RD298 - Report on Business Incentives 2012-2013

Executive Summary:
Through the 2012-14 Appropriation 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 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 as well as business incentive programs authorized and funded by the General Assembly." Incentives offered by local governments and certain various other means of recruitment and expansion are not listed herein. (*2)

Governor Bob McDonnell has demonstrated his continued commitment to recruiting new jobs to all areas of the Commonwealth. As Secretary of Commerce and Trade, I am pleased to report Virginia has enjoyed significant success in economic development this year, even while the national economy experiences slow growth and the country endures the effects of federal budget uncertainty.

We must continue to ensure we obtain the maximum return on our investment, both in the use of incentives and with any other economic development measures. We must also be vigilant to maintain our competitive edge in an increasingly competitive global economy. Our competitors in neighboring states, across the nation and around the world are finding new ways to attract and retain business through innovative policies.

This report 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. 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/ToolsResources/Library.
(*1) Chapter 806 of the 2013 Virginia Acts of Assembly, Item 104 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.