Watchdog review finds issues with costly incentive programs

RICHMOND, Va. — Several of Virginia’s publicly funded economic development incentive programs have limited benefit and either need to be overhauled or eliminated, according to a new report published Monday by the state’s legislative watchdog agency. “The tax credits are among the state’s largest incentives, but they generate economic losses for the state and no longer appear relevant,” the report said. One tax credit that typically goes to mining companies and was intended to help Virginia coal producers maintain competitiveness “is no longer warranted” because Virginia’s mining productivity has met that of other states, the 151-page report said. The other, a credit designed to encourage electricity generators to use Virginia coal, “no longer serves a purpose” because all but one coal-fired plant in the state will close by 2025, the report said. The majority of the projects funded by the TROF program, which provides performance-based grants and loans at the start of a project, have not met their goals, according to the report, which also said due diligence procedures for grant awards were “lacking.” As for the megasite program, economic benefits “are low and are expected to remain low compared with other incentives even if occupancy of the industrial sites increases,” the report said.