RICHMOND — A Virginia House panel on Wednesday advanced bills that would allocate about $40 million for grants that some of the state's most powerful business, education and government interests are touting as a boon to regional economic growth.
In the three weeks since the bills were filed, lawmakers have made changes intended to address critics who questioned the wisdom of elected officials shifting funding decisions to handpicked business and education leaders who are not held accountable to voters.
Business people would still lead the GO Virginia board and councils, but board members from the Senate, the House and the governor’s cabinet would each have veto power over any projects they believe are not up to stuff.
House Majority Leader M. Kirkland Cox (R-Colonial Heights), who filed the GO Virginia grants bill, said the initiative is intended to reinvigorate a state economy that is smarting from across-the-board federal budget cuts known as sequestration and the decline in coal jobs in Southwest Virginia.
“It’s a new day,” Cox said at a news conference Tuesday. “I think the business community has recognized that they’ve got to step up. And I will say this, they know how to create jobs, I think they almost have to be at the table.”
Gov. Terry McAuliffe (D), who supports the project, put the funding in his two-year budget proposal, and there is little public opposition. In a brief meeting of the House Appropriations Committee on Wednesday, delegates unanimously agreed to move the bills to the full House for a floor vote.
The meeting came two days after the same committee heard a presentation that showed the state has spent $679 million trying to lure businesses to Virginia through performance and economic development incentives since 2010. Data show annual incentive payments have nearly tripled in the last decade, and a grant fund administered by the governor has grown 81 percent in the same time period.
“The committee will carefully review this report as it considers how much and where to invest any additional economic development spending this biennium,” House Appropriations Chairman S. Chris Jones (R-Suffolk) said Monday.
On Wednesday Jones said he supports the GO Virginia bills because they take more of a “bottom up than a top down” approach. “From my perspective, there’s an opportunity to get buy-in from the regions and you really incent them to work together,” he said in an interview.
The initiative went through several iterations before the final bills were released.
John O. “Dubby” Wynne, chairman of the Hampton Roads Community Foundation and former chief executive of Landmark Communications, has been the primary driver of the program. He sits on the Virginia Business Higher Education Council, which hired the lobbying giant McGuireWoods to craft the bills, with input from lawmakers.
According to documents obtained through an open records request, as of April, organizers suggested marketing the project with the moniker Virginia Initiative for Growth and Opportunity in Each Region, or “VIGOR.”
At the time, the proposal included four components. Incentives for "efficiency-enhancing joint services and purchasing" and "capital projects of regional economic significance" are no longer part of the project, which since June has been referred to by the name "GO Virginia."
And as late as October, the program would have rewarded not just the localities that lure companies to Virginia but also the companies themselves with 40 percent of income tax revenue.
Despite the nearly universal support for the final product, one contrarian delegate filed a budget amendment that would redistribute the GO Virginia money to counties and cities for transportation projects. The money would be divvied up first by population and then competitively – an identical breakdown as the one proposed in the grant program.
Del. Robert G. Marshall (R-Prince William) said “self-appointed business-slash-government groups” should not be in charge of the dollars.
“Let the localities have it instead of these burgeoning socialists we have within the General Assembly,” he said. “Why should we be in the business of business? We shouldn’t.”
