Story and photos by Eric Gorton, senior contributor
Democrats and Republicans will continue to clash in Richmond when the next session of the General Assembly convenes in January, but with a Republican governor at the helm and a Republican majority re-established in the House, representatives of two statewide business groups see cause for optimism.
“There will be an awful lot of horse trading. There will still be bills introduced that this community, especially my organization, will not like. There’s some that you will,” said Kyle Shreve, executive director of the Virginia Agribusiness Council.
Shreve spoke about the upcoming session on Tuesday, at an annual Pre-legislative Session Forum hosted by the Harrisonburg-Rockingham Chamber of Commerce and the Shenandoah Valley Technology Council. He was joined by Nicole Riley, Virginia director of the National Federation of Independent Business (NFIB).
About 35 people attended the event at James Madison University, including Del. Tony Wilt (R), Del. Chris Runion (R) and state Sen. Emmett Hanger (R). Representatives of U.S. Sen. Tim Kaine (D), Rep. Ben Cline (R) and state Sen. Mark Obenshain (R) also attended.
Like Shreve, Riley is cautiously optimistic that legislation will be more favorable to business in the upcoming session. NFIB has received some help from Democrats in the Senate the last few years, she said, but the House has presented challenges since Democrats won control of the chamber in 2019.
“A lot of the issues I have dealt with in the last few years have all fell into the labor employment bucket,” she said. “There have been 20-30 bills that tell you as a business owner how to run your business when it comes to your employees, when it comes to how you do your scheduling, how you pay them, everything. For years we were successful in batting those down and then Democrats took over. A lot of the issues, we will still see them, but hopefully we won’t be seeing them move forward like we have.”
Among the key issues facing NFIB during the upcoming session, Riley said, is maintaining tax relief for businesses. In 2020, the General Assembly passed legislation conforming with federal tax laws that allowed taxpayers to claim a federal deduction for business expenses funded by forgiven Paycheck Protection Program (PPP) loan proceeds. Virginia’s conformity legislation limited the deduction to $100,000.
Virginia does not currently conform to federal tax legislation enacted during 2021, including the American Rescue Plan Act, because the state’s date of conformity is fixed at December 31, 2020.
If the state does not conform again, businesses will not get the same tax benefits they received last year, Riley said. “We are pushing to have the PPP treatment again for tax year 2021.”
Another important issue for NFIB is unemployment insurance. Going into the pandemic, the state had $1.4 billion in a trust fund for unemployment, but that quickly disappeared. Riley said employers were facing a quadruple increase in their payroll taxes this coming January until the General Assembly stepped in and restored the trust with money from the ARPA.
But issues remain, especially due to insurance overpayments and payment on fraudulent claims – perhaps to the tune of $1 billion. “We’re looking to see if legislation is needed to address those issues,” Riley said, adding that she does not know yet what impact that will have on tax rates for employers. The General Assembly could turn to some unallocated ARPA funding to make sure employers don’t take a hit due to overpayments and fraud.
On the labor and employment front, NFIB wants to freeze the minimum wage at the $11-an-hour rate that will take effect January 1 and wants to align the state’s overtime rules with federal law. Since July 1, Virginia employers have been subject to a new state overtime law that provides more stringent overtime requirements than those contained in the federal Fair Labor Standards Act.
Riley said the new state law changed the way overtime is calculated, which has led to confusion. The General Assembly tried addressing it in budget language, she said, but it was temporary and didn’t go far enough.
A fourth item on NFIB’s list is pushing to repeal the state’s COVID 19 workplace safety permanent regulations. Riley said Virginia is among a small number of states that passed such regulations, which go beyond CDC guidance and create confusion for employers. “We’re working to see if we can get that repealed, whether it’s legislative or working with Governor-elect Youngkin in maybe his first 100 days,” Riley said.
Like Riley, Shreve said COVID-19 regulations need to be addressed to reduce confusion. The regulations have been particularly difficult in agricultural settings, he said, leaving many in the dark about whether they are in compliance.
Land use for solar installations is another key concern for the Virginia Agribusiness Council. Shreve said he gets calls almost daily about the issue. “It is incredibly tough for an organization like mine that is caught in the middle of these,” he said, noting the organization’s members include both farmers and power co-ops.
A major concern, Shreve said, is that the onus for siting solar has been dumped on localities that are provided little information and that lack technical expertise.
“We have a huge problem when it comes to rented land,” Shreve said. There have been a number of instances where absentee landowners have decided to end leases with farmers to take money from solar companies. They end leases with farmers who all of a sudden have lost half their available acreage for either their livestock or their planting.
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