Minutes 01/10/2017 - Laserfiche WebLink

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January 10, 2017 17 - 29 - Adoption of a resolution in support of bills presented to the 2017 Virginia General Assembly to permit casino and/or riverboat gaming in the Commonwealth and to direct the payment of certain tax proceeds from gaming for toll mitigation and for the benefit of the host localities. Vision Principles: Innovation and Change, A Robust and Prosperous Economy, Leading Maritime Community, Lifelong Learning Community, Sustainable Neighborhoods, Enhanced Quality of Life, Efficient Service Delivery, Proud Military History, Pride of Past, and Core Values. Background:  The Virginia Supreme Court’s 2013 ruling in Meeks vs. VDOT and the Elizabeth’s River Crossings, OPCO, LLC allowed for the imposition of tolls on the Midtown and Downtown tunnels beginning in February 2014. These tolls will increase annually for over 50 years. These onerous tolls negatively financially impact thousands of Portsmouth and Hampton Roads commuters that daily use these tunnels. The initial annual impact to the commuters was approximately $1,000. As the tolls increase every year, the annual impact also grows.  Following this decision, in an effort to identify a means to reduce the impact of these tolls and bring employment opportunities to the city of Portsmouth, Senate Bill 19 was introduced during the 2014 General Assembly session. The bill was styled the Virginia Toll Relief Act; Virginia Casino Gaming Commission and its purpose was to allow casino gaming in the Commonwealth under certain conditions.  This bill provided for 90% of the proceeds from taxes imposed on gaming establishments to be paid into the Toll Mitigation Fund to offset the tolls imposed for the construction and maintenance of the Downtown/Midtown Tunnels and the Martin Luther King Expressway project. The remaining 10% collected was to be placed into the newly created State Local Casino Gaming Proceeds Fund which would provide a revenue stream for the local government/s hosting the venue. The Portsmouth City Council supported this effort by resolution (R-13-61).  Unfortunately, this bill did not pass through the legislative process. Similar legislation has been submitted in each subsequent General Assembly Session, and the scope has also expanded to include Riverboat Gaming. Discussion:  Legislation is once again being introduced creating opportunities for casino or riverboat gaming in the Commonwealth. The legislation being introduced for consideration by the 2017 General Assembly has not received bill numbers yet, but will mirror the legislation introduced in the 2014, 2015 and 2016 General Assembly Sessions  The city of Portsmouth would be a direct beneficiary of these legislative initiatives. The legislation is drawn narrowly enough to provide that this city would be the host for these new venues. These venues will provide employment opportunities and new tax revenues for the city. The citizens of Portsmouth, and Hampton Roads generally that utilize the Downtown and Midtown Tunnels, would also benefit from the portion of the taxes derived from these businesses that would be used to help defray the impact of the ever increasing tolls on these two tunnels.  The city of Portsmouth is rated by the Virginia Commission on Local Government th as the 12 most fiscally stressed city in the commonwealth. Over 50% of the land mass that constitutes the city is non-taxable due to the presence of federal and state facilities as well as nonprofits. It is a built-out city with no ability to annex and limited land available for economic development. The lack of large tracks of available land provides no opportunity to attract large scale economic development opportunities. Within the next 50 years, there is a projected loss of over $8 million annually in tax revenue from Virginia International Gateway once it becomes property of the commonwealth. For these and numerous other reasons, it behooves the Portsmouth City Council to pass a resolution in support these legislative economic development efforts. Financial Impact:  Gaming venues will provide employment opportunities and new tax revenues for the city. The use of state tax proceeds for toll mitigation and for the benefit of the host city will benefit Portsmouth residents, businesses and commuters, as well as provide a direct revenue stream for the city.