McDonnell lays out plan to pay for job creation

Gov. Bob McDonnell wants to tap into six funding sources to offset $50 million in new spending for his jobs and economic-development initiatives.

Half of the funding would come from stretching over two years an increase in the state’s contribution to workers’ retirement.

These offsets are separate from upcoming cuts to resolve the state’s massive, looming budget gap. McDonnell’s team could begin later this week to share with the Senate and House money committees his more comprehensive strategies for erasing the state’s $4.2 billion budget shortfall.

As for the cuts to fund his wish list, McDonnell also seeks $4 million by not filling vacant positions at the Department of Correctional Education and $1.2 million by deferring equipment purchases at the Department of Corrections.

An additional $21 million would come from increased revenue from the state’s tax amnesty program and $500,000 from the elimination of a contingency reserve for capital outlay.

Lastly, $5 million would come from state funding saved with additional federal grant funding for administration of the food stamp program.

McDonnell outlined his proposed new spending last week in a speech to a joint meeting of the General Assembly. He wants to increase the amount in the Governor’s Opportunity Fund, used to attract businesses to Virginia, in fiscal year 2011 by $12.1 million; and would like an additional $5 million for an “industrial mega-site fund.“

McDonnell also wants to spend $2 million over the two-year budget to establish economic development offices in China, India and the United Kingdom. He wants to increase the appropriation for the Virginia Jobs Investment Program by $6.5 million in fiscal year 2011 and increase funding for the Virginia Tourism Corporation by $3.6 million a year for the next two years.

The governor suggests increasing the current $200,000 per year in the Governor’s Motion Picture Opportunity Fund by $2 million and boosting funding for promotion of state wines, among other things.

In the Senate, Finance Committee member William Wampler, R-Bristol, and Finance Committee Chairman Charles Colgan, D- Prince William, will carry McDonnell’s amendments.

Del. Lacey E. Putney, I-Bedford, chairman of the Appropriations Committee, will bring them in the House of Delegates.

House Minority Leader Ward L. Armstong, D-Henry, said he’s fine with most of the adjustments.

“We’ve got to have the economic development help and the money’s got to come from somewhere,“ said Armstrong, who represents parts of economically battered Southside Virginia.

“There’s a whole region of Virginia that needs help and needs help now. We can’t wait.“

Meanwhile, McDonnell said his address to the nation Wednesday night, when he responds to President Barack Obama’s State of the Union address, will focus on jobs. McDonnell made job creation a central theme in his campaign for governor. He also said he would point out the philosophical differences between the political parties.

Earlier today, McDonnell told about 70 retired military officers that hard budget times will make it unlikely they will get much of what they want in the state budget.

“Be patient,“ he said about their budget requests.

The Military Officers Association of America, of which McDonnell is a member, is lobbying for more funding for the Virginia War Memorial, burial vaults to be offered at cost at Virginia veterans cemeteries and exempting military family relief funds from taxable income.

The organization has 40,000 Virginia members.