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Free Lance-Star reporter Chelyen Davis covers Virginia government.

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Senate committee defers Fredericksburg baseball tax bill

MORE: Read more news from Fredericksburg

The Senate Finance Committee isn’t ready to play ball on a bill that would let Fredericksburg use sales tax revenues to pay off its planned baseball stadium parking lot.

Instead, it sent Sen. Richard Stuart’s bill to a subcommittee for further study this session, because one senator is afraid Fredericksburg will be just the first of many localities holding onto sales tax revenue from a sports complex if Stuart’s bill passes.

Stuart’s bill would allow the city of Fredericksburg — and other localities — to benefit from the public facility tax entitlement for a sports complex even if they own only a component of the complex.

As it stands now, Stuart said, Fredericksburg’s efforts to entice private capital into helping finance a new baseball stadium in the city worked so well that the city disqualified itself from using sales tax revenue generated by the facility to pay off public bonds for helping build the stadium.

Since private funds are paying for the stadium itself, the city is using about $8 million in bonds to finance the parking lot.

Without that private money, Stuart said, the city’s bonds would be more like $38 million, as the rest of the complex — stadium, fields, etc. — is estimated to cost about $30 million. But if it weren’t for the private investment, the city would also be eligible to use sales tax revenues to pay off part of the bonds, something it can’t do now because it will only own part of the property.

Without his bill, Stuart said, Fredericksburg is getting punished for being too successful.

But Sen. John Watkins, R-Powhatan, is worried that Stuart’s bill will open the door to other localities, and that if the state allows too many localities to retain a portion of sales tax revenues for capital projects, the state will feel the hurt.

“Richmond wants the same thing,” Watkins said, referring to efforts in the city of Richmond to build a new baseball complex.

“We’ve got to come up with a policy as to how we’re going to address these things,” Watkins said. “We’re going to have a line form … We’re going to diminish the amount of revenue that comes into Virginia for education.”

According to a fiscal impact statement on Stuart’s bill, the revenue loss from the bill is unknown.

Currently, 15 public facilities statewide meet the statute’s definition, the statement said. Stuart’s bill would expand the definition to include sports complexes that house minor league baseball teams as long as part of the complex is owned by the city.

City attorney Kathleen Dooley, who came to Richmond to testify on the bill, said if Fredericksburg is allowed to keep some sales tax revenue — 3.5 percentage points of the stadium’s sales tax revenue —  to repay the bonds, it would cover $250,000 a year over the 20-year life of the bonds.

The committee agreed to send Stuart’s bill to an economic development subcommittee that is chaired by Watkins, with the expectation that it will get more work this session.

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