ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, February 29, 1996 TAG: 9602290062
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
DATELINE: RICHMOND
SOURCE: ROBERT LITTLE STAFF WRITER
The General Assembly moved closer Wednesday toward offering $188 million in tax credits to the state's struggling coal producers, an adrenalin shot for the Southwest Virginia economy.
Supporters hope it will save thousands of jobs and preserve an industry woven into the region's character. But others say it's just a temporary fix - a delay in the inevitable death of Virginia's once-mighty coal industry.
"It's almost deceptive to give a tax credit that will allow this industry to avoid the economic realities," said Sen. Joseph Gartlan, D-Fairfax County, who opposed the measure. He proposed using the money to develop other industries in the region.
"When this tax credit stops - when the economic realities of the industry assert themselves one more time - we will have done nothing but applied a Band-Aid to keep this industry from shutting down."
The Senate's Finance Committee voted overwhelmingly in favor of the credits, which would be phased in over five years starting in 1999, then phased out over five more.
The House of Delegates has passed the measure, so it needs approval only from the full Senate and the governor to take effect. Wednesday's vote bodes well for the bill's fate on the Senate floor; The governor has not taken a position.
Much of the Virginia coal industry's troubles are a product of depleted coal reserves. Many coal deposits are so narrow that mining them is no longer profitable. The tax breaks would be offered as an incentive for companies to mine the coal anyway.
Mining accounts for 18 percent of the work force in Virginia's coalfields, making it the largest sector of the economy.
LENGTH: Short : 41 lines KEYWORDS: GENERAL ASSEMBLY 1996by CNB