Virginia Economic Development
Policy Update – The 2017 Virginia
General Assembly
Chesapeake Economic Development CouncilMarch 10, 2017
Christopher D. LloydSenior Vice President, Infrastructure and Economic Development
Challenges Facing Virginia’s Economy
• Shift from high paying jobs to lower paying jobs
• Stagnant retail sales
• Declining federal and military spending
• Insufficient funds to meet infrastructure needs
• Underinvestment in universities, particularly research
Setting the Stage – 2017 Session
• Virginia facing $1.5 billion budget gap
• Uncertainty about federal spending and policy
• Less money than expected for transportation
• New lease deal on Virginia’s Ports
• JLARC study recommends significant changes at VEDP on operations, planning, incentives management
• Growing distrust between executive and legislative branches
• It’s an election year!
What Happened?• Commonwealth Opportunity Fund survives at
historically high levels (~$20 million/year)• 2016 VEDP funding increase maintained• Reorganization of VEDP, greater collaboration
with localities and GO Virginia required• Heightened scrutiny of state incentives• New site development funding erased• New incentive tools for localities created• No change in corporate income tax (but tax
reform could emerge as election issue)• GO Virginia funding
Issues to Watch for 2017/2018
• Reorganization of VEDP
• Contrasting visions for Virginia’s future likely to be top issue in gubernatorial race
• Redistricting uncertainty
• Military resurgence?
• Impact of Trump trade and regulatory policies
• GO Virginia implementation
A BUSINESS-LED STATEWIDE INITIATIVE
TO GROW AND DIVERSIFY THE PRIVATE SECTOR
IN EACH VIRGINIA REGION
“Create more higher paying jobs through incentivized collaboration, primarily through out-of-state revenue, which diversifies and strengthens the
economy in every region”
7
GO Virginia Purpose Statement
Virginia Payroll Job Change: Private SectorThe Great Recession and Recovery To Aug 2016
-2
-19
-12
-9
-75
-18
-6
-69
-19
-35
-4
-25
-100 -80 -60 -40 -20 0
Mining & Logging
Information Svcs
Wholesale Trade
Transp. & Utilities
Construction
Financial Svcs
Other Services
Manufacturing
Leisure & Hospitality
Retail Trade
Educ & Health Svcs
Prof. & Bus. Svcs
(000s)
Source: Bureau of Labor Statistics (Seasonally Adjusted), GMU Center for Regional Analysis
4
21
10
23
20
1
54
37
77
88
- 20 40 60 80 100
To Aug '15
Aug '15-Aug '16
(~2007 - ~2010)
Total -293(~2010 - Aug ’16)
Total 335Ranked by Size in 2015
Commonwealth of Virginia
Average Job Contribution to Gross State ProductBy Private Sector in 2015 $s
Sector Average Job Contribution to GSP
Leisure & Hospitality Services $38,000
Retail Trade $61,637
Education & Health Services $66,868
State and Local Government $69,804
Construction $83,100
Transport/Warehousing $109,136
Military $125,215
Professional & Business Service $145,211
Wholesale Trade $158,875
Federal Government $163,125
Manufacturing $186,311
Information Services $336,162
Financial Services $491,636
All Private Sectors Average $127,630
All Government Average $117,432
Source: IHS Economics, GMU Center for Regional Analysis
The GSP* Effects of Private Sector Job Change
in the Commonwealth of Virginia,
March 2008-August 2016 (in 2015$s) __________________________________
Job Average Total
Change GSP* Value GSP* Value
-293,300 $152,807 - $44,818,293,100
+335,400 $114,793 38,501,572,200
+ 42,100 - $6,316,720,900
Source: GMU Center for Regional Analysis *Gross State Product
• Governor reduced budget to $20,450,000
• General Assembly recommending restoration of $7.5 million
• Conference report provides up to $650,000 per region for growth and diversification plan, $20 million + for project grants
11
General Assembly Budget Action - 2017
• March 14, 2017 – Certify Regional Councils and Support Organization, adopt growth and diversification plan guidelines
• April and June 2017 Board Meetings – Review work plans and provide initial funding for growth and diversification plans
• April 2017 – Statewide orientation session
• April – September 2017 – complete guidelines process
• June and September 2017 Board Meetings – Accept regional plans, solicit project ideas 12
Next Steps
Questions or Comments?
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