Gubernatorial Hopeful McDonnell on Job Creation

August 10, 2009

McDonnell Focuses on Job Creation in Visit to Southside
At Morning Press Conference Unveils: "Economic Vision for Rural Virginia: Good Jobs Everywhere"

-Plan Includes Coordinated Statewide Effort to Bring New Economic Opportunity and Prosperity to Rural Virginia-


RIDGEWAY- Bob McDonnell, Republican gubernatorial nominee and former Attorney General of Virginia, today unveiled a comprehensive plan to bring new jobs and more opportunities to rural Virginia. He announced his plans during a press conference held at Blue Ridge Aquaculture in Henry County, where the unemployment rate is 15.4%. Ridgeway is just outside Martinsville, a city struggling with a 21.6% unemployment rate, the highest in the state. McDonnell's plan emphasizes the need for a coordinated statewide effort to spur growth in rural Virginia, noting the importance of putting individuals in Virginia's rural cities and counties at the helm of these efforts. The plan highlights the need for bold action to overcome current economic challenges, and builds off of plans McDonnell has already unveiled relating to small businesses, education and energy.

The Highlights of Bob's "Economic Vision for Rural Virginia: Good Jobs Everywhere" Plan include:
· Making Virginia the best state in America in which to open a small business
· Establishing a HUBZone Empowerment Contracting program to spur job growth and economic development in historically underutilized business zones
· Designating one Deputy Secretary of Commerce and Trade to focus solely on rural economic development
· Creating a Governor's Rural Virginia Taskforce to ensure cooperation among agencies
· Fully utilizing the Center for Rural Virginia
· Providing a $1,000 tax credit per job to businesses that create 50 new jobs, or 25 new jobs in economically distressed areas
· Expanding use of the Governor's Opportunity Fund by roughly doubling the funding available and broadening Fund rules to allow companies that generate additional state and local tax revenue to qualify
· Establishing academic opportunities in K-12 and higher education that train a workforce in transferable skills, and expanding existing programs to every area of rural Virginia
· Developing a comprehensive infrastructure plan
· Making Southwest and Southside Virginia the nation's hub for traditional and alternative energy research and development
· Promoting farm preservation, championing agriculture issues, and reviewing over-burdensome regulations and Executive Orders
· Fighting for the permanent elimination of the death tax at the federal level

Speaking about his proposals to launch a coordinated statewide effort to bring economic revitalization to rural Virginia, McDonnell remarked, "Most Virginians have been impacted by this economic downturn and we are all anxious about what the future holds. Many of our rural communities have been hit the hardest. Here in Henry County unemployment tops 15.4% and in neighboring Martinsville the unemployment rate is the highest in the state at 21.6%. The people of Ridgeway, and all of rural Virginia, are hard working, innovative, and talented. What they need are the new jobs and opportunities that will allow them to achieve their dreams, and grow our economy. From manufacturing to dairy farms, I know that rural Virginia will be a key part of the economic resurgence that we will create in the Commonwealth. I will be a jobs governor. Working together, across party and regional lines, we will bring new jobs and greater opportunities to rural Virginia."

McDonnell continued, "In my administration I will enact specific policies geared toward job creation in rural Virginia. We will designate one Deputy Secretary of Commerce and Trade to focus exclusively on rural Virginia. This individual will have one simple mission: help keep the jobs we have, and create the new jobs we need, in our rural areas. We will provide tax credits for employers who go into our hard hit rural areas and create jobs for our citizens. We will work to provide aspiring entrepreneurs the educational and financial resources necessary to maintain and grow their businesses. We will expand the energy revolution in Southside and Southwest and make these areas the nation's hub for traditional and alternative energy research and development. We are also fully committed to the creation and sustainability of good jobs in rural Virginia to provide the next generation with the opportunity to live and work in their hometowns and communities. Our focus is simple: bring good paying jobs and great opportunities to the hard working people of rural Virginia."

"Economic Vision for Rural Virginia: Good Jobs Everywhere"

Bob McDonnell will be a jobs Governor. He understands that most Virginians have been impacted by this economic downturn, and people are anxious about what the future holds. That's why he will make his top priority bringing new jobs and greater opportunity to every corner of the Commonwealth - from Lee to Accomack to Loudoun County. Bob McDonnell has bold ideas and specific proposals to help overcome the challenges Virginians are facing and get our economy moving again.

Many of our rural cities and counties in Virginia have been hardest hit by the economic downturn. Henry County's unemployment increased by 7.8% in just the past year; Wythe County's unemployment rate rose to 11.3% from 5.6%; King William saw a 4.1% increase in their unemployment rate; Smyth County had an increase of 6.8%; and the city of Martinsville has the highest unemployment rate in the state at 21.6%.

From manufacturing facilities to dairy farms, rural Virginia must be a critical part of the economic engine to turn Virginia around.

Bob McDonnell has outlined specific policies geared toward an economic resurgence in Virginia's rural towns and counties and when he implements them as Governor, they will bring new opportunities to these areas. Bob McDonnell's plan for rural Virginia will not only create and sustain jobs today, but will ensure more opportunities for the next generation, so the regions' best resource will have every reason to stay and work in their hometowns and communities.

Encouraging Entrepreneurship throughout the Commonwealth
For most Virginians, jobs and opportunity means starting or expanding their own small business. Small businesses are 97.5% of all existing businesses in Virginia at 225,000 strong. They account for approximately 75% of new job growth in the Commonwealth. Total employment by small businesses is roughly 55% of the job force in Virginia.

In order to spur expansion of existing businesses and the establishment of new businesses that will pump revenue into our economy and employ thousands of Virginians, Bob McDonnell will significantly improve the resources available to those starting up or expanding a small business.

· Commit Virginia government to approve most routine business applications within 48 hours.
· Significantly enhancethe "The Virginia Business One Stop" website into a "First and Only Stop" by increasing the information,resources, and assistance available to ensure that only one stop is necessary to get a new business up and running with minimal delay.

· Update and combine Virginia's four different small business guides into one user-friendly document: "How to Start or Expand a Business."

· Work with Virginia localities to get all necessary paperwork and forms for small business start ups online.

· Make it easier for businesses in good standingthat are expanding within Virginia, or moving into the state, to operate under temporary licenseswhile awaiting official approval

· Promote Virginia as the "Best State in America in Which to Open a Small Business"

Historically Underutilized Business Zones
The federal HUBZone Empowerment Contracting program was established under the Small Business Reauthorization Act of 1997. Falling under the auspices of the US Small Business Administration, the program encourages economic development in historically underutilized business zones ("HUBZones") through the establishment of federal procurement preferences for businesses meeting program requirements. The program is designed to grow businesses and create jobs in distressed areas by providing access to more Federal contracting opportunities to qualifying business located in HUBZones. They are designated by federal government agencies and include both rural/nonmetropolitan areas and urban sectors, which exhibit low median household income and higher unemployment rates.

· As Governor, McDonnell will introduce legislation establishing a HUBZone Empowerment Contracting program, based upon the federal HUBZone program, to spur economic development and job growth in urban and rural areas.
· A Virginia HUBZone program would mandate at least 15% of state procurement contracts are awarded to qualifying certified small businesses located within HUBZones and meeting the programs requirements. This program will ensure state procurement opportunities are based on criteria such as business size, geographic location and competitive pricing on products and services; thus, expanding state procurement opportunities beyond large venders in metro areas.
· The Virginia HUBZone program would act as a catalyst for job growth and economic development in rural areas and urban areas alike. By focusing on the geographic location of targeted businesses, as well as other important factors, the program will reinvigorate areas hardest hit by challenging economic times.

Coordinated Statewide Effort to Further Growth in Rural Virginia
Effective economic development practices vary greatly by region throughout the Commonwealth. What works in Richmond, Norfolk or Northern Virginia may not necessarily work for rural Virginia. There is also significant diversity within rural Virginia that must be taken into account.

· The McDonnell administration will designate one deputy secretary of Commerce and Trade to focus solely on rural economic development. This position will make recommendations directly to the Secretary of Commerce and Trade, the chief job creation officer (the Lt. Governor), and the Governor on how to spur economic opportunities in rural cities and counties in the short and long term. Along with the deputy secretary, the Governor and Lt. Governor will visit regions of the state with the highest unemployment regularly to meet with regional leaders to develop job creation actions.
· This deputy will spend extensive time in rural communities helping develop innovative and meaningful ways to retain and increase jobs in these areas.
· An individual, who has never lived or worked in a rural area in Virginia, cannot fully understand the challenges and opportunities of economic growth in that area. This position will be filled by an individual from rural Virginia and have experience with job creation in those areas.

One of the existing resources Bob McDonnell will fully utilize as Governor is the Center for Rural Virginia ("Center"). The Center was created in 2004 and is an independent nonprofit local entity created for the purpose of sustaining economic growth in the rural areas of the Commonwealth and lessening the burdens of government through the activities prescribed by the General Assembly. The Center focuses on six key areas or core competencies: Agriculture and Natural Resources; Infrastructure; Healthcare; Education/Workforce; Community Capacity (leadership training); and Capital Access.

· As Governor, Bob McDonnell will add the Lieutenant Governor as the chief job creation officer, and the newly dedicated deputy secretary of Commerce and Trade for Rural Economic Growth to the Board of Trustees.
· Bob McDonnell will turn to the Center for guidance and advice on issues critical to the success of rural Virginia and to assist him with prioritizing objectives, including using the Center as a resource for recommendations on how to best utilize economic development incentives such as the Governor's Opportunity Fund.
· As Governor, Bob McDonnell will also partner with the Center to create a comprehensive and meaningful "Economic Policy for Rural Virginia." This four-year plan is currently developed by VEDP in Richmond, but would be better served if developed in coordination with those in rural Virginia who have the experience and expertise to identify and develop the policy plan.

The agencies and institutions that can assist rural Virginia must be highly visible in rural areas and cooperation among the agencies and institutions is key.

· To ensure that rural Virginia's needs are fully indentified and addressed, Bob McDonnell will also require each executive branch agency and state entity that has a significant impact on rural Virginia to designate one person to participate in the Governor's Rural Virginia Jobs Taskforce. Secretariats involved will include Commerce and Trade, Agriculture, Technology, Natural Resources, Education, Transportation and Health and Human Resources. The deputy secretary for Commerce for Rural Economic Development will also be a member of the Taskforce.
· The Taskforce will meet on a regular basis to coordinate their respective agencies' activities as it relates to rural Virginia and will report to the Governor's Chief of Staff. The Taskforce designees will also serve as their agencies' point of contact for rural community leaders and organizations. The Taskforce will be responsible for identifying and prioritizing issues affecting rural Virginia, developing a comprehensive statewide strategy to address these issues, developing partnerships with rural community leaders and working closely with and seeking advice from the Center for Rural Virginia.
Virginia has a network of Small Business Development Centers (SBDC) that have locations throughout rural Virginia. The SBDC, the Community Colleges, the other higher education centers in rural regions should provide space and opportunity to have representatives from VEDP and other relevant state entities on site on a regular basis. Seminars and courses should be made available to those who wish to start a business or expand a business - whether it is a farm, a bed and breakfast or a small manufacturing company.

The Major Business Facility Job Tax Credit was created by Governor George Allen and has been successful in helping businesses expand and relocate to Virginia. The program is easily administered and was reauthorized by the 2009 General Assembly through 2020. The tax credit can be claimed by companies engaged in any business in the Commonwealth, except for retail trade business, that create at least 100 new full time jobs in connection with the establishment or expansion of a major business facility. In the event that a major business facility is located in an economically distressed area or in an enterprise zone, the threshold is lowered to 50 jobs.

· Bob McDonnell recognizes that not all businesses can expand by 100 employees during these tough economic times. To expand the use of this successful program and incentivize job creation, Bob McDonnell will remove the 100 job threshold and give any company that creates at least 50 jobs the $1,000 tax credit.
· For facilities that locate in an enterprise zone or economically distressed area, we will lower the threshold from 50 to 25 jobs.
· Also, so that more job creating facilities will be eligible for this tax credit, we will consider economically distressed area as those having unemployment rates 150% greater than the state average, to put it on par with the GOF. Currently, an area shall qualify as severely economically distressed if it is a city or county with an unemployment rate for the preceding year of at least twice the average statewide unemployment rate for such year.
· We will propose this expansion of the tax credit for two years or until the economy recovers.

The Governor's Opportunity Fund (GOF) is designed as a "deal closing" fund to be employed at the Governor's discretion when necessary to secure a company location or expansion in Virginia. The GOF serves as a final resource for Virginia in the face of serious competition from other states or countries. A GOF grant is awarded to the Virginia locality, with the expectation that the grant will assist in attracting new industry, resulting in the creation of new jobs and capital investment.

· As Governor, Bob McDonnell will double the amount of the fund to about $40 million every two years. He will also expand the use of the GOF so that more businesses and the employees they hire will benefit. We will change the GOF rules to include not just job creation and capital investment as the criteria to qualify, but we will also allow companies that generate significant additional state and local tax revenue to qualify. We will also propose lower local matches for large projects and raising the governor's authority to $2 million per deal.

In conclusion, Richmond must come to rural Virginia. Working with the Lieutenant Governor, who will serve as the chief jobs creation officer, the deputy secretary of Commerce and Trade, the Center for Rural Virginia and the Taskforce will ensure that all applicable agencies and institutions responsible for economic development and workforce training for everything from small businesses-to major industries will have the resources needed to meet the challenges facing rural Virginia. These experts will have an increased presence in rural Virginia to help maximize existing resources.

Education in Rural Virginia
Most research into economic development has found that among the most important, if not the most important, factors is a ready and able workforce. Incentives and programs to develop economic activity have become a primary function of government because successful economic development provides citizens with the opportunity to increase their knowledge, earn better incomes, and provide for their own healthcare, retirement, and education for their children. However, it takes more than economic development incentives and programs to grow jobs and create wealth over the long term. Nowhere is this more true than in the rural areas of Virginia.

In order to establish long term growth and revitalization in rural Virginia, there must be a plan that allows rural communities to capitalize on their strengths and not necessarily model them after urban Virginia. Rural Virginia needs a transformation that creates a modern workforce while continuing to embrace its heritage of a rigorous work ethic that helped to build this great Commonwealth.

To achieve this goal, we must establish academic opportunities in K-12 and higher education that train a workforce in transferable skills in areas such as math, science, technology, computers, healthcare, and business. After two or four years of higher education, a young person should have the basic skills necessary to begin a trade or profession, run a bed and breakfast, or carry on the family farm in the area in which they grew up. The existence of these trained young people in rural Virginia provides the economic base necessary to further create the jobs needed to make the area prosper and grow. In order to accomplish this, we need to promote the programs that already exist while expanding into new areas.

Virginia already has a fast track program to an advanced agricultural career-The Agricultural Technology Program at Virginia Tech. Certain community colleges-Central Virginia Community College, Patrick Henry Community College and Southwest Virginia Community College are embarking on a Sustainable Agribusiness Management Program for Fall 2009. These are great starts but we need these and similar programs in other regions of the Commonwealth and to coordinate long distance learning programs for more remote areas. For example, partnerships with Longwood College and UVA-Wise can help to promote four year programs in Southside and far Southwestern Virginia.

Most critically, people need to be aware of the availability of these and other programs that enable the full economic potential of these regions of the Commonwealth. For example, Community Colleges currently offer associate degrees in Travel and Tourism. A degree in such a program could offer great potential to someone wishing to establish a bed and breakfast, promote a winery or open a bike shop. From beautiful working farms to the new nature trails on the bed of former railroad lines, enormous potential for creating business exists.

Bob McDonnell's plan is to expand the availability of existing programs to reach every rural area in the Commonwealth and to expand the scope of the programs available so that as a student learns about the basics of agriculture, they also learn the skills necessary to run an agribusiness (including agritourism) like technology, finance and how to write and implement a business plan.

We must integrate the services of these higher education facilities and pool resources, we must reach out to students and provide grants and loans to facilitate their education and create a vibrant workforce, and we must connect these young entrepreneurs to the full array of resources that will help them to reach their full potential.

Infrastructure Improvements
During his first year as Governor, Bob McDonnell will develop a comprehensive infrastructure plan for rural Virginia. Expanding broadband access is vitally important to these communities, but it is only one piece of the infrastructure puzzle to increase economic development in rural Virginia. Bob McDonnell will utilize the resources available to him as Governor to form partnerships with rural community leaders so they can develop their own part of the comprehensive plan regarding what they need most to attract and retain business in their communities. This could mean expanding traditional utilities like water and power or ensuring that their community has broadband internet access or wireless service. Either way, under Bob McDonnell's administration the localities will direct prioritizing their infrastructure needs not Richmond.

Transform Southside and Southwest Virginia into America's Energy Corridor
In cooperation with the Virginia Tobacco Commission, private sector energy leaders, our community colleges and our major research universities, Bob McDonnell will make Southwest and Southside Virginia the nation's hub for traditional and alternative energy research and development. When the technology transformation of the economy took place in the 1990's, Virginia was at the vanguard - Virginia needs to lead again when it comes to energy. Just as Northern Virginia is recognized as the leading technology corridor in the nation, the new energy corridor on the east coast will be Southside and Southwest Virginia. The Tobacco Commission has established 5 key research and economic development centers in the tobacco footprint of Virginia.

· Bob McDonnell will leverage the $100 million in funding made available through the tobacco commission by attracting private sector investment and coordinating grant opportunities with our universities and community colleges.
· A new Virginia Energy Institute will bring together the academic research capabilities of our major research universities under one canopy to help focus efforts on developing energy technologies for the 21st century.
· To assist with the attraction, building and operation of major energy facilities in Southside and Southwest Virginia, we will also support the establishment of the Center for Energy. The Center for Energy would be part of the Virginia Economic Development Partnership, and its purpose would be to work with local economic development organizations and Industrial Development Authorities to make certain that we maximize the potential for energy related investment in Southside and Southwest Virginia.

Not only will this mean more jobs and investment for Southside and Southwest Virginia, it will make Virginia the leader when it comes to policy guidance, research, and development on the harnessing and use of renewable energy, smart grid technology, carbon capture and sequestration, clean coal, oil, refining capacity, electricity, natural gas, energy infrastructure, and alternatives.

Fight for the Permanent Elimination of the Death Tax at the Federal Level
As a Virginia Delegate, Bob McDonnell was chief sponsor of legislation to kill the death tax on family businesses and farms. We were successful in eliminating this burdensome tax in Virginia. The federal death tax was phased out over a period of years in 2001, but the tax cut expires at the end of next year.

· As Governor, Bob McDonnell will stand up for Virginians by fighting for the permanent elimination of the death tax at the federal level.

Agriculture Policies that Stimulate Economic Opportunity
A new study commissioned by the Secretary of Agriculture and Forestry and created by the Weldon Cooper Center for Public Service at the University of Virginia found that the total economic impact of agriculture and forestry-related industries in Virginia was almost $79 billion in total industry output in 2006. The total employment impact is approximately 501,500 jobs, which makes up 10.3 percent of state employment. Every job created in agriculture and forestry related industries results in another 1.5 jobs in the Virginia economy. Every dollar generated in value-added results in another $1.75 value added in the Virginia economy.

It is clear that an economic revival cannot occur in our Commonwealth without a specific focus on promoting our agriculture and forestry industries.

Bob McDonnell will be a champion for Virginia's largest industry, include representatives from the community in policy decisions affecting their industry and will not overburden this industry with regulations that do not take into account proven results from existing voluntary and required approaches.

· Ensure that the Secretary of Agriculture's top priority is finding new markets in the US and abroad for Virginia's farm products.
· We will work with collaborative groups to identify adequate and stable sources of funding for the Agricultural Best Management Practices Program - both for cost-share and Soil and Water Conservation District operations.
· We support a comprehensive energy plan that includes offshore drilling for oil and natural gas to help lower long term fuel costs for farmers. McDonnell also supports further research and development of renewable energy sources, but will be sure not to put the burden on farmer's backs.
· Many farmers already have nutrient reduction programs in place on their farms. The McDonnell administration will work with the farming community to determine what plans are already in place, and evaluate their success or failures so that we can best determine how to move forward. We will not just put more regulations and mandates on the farming community without accurately knowing what they are doing already.
· We will continue to promote more farm preservation and keeping farms as working farms. In April, Bob McDonnell announced his goal of preserving another 400,000 acres of open space.
· Provide incentives for the development and use of the latest seed trait technology to improve yield and resistance to disease and insects while reducing chemicals which are a contributor to non-point source pollution.
· Before they are implemented, we will review all the regulations and executive orders issued by the current administration to ensure that they do not place undue costly burdens on agriculture.