over the course of this report:

    a. A downtown revitalization matching fund for communities of less than 2,000 people.

    b. Expansion of the Tobacco Commission’s Talent Attraction Program.

    c. A “Simulated Workplace” pilot program modeled after a West Virginia initiative that has demonstrated a 95% success rate.

    d. A pilot program for child care facilities inside industrial parks in the coalfield region.

    e. Support for the Southwest Virginia Energy Park, known as the “Energy Lab” project.

    f. Support for the innovative Energy Storage and Electrification Manufacturing (ESEM) project.

    g. Reform the mission and stakeholder composition of the Virginia Coal and Energy Commission.

All of these seem good ideas (more about some of these below), although I’m not sure we needed a study to know that, although if it takes a study to verify all this for legislators in Richmond (and soon to be a new administration), well, now we have it. Again, pardon my cynicism, but the state of the Southwest Virginia economy is not new.

“The economy of Southwest Virginia has not kept pace with that of the rest of the Commonwealth. The economic problems of Southwest Virginia are due in large part to its present inability to diversify. The Southwest has suffered, and continues to suffer, widespread unemployment in great disproportion to the rest of the Commonwealth.”

That’s not from this report. That’s what state law says – from 1988, when the legislature set up the Virginia Coalfield Economic Development Authority (which this year’s session just helped partially defund). Thirty years of technological and economic change hasn’t altered those basic facts, only accentuated them. Will this report make a difference? If you’re the optimistic sort, there are reasons to be optimistic. For one thing, some in the General Assembly do now seem focused on rural Virginia in general – and Southwest in particular – in a way they haven’t been before. Much of the recent Senate Finance Committee retreat in Roanoke was devoted to the economics and demographics of rural Virginia. “I think this is an all-hands-on-deck effort,” said state Sen. Jeremy McPike, D-Prince William County. For another thing, we have a new governor, one who comes from a business background and, perhaps more importantly, is politically indebted to rural Virginia in a way no governor has been for a long time. Third, the state treasury is flush with cash right now. Gov.-elect Glenn Youngkin wants to return some of that in the form of tax cuts but even if he does, Virginia will still be flush with cash. This is Southwest Virginia’s best opportunity in ages. If Youngkin and the new General Assembly can’t deliver for Southwest Virginia, then no one can. (Yes, that’s called putting some pressure on the new governor.)

To that extent, maybe there is a lot to like in this study, simply because it puts in black-and-white for a new administration some of the things it could do and probably ought to do. I won’t go through all 11 recommendations above but some do merit more conversation.

  • Site development. This was a topic at that Senate Finance Committee retreat. “The state that keeps me up at night is North Carolina and they’ve spent a lot more on sites than we have,” said outgoing Secretary of Commerce and Trade Brian Ball. “Critically for Southwest Virginia, you’ve got to have sites. That’s what makes this go.” This report puts some numbers to that, which were probably out there all along but are now in one place. Virginia spends $5 million a year on site development. South Carolina spends $43 million, Ohio $50 million, Georgia $66 million. But they’re all dwarfed by North Carolina, which spends $80 million. No wonder North Carolina keeps the secretary up at night. “At the current investment rate, Virginia will not catch up with competing states investing tens of millions of dollars annually and will continue to lose mid-size and transformational economic development projects,” the report says. “Additionally, the lack of site preparedness across Virginia is accelerating the economic divide between Northern Virginia and the smaller metros and rural regions of the Commonwealth, such as Southwest Virginia.” Site prep isn’t sexy but it does apparently matter. Deputy Secretary Cassidy Rasnick told the Senate Finance Committee: “I’ve never seen speed to market be as important as it has been in the past 12 months.” The report also includes these eye-popping numbers: “In just the last few years, Virginia’s lack of prepared sites has contributed to the loss of projects representing more than 39,000 direct jobs, 75,000 additional jobs, $55 billion in capital investment, and more than $235 million per year in new state general fund revenue.” Sharp-eyed readers may spot “contributed to” as weasel words but, still, losing out on 39,000 jobs and $235 million in revenue – no matter where in the state those jobs might have been – is not a good thing. And the footnote suggests the numbers could actually be worse: “Actual losses likely are considerably higher, as these estimates only include projects for which the Commonwealth was actively considered. In many cases, Virginia is eliminated based on an initial scan of our sites database that involves no direct communication with VEDP [the Virginia Economic Development Partnership].”

There’s also this: The report identified just three ready-to-go sites in coal country that are 100 acres or more: Constitutional Oaks in Lee County (128.6 acres), Lonesome Pine Business and Technology Park in Wise County (115.4 acres) and Leatherwood just outside Bluefield in Tazewell County (740 acres). Obviously topography is a challenge in Southwest Virginia, but the report suggests that with some money and earth movers, there could be more project-ready sites (especially given how many abandoned mine sites there are that could be rehabbed).

  • The talent attraction program. “It is important to note that investing in sites alone will not drive success for Southwest Virginia,” the report says. The region also needs a more skilled workforce. It specifically cites the tobacco commission’s Talent Attraction Program as something worthy of expanding. That program – which Amy Trent wrote about here – pays off student loans for college graduates in certain high-demand fields who agree to live and work in the commission’s territory in Southwest and Southside. When the Senate Finance Committee got a briefing on the program, state Sen. Chap Petersen, D-Fairfax, claimed that it was “the most innovative idea I’ve heard in 20 years.” There sure seemed enthusiasm at that meeting to expand the program, which so far has paid for 350 people. This gives another rationale to do that. This report recommends that, as far as the coal counties are concerned, the program should expand the number of eligible occupations “as widely as possible.” At the very least, the report says, “Preference should be given to occupations within the industries targeted by GO Virginia Region 1 in its 2017 and 2019 reports: agriculture and food/beverage manufacturing, information and emerging technologies, advanced manufacturing and energy and minerals.”
  • “Simulated workforce.” This is based on a West Virginia program that tries to simulate a work environment inside a school. According to the report, “the IT program manages all of the IT for the school system. A teacher that is experiencing a computer issue would submit a work order to the program and students would be dispatched to troubleshoot the issues, repair the computer, order any materials, and then invoice the school and complete reporting. The automotive program services the school system and the county’s fleet vehicles with similar processes.” The report says this is needed because many workers “often lack the interpersonal skills to maintain their employment” and “Increases in substance abuse also impact how students are being raised and the work ethic that is being demonstrated to them prior to graduation. Establishing an education model in the career and technical centers that focuses on learning but also incorporates the application of work ethic, soft skills, and business principles is a great start to changing the workforce climate in the region.” That’s a sad commentary on our times but so are lots of things. The report says that in 2016 – the last year figures were available – there were 660 students in Southwest Virginia who graduated but didn’t go to work and didn’t go to further schooling. So what were they doing? Who knows – but I’m reminded that one Southwest office-holder once told me he spoke to a high school class and was astonished when one student told him that after graduation he intended to go on welfare. Not much work ethic there! Meanwhile in West Virginia, the report says, “95% of students in the Simulated Workplace programs have entered the workforce or higher education after graduation, and 98.4% of students successfully pass their drug screening.”
  • The energy lab. This deserves its own column – stay tuned for that. The short version is that in 2019 the General Assembly created the Southwest Virginia Energy Research and Development Authority with a goal of promoting the region as a site for not just coal but energy development in all forms. Let’s give coal country legislators credit for trying to pivot to a post-coal future that embraces renewable energy. Of all the things on the list, this seems to have the most potential to be truly transformative. Of course, this is also likely to be the most expensive. This report agrees. What sets Southwest Virginia apart from other places doing energy research is that there’s lots of land available for testing, whether it’s new types of solar panels or new types of wind turbines or whatever. “This concept would be the only one of its kind in the Western Hemisphere and would be a catalyst for energy investment,” the study says. Irony: The timing for strongly Republican Southwest Virginia seems right here because there’s a Democratic administration in Washington that wants to spend lots of money on energy research. President Joe Biden has established an Advanced Research Projects Agency-Climate office with a $500 million budget and wants to increase the U.S. Department of Energy’s Office of Energy and Renewable Energy’s Budget by 65% – that’s $2 billion, if you’re counting. Now would be an excellent time to have a way for some of those dollars to wind up in Southwest Virginia.
  • The Energy Storage and Electrification Manufacturing project. We have a story on this in the works, perhaps as soon as later this week. It’s fascinating and does seem worthy of more support as something that is happening coal-related businesses transition to a non-coal economy.

If this study results in state support for some of these proposals, maybe it’s not as insulting as I said it was. We’ll see what happens to that “if.”

Dwayne Yancey

Yancey is editor of Cardinal News. His opinions are his own. You can reach him at dwayne@cardinalnews.org.