Economic Development Grant Committee Faces Legal Hurdle
If there’s one point every legislator in West Virginia agrees on, it’s
the need for economic development. But every one of the 134 lawmakers at
the Statehouse probably has a different idea of the best way to achieve economic
prosperity. One approach, distributing funds through the state’s Economic
Development Grant Committee, has been the focus of much attention.
During the final moments of our recent special session, the Legislature adopted
a bill intended to resuscitate the economic development grant project effort,
which faces significant legal challenges.
Based on an earlier state Supreme Court ruling, Gov. Bob Wise proposed new
legislation that reconfigures the original grant committee, which is charged
with deciding what projects will be funded with about $215 million in proceeds
from a bond sale that is to be repaid with $19 million a year in video lottery
revenue. After some debate over other potential changes, the Legislature
passed the bill.
Unfortunately, even though the newly formed grant committee will comply with
Supreme Court’s decision, members won’t be able to distribute funds until
another legal challenge questioning the use of video lottery revenue is resolved.
As long as that funding mechanism is being challenged, the state will be
unable to sell the bonds.
But the state plans to forge ahead. Gov. Wise has said he will quickly reappoint
the grant committee, which will then reconsider all projects that were on
the table last year, when the first grant committee was formed.
The current effort began during the 2002 legislative session with legislation
creating a committee to select projects throughout the state. Because of
a court challenge and the ensuing state Supreme Court decision declaring
the structure of the committee unconstitutional, Gov. Wise added the issue
to his call for a special session regarding Workers Compensation.
Once the grant committee is up and running again, it will be up to members
to decide whether any new proposed projects can also be considered.
The concept of such a grant committee isn’t new. In the mid-1990s, the Legislature
decided to sell bonds, using lottery funds to repay the debt, and direct
the money toward a host of projects, including the Clay Center for the Arts
and Sciences in Charleston and Stonewall Jackson Lake conference center in
Lewis County.
In adopting the latest bill, the Legislature included a provision that allows
the committee to allocate funds for repairs at the state Capitol Complex,
as well as a new stipulation that if the grant committee decides to create
a revolving loan fund, the Legislature must grant final approval of any loans.
In response to the funding challenge, Gov. Wise’s administration suggested
shifting the grant funding from video lottery revenue to revenue from traditional
lottery games until the lawsuit is resolved. But because the traditional
lottery account is used to pay for school construction bonds, many
legislators didn’t want to jeopardize that funding stream in any way.
The funding issue aside, some state officials have predicted there may be
an additional court challenge based on our new legislation, so it’s difficult
to predict how long it will take to clear all the legal hurdles.
In passing the grant committee bill, the Legislature concluded a seven-day
special session that was split into two parts, the larger portion of which
took place in June. Although the primary reason for convening the special
session was to adopt a massive piece of legislation to address the Workers
Compensation crisis, the Legislature also approved some supplemental appropriations,
passed legislation to bring the state into compliance with federal tax laws,
and made technical changes to legislation adopted during the 2003 regular
session.
I welcome and appreciate your input on these issues, or any other legislative
matter. Please call me at (304)340-3106 or write to Delegate Virginia Mahan,
215-E, Capitol Complex, Charleston, WV 25305.