RD311 - Placement and Structure of the Virginia Jobs Investment Program (VJIP)

Executive Summary:
*This report was replaced in its entirety by the Secretary of Commerce and Trade on December 3, 2013.

As a continuation of Governor Bob McDonnell’s Government Reform and Restructuring initiative started in 2010, the 2013 Session of the General Assembly enacted Chapter 482 of the 2013 Virginia Acts of Assembly creating the Department of Small Business and Supplier Diversity (DSBSD), effective January 1, 2014, by consolidating the powers and duties of the Department of Business Assistance (DBA) and the Department of Minority Business Enterprise (DMBE). In addition, the Governor proposed legislation to move the Virginia Jobs Investment program from the Virginia Department of Business Assistance to the Virginia Economic Development Partnership that manages the major economic development incentive programs for the Commonwealth – supported by the Virginia Chamber of Commerce, Virginia Economic Developers Association and the National Federation of Independent Businesses, among others. The General Assembly included budget language in Chapter 806 of the Acts of the Assembly to review the VJIP program and “whether the Virginia Jobs Investment Program Funds are best managed within the Department of Business Assistance or within the Virginia Economic Development Partnership or whether the separate sub-funds would be more effectively utilized by the two separate agencies whose missions focus on different sectors of the Commonwealth's business community.”

Workforce development is the top issue facing existing Virginia businesses and those being recruited to the Commonwealth. The Virginia Jobs Investment Program (VJIP) encourages the expansion of existing Virginia businesses and the start-up of new business operations in Virginia by addressing the top concern of existing businesses and economic development prospects – finding and developing a skilled workforce. VJIP helps offset recruiting and training costs incurred by companies that are either creating new jobs or implementing technological upgrades. In addition to offering direct funding, VJIP also provides assistance with workforce-related challenges and organizational development workshops.

There are five components of VJIP:

• Small Business Jobs Grant Fund Program (SBJGF): assists Virginia small businesses in job creation;

• Small Business New Jobs: supports the establishment or expansion of Virginia's small businesses;

• Small Business Retraining: improves the efficiency of small businesses through workforce retraining;

• Virginia New Jobs: supports the expansion of existing Virginia companies and new facility locations involving competition with other states or countries; and

• Workforce Retraining: provides consulting services and funding to assist companies and businesses with retraining their existing workforces to increase productivity.

The Virginia New Jobs program has been the top distributor of funding to businesses for the past four years. This program and the Workforce Retraining program are the two VJIP programs not specifically focused on small businesses, and the combined funding distribution of these two programs reflects about 80 percent of VJIP’s payments to businesses over the past four years.

Incentive requests through the Virginia Economic Development Partnership (VEDP) and the local economic development offices represent about 80 percent of the VJIP funding distribution. Distribution is consistently made through requests from regional economic development offices, directly from the companies who are creating jobs, and community colleges.