At this point in the General Assembly, we’re usually focused on the bills that are still alive.
Instead today I’ll write about two that are dead, and have been dead since the early days of this year’s session.
Del. Jason Ballard, R-Giles County, introduced a bill to add Giles County and Pulaski County to the list of localities covered by the Tobacco Region Revitalization Commission, aka the Tobacco Commission. Del. Kim Taylor, R-Dinwiddie County, introduced a similar bill to add Petersburg. Both bills were killed — by a vote of 6-0 — in a House subcommittee. Legislators from Tobacco Commission territory were sympathetic but also not keen to spread the commission’s dollars to three more localities.
For those not in the know, the Tobacco Commission really has nothing to do with tobacco; it administers an economic development fund for localities where tobacco was once a major crop. In the 1990s, 46 states (including Virginia) sued tobacco companies to recover health costs associated with cigarette smoking. In 1998, they entered into a so-called “master settlement” with those companies. Different states used their money in different ways but generally put them toward health care. Virginia was the only state that used part of the money to set up an endowment to help those tobacco counties create a new economy. Starting with about $1 billion, the commission’s fund at the end of fiscal year 2021 (the most recent audit available) stood at $395.7 million, so you can perhaps understand the reluctance of some legislators in Southwest and Southside to add more localities to the list of those eligible. A few more housekeeping details before we move on: The commission says that over its lifespan it has awarded $1.47 billion in grants and loans that have helped create 27,100 jobs in the poorest parts of the state and generated $4.08 billion in private investment. (If you’re wondering why that $1.47 billion is higher than the starting amount, keep in mind that there’s such a thing as interest.)
We can have a robust debate about whether the commission has always used its funds wisely but, big-picture, you have to think about what Southwest and Southside would look like without it. The commission has been part of deal-closing funds for many of the biggest economic development projects in the region; who knows whether those deals would have happened without those tobacco funds? The commission was also paying to lay broadband in rural Virginia long before any of the big telecoms would even think about such a thing.
Ballard says that if he’s reelected — he does face an opponent for the Republican nomination — he’ll be back with the bill to add Giles and Pulaski, so maybe we’re not looking backward, maybe we’re looking forward. Ballard’s rationale for those two counties is that Giles has been hit by the decline of tobacco because its big employer is the Celanese plant, which makes acetate tow, which is used in cigarette filters. Giles may not be a tobacco-growing county but some of its economic fortunes are directly linked to the tobacco business. Likewise, Petersburg used to be home to a big cigarette maker, which closed in 1985, so it’s arguably been as hard hit economically as some tobacco-growing counties.
Pulaski’s tobacco heritage is less clear. The federal agriculture census of 1930 listed 20 acres of tobacco being grown in Pulaski (none in Giles), but that same report also showed a lot of other counties growing tobacco that are nowhere close to the Tobacco Commission counties of today. Even Prince William County was listed as growing 15 acres of tobacco that year. (Now it grows data centers – 523 acres of them.) In olden times, virtually every locality in the state grew some tobacco, but obviously some — in Southwest and Southside — were more dependent on the tobacco economy than others.
There have been suggestions in the past (as recently as November 2021) that the Tobacco Commission be extended to cover a lot more localities, pretty much anything outside the urban crescent. Southwest and Southside legislators have not been keen on that, for obvious reasons. This was money promised to tobacco-dependent localities; to spread that around further effectively breaks a promise the state made to those regions. Maybe Giles and Petersburg should have been included in the Tobacco Commission from the get-go but they weren’t, so it may be hard now: Legislators from Tobacco Commission territory are reluctant to set a precedent.
Still, Ballard and Taylor have a point: Their localities face many of the same economic challenges as the localities covered by the Tobacco Commission, they just don’t have a pot of money they can turn to for help. They’re not alone, either. In November 2021 the Senate Finance Committee looked at which localities were considered economically “distressed” — 25 localities outside Tobacco Commission country were formally declared as distressed in at least one way. Another 29 outside Tobacco Commission territory were declared as “double distressed.” Some of those are rural but some are distinctly urban — including Lynchburg, Roanoke, Richmond and much of Hampton Roads.
Those 29 localities also included the three places Ballard and Taylor were pushing: Giles, Pulaski and Petersburg.
It seems to be that what those 29 doubly distressed localities outside Tobacco Commission territory — and maybe those 25 singly distressed ones, as well — need is their own endowed fund to be used for economic development.
Great idea, you say. So how are we going to fund it? We’re not suing anybody else on the scale of the tobacco companies; that was a one-time opportunity. (The settlement with opioid manufacturers is similar; that money is going to the newly formed Opioid Abatement Authority, but that money is going for treatment programs and the like.)
Here’s an idea — it’s one I’ve floated before, although so far nobody has bitten on it: The Washington Commanders want a new stadium. Gov. Glenn Youngkin is very keen for the team to land in Virginia — Northern Virginia. He proposed a budget amendment of $500,000 to help draft a plan with the caveat that “any package of potential incentives, including the establishment of a potential Stadium Authority, shall be developed in the best interest of Virginia taxpayers.” The state Senate’s version of the budget strikes this out, so we’ll see how this plays out in the budget negotiations.
In previous columns, I’ve been skeptical of this, pointing out that in much of Southwest and Southside, the Commanders are not our team. The Carolina Panthers have more radio broadcast outlets in this part of the state, for instance, so at best there are divided loyalties. The hope is that a stadium complex (key word there: complex, we’re not just talking about a stadium but a whole “football city” of entertainment, lodging and dining options) will spur adjacent development, which will generate lots of tax revenue.
I’ve suggested in the past that downstate legislators ought to say, “Sure, we’ll vote for the state getting involved in a Commanders stadium, but only if we get something out of it.” Here’s something we could get: Dedicate part of the revenue from the stadium complex to a special economic development fund for these distressed localities that fall outside of Tobacco Commission territory. That won’t be a $1 billion nest egg from the start, like the Tobacco Commission had, but over time it should build up a nice endowment. There’s some precedent for this: The Maryland Stadium Authority was created to finance the stadiums for the Baltimore Orioles baseball team and the Baltimore Ravens football team (its duties have since expanded); about 64% of its revenue goes to Baltimore city schools for construction. Now, that’s a case of revenue from Baltimore stadiums supporting Baltimore projects; this would be a case of a Northern Virginia stadium being used to support downstate projects. Those pushing for the stadium authority, though, insist that the Commanders are Virginia’s team. I think the fan base evidence disputes that but let’s accept their argument — if this really is Virginia’s team, then the revenues ought to benefit all of Virginia. Or, at least, some of the parts of Virginia that need help the most. Here’s a way to do that.