Schapiro: Business gives Virginia the business

In the 1970s, a common sight across the state was a bumper sticker that read, "Welcome to Virginia: Owned and Operated by Vepco."

Thirty years later, Vepco -- the Virginia Electric and Power Company -- has a new name: Dominion Virginia Power. One JEFF E.
SCHAPIRO
thing hasn't changed: The utility, along with other big businesses, uses fat contributions and aggressive schmoozing to manipulate state government as if it were a corporate subsidiary.

So while the world beyond Capitol Square is in a snit over the excesses, perceived and actual, of the corpocracy, Virginia's governor and legislators, actual and prospective, seemingly remain as pliant as freshly neutered kittens still woozy from anesthesia.

This, despite an economic crisis that has forced the state since April 2007 to cut spending by $7.5 billion. Reductions include supposed sacred cows for business, such as universities and transportation. Yet many taxpayer-supplied goodies that improve corporate balance sheets remain untouched.

Some are tax breaks. Others are subsidies. These handouts endure, in the spirit of sparing the goose that lays the golden egg -- and cuts a check come election season.

Dominion Virginia Power, a source this year -- through the corporation and its executives -- of nearly $590,000 in political contributions, shares with other utilities a $3-per-ton tax credit on purchases of Virginia coal. That, along with separate relief for mine operators, is draining $44.5 million a year from the state treasury.

John Chichester tried for years to junk the coal credit as a sop to a dying industry. Doing so would have had put him at odds with his roommate and then-No.2 on the Senate Finance Committee: William Wampler.

If power companies don't take the credit against their Virginia income taxes, they can still benefit. That's because the law allows them to sell to mine owners unused, scaled-back credits. However, the more credits sold is a sign utilities have pruned their tax bills in more significant ways, including depreciation.

For 2008, in filings with the Securities and Exchange Commission, Dominion Virginia Power -- a company with a pre-tax income of $1.4 billion on revenue of $6.9 billion -- reported only $37 million in current state income taxes.

Then there's the Rolls-Royce jet-engine plant outside Hopewell, announced after a largely secret courtship that state economic-development officials dubbed "Project Corvette."

In what might seem like a Cadillac of a deal, the state is on the hook for $108 million in incentives over 15 years. In return, Rolls-Royce is supposed to invest at least $500 million and generate a minimum of 540 jobs.

Hard times compelled legislators, eager to protect basic services, to recommend substituting Obama stimulus funds for $9.4 million in state revenue. Neither Rolls-Royce nor its lobbyists were happy with this. They worried it signaled a reduction in the state's commitment. Ultimately they went along, because all money is green.

Then there's Northrop Grumman. The company, whose largesse includes $25,000 to each gubernatorial candidate, will lap up $25 million annually in state grants for a training program at its Newport News shipyard.

Now, if Northrop Grumman can only keep afloat its disputed 10-year, $2.3 billion contract with the state for computer services . . .

Contact Jeff E. Schapiro at (804) 6496814 or . Watch his video column Thursdays on TimesDispatch.com. Follow him at twitter.com/RTDSchapiro. Listen to his analysis Fridays at 8:33 a.m. on WCVE (88.9 FM).