Dominion Energy Virginia is studying two potential sites for a proposed $2 billion pumped storage facility in Southwest Virginia, one in Tazewell County and one in Wise County. Over and above the jobs created, the facility would generate more than $7.7 million a year in new tax revenue. Under Virginia’s current tax structure, a single county — the one where the facility is located — would garner the lion’s share of the benefits.
However, companion bills sponsored by three coalfield-area legislators would divvy up the tax revenues between seven counties and the City of Norton, reports the Coalfield Progress. Under Senate Bill 780, revenues would be allocated as follows:
- 16% each for Tazewell and Wise Counties, with a 6% bonus for the host county.
- 12% each for Buchanan, Lee, Russell, and Scott counties.
- 10% for Dickenson County
- 4% for Norton
Likewise, any direct costs to the host localities for infrastructure improvements will be allocated between the localities in the same proportion.
Bacon’s bottom line: I’m intrigued by the logic behind this proposal, especially why Tazewell and Wise went along with it. Think of it this way: Let’s assume each of those two localities have a 50% chance of winning the whole kit and caboodle. (Actually, the odds look somewhat better for Tazewell, but let’s make the assumption anyway for purposes of argument.) Under the new proposal, they are guaranteed to get at least 16% but only 22% if they are the host locality. It’s a classic bird-in-hand-versus-two-in-the-bush situation, except that it’s really a bird in hand versus five birds in the bush.
If I were a gambling man, which I’m not, and the odds were 50/50 on two horses, one with a $1 payout and one with a $5 payout, I’d bet on the second horse. But Wise and Tazewell are foregoing that approach. One might think that local leaders are calculating that sharing the revenue will unify and strengthen the region politically in the bid for its biggest economic development prospect in years. But the enabling legislation for the pumped-storage facility is already law. Unless there is something that I’m missing, which is entirely possible, it seems that Wise and Tazewell are showing remarkable forbearance. The coalfields could serve as a shining example for other Virginia regions competing for big economic development projects.There are currently no comments highlighted.