RTD: “It’s about growing jobs for Virginia, high paying jobs”

By October 14, 2016Uncategorized

New Virginia panels vow ‘laser focus’ on creating higher-paying jobs

Posted: Wednesday, October 12, 2016 10:15 pm

Two new state panels, backed by more than $100 million in investments in higher education research and regional economic development initiatives, have begun work with the same four-letter mission: jobs.

Faced with a teetering economy and a projected $1.48 billion revenue shortfall, the Virginia Growth and Opportunity Board and the Virginia Research Investment Committee each met for the first time on Wednesday to reverse a troubling trend in which the state is creating more jobs of less value to the economy.

“We need a laser focus on creating higher-paying jobs, period,” declared John O. “Dubby” Wynne Jr., a retired Hampton Roads executive who was elected chairman of the GO Virginia board of directors, a high-powered group of 24 senior business leaders, state legislators and Cabinet officials.

 

Wynne also is a member of the research investment committee, established as a top priority of Gov. Terry McAuliffe and General Assembly budget leaders to invest in cutting-edge research by Virginia’s public colleges and universities in technologies with high commercial potential, including cybersecurity and neurosciences.

 

McAuliffe is “looking for diversification — not just research for research’s sake,” said Secretary of Finance Richard D. “Ric” Brown, who also serves on both panels.

 

“Bottom line, hopefully it creates jobs — high-paying jobs — and diversifies the economy,” Brown told the research committee at the State Council of Higher Education for Virginia, which will administer the initiative.

 

McAuliffe will announce plans today on how he will address a projected revenue shortfall of $843 million in this fiscal year alone. The state’s Rainy Day Fund and canceled employee raises are expected to cover all but $340 million of the shortfall, which the governor will have to make up with cuts in spending in the first year of the two-year budget that took effect July 1.

 

McAuliffe is not likely to cut new investments in higher education research and the GO Virginia initiative, most of which isn’t budgeted to be spent until the next fiscal year, which will begin on July 1.

 

“It is fortunate that it is backloaded,” Brown said in an interview after the research investment committee meeting.

 

The research and economic development initiatives also are high priorities for McAuliffe, he added. “He’s indicated that we need to protect the things that move Virginia forward.”

 

McAuliffe will address decisions about spending in the second year in the budget amendments he presents in December. The General Assembly will address them when it convenes in January for a 45-day session.

 

The Democratic governor and Republican-controlled legislature agreed this year that state investment in job-generating initiatives is essential as Virginia struggles to recover from the double whammy of a severe recession and federal budget sequestration.

 

Sequestration made deep cuts in military and federal civilian jobs that have been the mainstay of the state economy and tax revenues.

 

Sequestration could return with the expiration of a two-year federal budget deal in September, but Virginia is still dealing with the fallout from federal spending cuts that began in 2011 and accelerated in 2013, leaving the state trailing the nation in economic growth and eliminating billions of dollars in economic value.

 

“It set us on a path which continues to affect the state today,” George Mason University professor Stephen S. Fuller told the GO Virginia board.

 

Well-paid jobs in manufacturing and construction disappeared in the recession and haven’t been replaced, said Fuller, senior adviser and director for special projects at the GMU Center for Regional Analysis.

 

Virginia gained 335,000 private-sector jobs from the recession through August, but lost $6.3 billion in value to the gross state product. The loss doubles — to $12.7 billion — when the value of the new jobs is compared to the value of those that were lost.

 

“What has happened is the job mix has changed,” Fuller said.

 

The state felt the effect of the shift this year, as payroll income tax collections grew much more slowly than expected, despite a decline in the jobless rate to 3.9 percent.

 

The GO Virginia and research initiatives are the state’s response to the challenge of stimulating new industries that will create higher-paying jobs.

 

Wynne and other powerful business leaders, including Dominion CEO Thomas F. Farrell III, aggressively pushed for legislation to create GO Virginia and a companion measure that would create regional councils that could compete for funding of collaborative projects that, if successful, would return revenues to the localities involved.

 

“This actually gives localities the opportunity to get some money if they create jobs,” Wynne said.

 

The budget includes $5.5 million to organize the initiative in this fiscal year and $30 million in the second year to fund regional economic development projects that involve at least two local governments.

 

GO Virginia has created a nonprofit foundation to assist the board in fundraising, outreach, and policy support.

 

The first year of work will focus on creating councils in nine regions that the board defined on Wednesday. The regions range in population from 2.4 million in Northern Virginia to less than 380,000 in Southside, but Vice Chairman Benjamin J. Davenport Jr., a business leader in Pittsylvania County, said he isn’t worried about the imbalance in scale among the regions.

 

“It is what it is,” said Davenport, who described the growing interest in collaboration among Southside localities as “a change in the way people think.”

 

Collaboration also is central to the state’s big investments in research at public colleges and universities. Those investments include $22 million to attract faculty with potential “moonshot” research, as well as $29 million in bond funding for research facilities and equipment.

 

The investment fund also would receive any revenues from the potential sale of the state’s Center for Innovative Technology campus in Herndon, which would be used to fund $4 million a year in research projects.

 

Separately, the state has allocated $20 million in bonds to renovate the former Exxon/Mobil campus in Springfield and equip it for the Global Genomics and Bioinformatics Research Institute at the Inova Center for Personalized Health.

 

The budget also includes $8 million to fund incentive packages for research faculty at the institute, which would require collaboration among public colleges and universities.

 

“We should be funding research that has commercial potential,” said James W. Dyke Jr., senior adviser at McGuireWoods Consulting, a former state education secretary and SCHEV director.

 

The budget establishes a process to ensure that research projects are vetted by outside experts before they are funded. “This is the conversation that has to be had if Virginia is going to be competitive in the future,” said Mike Grisham, CEO of the Virginia Biosciences Health Research Corp., one of those peer review organizations.

 

Patricia M. Dove, a Virginia Tech professor who is president of the Virginia Academy of Science, Engineering and Medicine, another peer group, said she has a simple explanation when she tells her mother in Bedford of her work.

 

“It’s about growing jobs for Virginia, high-paying jobs,” Dove told the committee. “She understands that.”

 

 

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