Monday, January 25, 2010

Governor cuts spending to double opportunity fund

RICHMOND- Virginia Governor Bob McDonnell today announced that leading Republican and Democratic lawmakers will carry the budget amendments necessary to implement the job-creation proposals he outlined in his Address to the Joint Houses of the General Assembly last Monday. In the Senate the amendments will be carried by ranking Senate Finance Committee member William Wampler (R-Bristol) and Finance Committee Chairman Senator Charles Colgan (D- Prince William). The amendments in the House will be brought forward by Appropriations Committee Chairman Delegate Lacey Putney (I-Bedford). McDonnell further announced that he has identified existing funding and specific spending cuts to offset the cost of each new job-creation proposal.

In last Monday’s speech to the General Assembly, McDonnell called for greater investments in state programs that spur job-creation and economic development in the Commonwealth. The Governor noted, “Yes, we face a difficult budget cycle. The budget that I have inherited is dire, and it is unbalanced. We begin with nearly a billion dollar annual shortfall based on tax hike proposals that both parties have rejected. More spending cuts must be made. But even in the toughest of times – even now – we must have the vision and the foresight to invest in our future.”

Lieutenant Governor Bill Bolling, Chief Jobs Creation Officer, commented, “I am delighted to join Governor McDonnell and legislative leaders in supporting this aggressive jobs and opportunity agenda. These proposals will enable us to re-prioritize economic development in Virginia and invest in programs that help create jobs for Virginia families. This is the most important issue currently facing our state, and it deserves our full attention. These legislative initiatives and financial investments will send a message that we are serious about getting Virginia’s economy moving again and enable us to reach out to businesses all across the country and all around the world an encourage them to make Virginia their home.”

Speaking today about the Governor’s job-creation legislation, Senator Charles Colgan stated, “The need to create new jobs for Virginians is pressing, not partisan. The proposals made by the Governor represent smart investments in the Commonwealth’s future. I am confident that we will find broad bipartisan support for them.”

Delegate Lacey Putney remarked, “We all know who creates jobs: men and women in the private sector. We also know that government can either make their lives easier, or get in their way. These ideas will facilitate job creation and economic development. They are exactly what a smart state should be doing in a tough time.”

Senator William Wampler added, “The citizens of my Senate district, like all Virginians, are reeling from some of the toughest economic times in many years. If Richmond will give them the resources to get to work rebuilding our economy, they will. These efforts will result in real jobs and a real return on investment. I applaud the Governor for finding cuts equal to each investment he is asking the Commonwealth to make. That is fiscally responsible government.”

Delegate Kirk Cox (R-Colonial Heights), who serves as Vice-Chairman of the House Appropriations Committee, will help Delegate Putney in this effort. He commented, “This is a comprehensive approach that addresses all of the critical areas of much needed economic development for Virginia. We are committed to work together – Republicans and Democrats, House and Senate – to make this happen.”

McDonnell is calling for $50 million in new investments over the next biennium. The Governor is proposing:

· More than doubling the Governor’s Opportunity Fund in FY 2011 by increasing the state commitment by $12.1 million

· Committing $5 million in FY 2011 to a state industrial mega-site fund to attract new employers

· Using $2 million over the biennium to establish state economic development offices in major growth markets in China, India and the United Kingdom

· Supporting the fast growing bio-technology and life sciences industry by removing the $3 million cap on the Qualified Equity and Subordinated Debt Investment Tax Credit and raising it to $5 million in FY 2011; Investing $3 million in bioscience “Wet Lab” Facilities over the biennium; Utilizing $2 million to reestablish funding for the Business Incubator Program in FY 2011; Providing income tax exemption for qualified investments by technology and science startup companies in FY 2012 (cost $500,000)

· Increasing state funding for the Virginia Tourism Corporation by $3.6 million in each year of the biennium, and state funding for the Governor’s Motion Picture Opportunity Fund by $2 million in FY 2011

· Depositing the Wine Liter Tax attributable to Virginia Wine into the Wine Promotion Fund ($1.5 million over biennium)

· Improving Virginia’s business assistance services by increasing funding for the Loan Guarantee Program by $1 million in FY 2011; Continuing funding for the Business One Stop Program, cost of $1 million over the biennium; Increase the appropriation for the Virginia Jobs Investment Program by $6.5 million in FY 2011

The fiscal impact of the Governor’s investments will be offset by utilizing existing revenue sources and cutting some expenses. Specifically:

· $21 million will be available through increased revenue from Virginia’s tax amnesty program

· $500,000 from the elimination of a capital outlay contingency reserve

· $4 million by not filling vacant positions at the Department of Correctional Education

· $1.2 million by deferring equipment purchases at the Department of Corrections

· $25 million will be available through the phase-in of VRS employer contribution rate increases included in the introduced budget bill with one-half of the increase being recognized in FY2011 and the full increase being recognized in FY2012

· $5 million will come from an offset of state funding with additional federal grant funding for food stamp program administration

The Governor will lay out the rest of his “Jobs and Opportunities Agenda” tomorrow at a Richmond press conference. A media advisory will be released later this afternoon.

Posted By Valerie Garner

Categories: Finance, Politics, State Politics

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