SD8 - Review of State Economic Development Incentive Grants
Senate Joint Resolution 329 of the 2011 General Assembly directed the Joint Legislative Audit and Review Commission (JLARC) to review the effectiveness of economic development incentive grants available in Virginia and propose a process for the ongoing evaluation of their effectiveness.
JLARC staff found that Virginia approved nearly 3,400 economic development incentive grants totaling $718 million during the last ten years. Most awards were relatively small, but seven businesses each received awards in excess of $20 million.
Grant projects collectively created more than 68,000 jobs during the past decade. Most of the projects that were awarded a grant met the performance goals to which they committed, but their potential impact on the Virginia economy appears to vary by grant program. Overall, however, the grant programs are expected to have a positive impact on Virginia’s economy and revenues, even though incentives may sway only a small percentage of businesses’ site selection decisions.
Several grant programs use effective practices that contribute to their success, but those practices are not used consistently by all state agencies that administer the grants. Most programs could use additional practices to help them achieve their goals.
JLARC staff found that no comprehensive information encompassing all grant programs is currently available to policymakers, and a more comprehensive evaluation and reporting process should be developed.