- The Washington Times - Thursday, July 16, 2009

RICHMOND | Three Republican legislators and the state GOP chairman on Wednesday said that inattention by Democratic Gov. Tim Kaine to a tax issue cost Virginia an Apple computer data center that, instead, went to North Carolina.

Delegates Scott Lingamfelter and Tommy Wright, state Sen. Frank Ruff and party Chairman Pat Mullins said Mr. Kaine failed to fix a flawed amendment that could have exempted Apple from sales taxes on equipment needed for its $1 billion expansion.

Apple, famous for its distinctive computers, iPod music players and iPhones, had considered two sites in Southside Virginia, a region of dwindling tobacco farms and shuttered textile factories wracked by unemployment.

It’s the latest in a series of election-year Republican attacks on Mr. Kaine’s dual roles as governor and Democratic National Committee chairman. Apple was lost, they contend, because Mr. Kaine was distracted from his state duties by the partisan post President Obama appointed him to in January.

“We were in a position to stay engaged and stay in the hunt literally up until the end,” said Mr. Lingamfelter, Prince William Republican. “If a portion of time was available for him to work on Apple that he wasn’t running around doing these other things, would we have had a different result?”

The technology giant is expected to only employ about 50 people full time in the Charlotte, N.C., region to operate and maintain a vast collection of servers able to process tremendous amounts of data traffic. That doesn’t count spin-off jobs in services such as cleaning, maintenance and transportation, nor does it count as many as 3,000 construction jobs for building the data center.

Apple, however, never committed to build in Virginia, and North Carolina was always considered the front-runner because of its tax structure, Mr. Ruff said.

Mr. Kaine was in Los Angeles on a trip that included state business and attendance at ESPN’s annual ESPY awards to sports figures from the past year, said Kaine spokeswoman Lynda Tran.

“Gov. Kaine was extremely engaged in the negotiations,” Ms. Tran said.

Mr. Kaine’s hand in such talks helped account for $5.7 billion in new investments in Virginia during the past year, she said, including new corporate headquarters for Hilton hotels, Volkswagen and paper and packaging giant Mead-Westvaco.

To entice Apple, Mr. Kaine amended a bill passed during this year’s legislative session that exempted some food processing from the state sales and use tax. Mr. Kaine extended the exemption to various computer gear that would benefit Apple. Lawmakers approved the amendment unanimously in April. The state Department of Taxation, however, ruled that the amendment would not cover non-computer equipment Apple needed for the facility, including generators to supply electricity in a power outage and huge coolers too keep the servers from overheating.

Mr. Ruff and Mr. Wright said they appealed to the governor to call a brief special session of the General Assembly to tweak the legislation so it would cover everything Apple wanted, but Mr. Kaine never did so.

“When I found out there were hang-ups within the administration, I called and spoke to somebody in the governor’s office and I asked that we have a … one-day special session just to deal with this so we could compete with North Carolina,” Mr. Ruff said. “That suggestion was not accepted.”

Questions about Apple are part of the continuing Republican strategy to diminish the governor’s job-approval rating and handicap his ability to aid Democrats running this fall for governor and contested House of Delegates seats.

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