McDonnell Boasts Job, Economic Development Growth

Investing in job creation and economic development incentives will be key to Virginia's recovery. Those were the words spoken by Gov. Bob McDonnell before a crowd of nearly 500 at the Loudoun County Chamber of Commerce's annual meeting Thursday.

The governor, who took office Jan. 16, began his remarks joking that he'd already solved the global warming crisis in less than a month in office.

"Since I've been governor it's snowed every week," he quipped.

Facing a $4 billion budget shortfall, McDonnell said the state was facing both great opportunities and tough challenges. Like his pre-election address to the Chamber last October it was those opportunities on which McDonnell focused much of his speech.

And while he talked a lot about the need to create jobs, his speech skirted entirely the top concern of Loudoun's political and business leaders in recent weeks: the proposal to freeze the Local Composite Index that determines the allocation of state education funds. The freeze, proposed by outgoing Gov. Tim Kaine, would cost Loudoun $34 million in anticipated funding, putting the jobs of hundreds of teachers and other school employees at risk as county supervisors struggle with a FY11 budget shortfall that already is projected to be $192 million at the current tax rates.

Calling Loudoun County "a great place to do business," McDonnell said he hoped several economic development initiatives he is pushing will only help spread that reputation.

"We want to do everything we can to help you grow and expand. The only way we're going to find a way out of [the down economy] is through economic development and creating jobs. We're getting right about the business of doing that," the governor said.

McDonnell said he is pushing for the creation of $55 million a year in new economic development incentives.

"Everybody gets it. It's about jobs," he said, noting that this has received a large amount of bipartisan support.

Despite Virginia being known as the most business-friendly state in the nation, McDonnell said the commonwealth is still "way behind others" when it comes to business tax credits, incentives and other things that attract businesses to locate here.

He said he hopes to expand the Governor's Opportunity Fund by $12.1 million, up from $15 million, to offer more of these types of credits and wants to relax the restrictions on the use of monies in the fund. McDonnell proposes to waive or reduce some local matches for use of the fund, as he noted that not all localities can do this. He is also hoping to lower the major jobs facilities tax credit and expand the enterprise zone tax credits.

McDonnell also said growth of small businesses was just as critical to the state's overall health.

"We want to be the place in America for small businesses to start and stay," he said.

He said this could be accomplished with increased tax credits and regulatory changes, and also by waiving fees for veterans to start their own small business. McDonnell also said he is hoping to create a Small Business Investment Fund to give these businesses better access to capital.

Virginia needs to be prepared for the next big corporate relocation, McDonnell said.

"We've got to have a mega site ready to go. We don't have it," McDonnell said. He wants create a $5 million fund to do that. "We need to be able to drive the executives from the airport to the site and say 'all that's missing is you'."

Also touted as possibilities were three-year income and capital gains tax exemptions for technology and science companies, and monies set aside for biotech companies.

McDonnell also was thinking Hollywood, saying he wanted to target the film and motion picture industry by setting aside tax credits for films produced in the commonwealth. He pointed to the filming of the movie about a Virginia horse, Secretariat, with a Virginia director.

"It's being filmed in Kentucky and Louisiana. That's just plain wrong," he said.

Incentivizing movies to be produced in the state can mean the creation of upwards of 200 jobs and around $26 million in revenue.

McDonnell also said he wanted to funnel money into the tourism and wine industries through set-aside funds.

He also said he looked forward to the beginning of off-shore drilling in Virginia, slated for next year, that he predicted would create thousands of jobs and hundreds of millions of dollars in tax revenues. By becoming the first state in the nation to do so, McDonnell said Virginia could set itself apart as a leader in energy and alternative energies.

Before ending his remarks, McDonnell reminded the group of business and community leaders in attendance that times were still tough for many Virginians and implored them to be "responsible corporate citizens" and remember local nonprofits that cater to the underserved and needy population.