Virginia Gov. seeks to amend casino bill in order to fund school construction

Virginia Gov. Ralph Northam on Saturday proposed a policy amendment to legislation that would allow casinos by referendum in Virginia, sending the matter back to the General Assembly.

The governor had until midnight Saturday to act on Senate Bill 36 and House Bill 4, to allow five economically challenged cities — Bristol, Danville, Norfolk, Portsmouth and Richmond — to hold a public referendum for city residents to decide if they wanted one privately owned casino to operate there. The legislation was overwhelmingly approved last month by bipartisan majorities in both the Virginia House and Senate.

Northam wants to assign the state’s portion of new tax monies on gaming revenues to fund public school construction needs statewide, Carter Hutchinson, deputy policy advisor, told Bristol Herald Courier on Saturday. Two other amendments are minor technical language changes.

“The governor is going to amend that provision of the bill that says roughly two-thirds of the [tax] revenue goes to the general fund,” Hutchinson said. “He is going to amend that language to designate the funding go to school construction, renovation and repairs. The language is going to be relatively broad given the revenue from the casinos won’t start coming in for at least a couple years, probably more.”

State lawmakers are scheduled back in Richmond on April 22 for the reconvened session. If they approve the Northam amendments, the legislation becomes law and communities could hold referendums on Nov. 3. If the General Assembly rejects the amendments — to which they cannot make changes — the underlying legislation returns to the governor to either sign or veto.

The policy amendment won’t specify details of how the funding process would work. And it would only apply to gaming tax revenues coming to the state, Hutchinson said, not those designated for the localities.

Gov. Northam was expected to sign other legislation Saturday that sets up a bipartisan commission to examine school construction issues, look at all potential revenue streams including casinos — if this approved by the General Assembly — and present its findings. “The governor intends to put this marker down and say, when this revenue comes in, it should go to school construction, as determined by the General Assembly,” Hutchinson said.

A 2019 study by Virginia’s Joint Legislative Audit and Review Commission forecasts the five proposed casinos could generate more than $900 million within five years and a Bristol casino could annually generate $15 million for the state and $7.8 million for the locality.

“The total projections that JLARC made for 2025 is about $970 million that all the casinos collectively together might make in collective profit. With the tax brackets in the current bill, about $114 million would go to the general fund for the state and about $65 million of that would be broken up among those municipalities with the five casinos,” Hutchinson said.

Sen. Todd Pillion, R-Abingdon, one of the patrons of the legislation, said Saturday he wants to study the proposed change.

“All along we’ve discussed the necessity of this project to ultimately be approved by local voters and have a positive impact on the local community,” Pillion said in a message. “We want revenues to be used for the benefit of our schools, roads and public safety right here at home. While I will be reviewing the exact implications of this amendment, this is a process that has been more than two years in the making. It’s time that we move forward and let the people have the final say.”

The Bristol project, proposed by local business leaders Jim McGlothlin and Clyde Stacy, would bring in Hard Rock International to operate a proposed $400 million Hard Rock Bristol Resort and Casino at the Bristol Mall. “We will continue our efforts to get this historic legislation passed to bring relief to Bristol, our region and the four other cities named in the legislation,” according to a statement from the Bristol casino team. “The governor’s actions do not impact our ongoing planning for the Hard Rock Casino Bristol, as a world-class destination resort that will bring thousands of new jobs and millions of dollars in local tax revenue.”

Gaming tax revenues from a Bristol casino would be divided among Bristol and the counties included in the Virginia Department of Transportation’s Bristol service district — Bland, Buchanan, Dickenson, Grayson, Lee, Russell, Scott, Smyth, Tazewell, Washington, Wise and Wythe — as the legislation would establish the “Regional Improvement Commission,” which would receive and distribute those monies.