RD324 - Report on Business Incentives 2007-2008 -- October 30, 2008


Executive Summary:
In the 2008 Appropriations Act, the General Assembly directed the Secretary of Commerce and Trade to report to the Chairmen of the Senate Finance Committee and House Committees on Appropriations and Finance “on the use and efficacy of state incentives in creating investments and jobs in Virginia.” (*1) In apparent recognition of the wide range of programs offered by the Commonwealth and its localities, the General Assembly asked that “for the purposes of this report, the incentives to be reviewed in the study are those incentives included in the Virginia Economic Development Partnership’s (VEDP) publication, Virginia Guide to Business Incentives 1997-98." Thus, incentives offered by local governments and various other means of recruitment and expansion are not listed herein. (*2)

Governor Kaine has demonstrated his commitment to expanding and sustaining economic development in all areas of the Commonwealth. As Secretary of Commerce and Trade, I am pleased to report that Virginia has enjoyed tremendous success in economic development this year.

Despite this success, we must not rest on our accomplishments. Instead, we must ensure that we obtain the maximum return on our investment, both in the use of incentives and with any other economic development measures. Moreover, we must be vigilant to maintain our competitive edge. Our competitors, both in our region and across the nation and the world, are finding new ways to attract and retain business through fiscal and other policies.

This report, as requested, is a compilation of results from the last fiscal year. These results demonstrate an effective record of economic development in terms of investment and job creation. The multiplier effect in the communities, including other industries attracted as a result of the new or expanded business, makes these results even more significant. Of course, in analyzing incentives, we must examine the total Virginia effort rather than only looking at each separate program in a vacuum.

There are many examples of Virginia’s economic development successes, and they receive a more detailed presentation in the Annual Report of the VEDP. This report is available on the VEDP website at http://www.yesvirginia.org/About_Us/Library.aspx.
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(*1) Chapter 879 of the 2008 Virginia Acts of Assembly, Item 106 B.
(*2) Recruitment often generates an entire negotiated range of activities, which can include private activity bond allocation, advantageous utility rates, regulatory assistance, proposed legislative changes, assistance in accessing private capital, and assistance with environmental certifications and permitting.