Here's a plan that will really stimulate Virginia's economy

Here's a plan that will really stimulate Virginia's economy
February 22, 2009

Without a doubt, the economy and the subsequent decrease in available revenues are the most pressing problems facing all levels of government. The recent report from Virginia's Department of Planning and Budget indicates that the already reduced state revenues of $3.2 billion over the past three years will be reduced again by as much as another 15 percent or approximately another $400 million to $500 million.

The federal government's "stimulus" plan will more than likely provide Virginia with the revenue to restore the hundreds of millions of dollars in Medicaid, public education and higher education reductions already proposed by Gov. Tim Kaine.

It is also very possible that the federal stimulus funding for Virginia will offset the additional decrease in revenues which will be announced by Kaine.

Unfortunately, this federal stimulus funding is short-term at best, because the federal plan does little to stimulate the economy or create new private-sector jobs for American workers.

Because this economic downturn was predictable for the past several years, the Virginia General Assembly has passed several comprehensive economic stimulus initiatives that focus on improving the public infrastructure and creating incentives for job creation within the private sector.

In 2007, the General Assembly passed legislation that provided for $3 billion in bonds over 10 years for transportation construction. The General Assembly also increased the vehicle registration fee and the diesel fuel per-gallon tax and dedicated one-third of the insurance premiums tax to the Transportation Trust Fund.

This additional revenue provides more funding to address improvements to the transportation infrastructure. More specifically, this legislation also provided significant funding to improve rail transportation from the ports in Hampton Roads to connections with the Heartland Corridor, which is a major transportation artery for the transport of goods across America.

In 2008, the higher education bond package provided $2.6 billion for capital projects at Virginia's colleges and universities and other state facilities. Legislation also passed that authorized up to $350.5 million in revenue-producing projects at certain institutions of higher education.

So far during the 2009 session, the House and Senate have passed the Advanced Shipbuilding Performance Grants program. The House has passed legislation to extend the major business facilities job tax credit until 2020 and approved legislation that authorizes the Virginia Public Building Authority and the Virginia Resources Authority to finance economic development initiatives for major employment and investment projects performed by state and local government entities.

In each instance, these initiatives provide a real incentive to private business and industry for high-impact regional economic development projects in which the private entity makes a significant capital investment, creates hundreds of new, full-time jobs, and is expected to have a substantial direct economic impact on surrounding communities.

In addition, the House budget included $3 million more to promote tourism, $12.5 million for detailed planning to accelerate five major capital projects on various public college campuses, and $1.5 million for work-force development. The House has also taken the lead in funding the Virginia Coastal Research Energy Consortium that is working on alternative energy sources from wind, waves and biomass.

Rather than just talk about the need for an economic stimulus, the General Assembly has been proactive in creating an environment that clearly says, "Virginia is Open for Business."

Ranked as the "Best Managed" state in the nation and the best place to raise and educate a child, the commonwealth has a solid record for working to actually stimulate the Virginia economy without increasing government spending that does little more than create more public-sector jobs.

As a right-to-work state with responsible tax and regulatory policies, Virginia is poised to weather this economic downturn for both the short- and long-term benefit of the commonwealth.

Hamilton, who represents the 93rd District in the House of Delegates, is vice chairman of the House Appropriations Committee and a member of the conference committee that will resolve differences between the House and Senate budgets.