The House and Senate approved their respective versions of Virginia's biennial budget this week. That's what generated most of the news coverage from Richmond. It wasn't the only thing that took place on Capitol Square though, as lawmakers continued to work on approving legislation on a wide variety of issues.
BUDGET
The budget remains - by far - the most significant issue of this year's session. By week's end, the House and the Senate had approved their respective spending plans for Virginia.
The House plan would give the state a balanced budget without raising taxes. Having already been rejected by a vote of 97 to 0, the House plan eliminated former Governor Kaine's proposal to increase the increase the income tax by 17%. Further protecting Virginians from higher taxes, the House plan preserves car tax relief and eliminates the $145 million in new and higher fees proposed by the former Governor.
To ensure a balanced budget, there are reductions spending. Direct state aid to public education will be reduced by $310 million annually. To help reduce the effects of lower spending, local school divisions are being given greater flexibility in how they use the funds provided to them by the state. Because of a change to the Virginia Retirement System that will allow localities to save $270 million, the net impact of the additional spending reductions to K-12 education is $40 million annually.
Creating jobs has been high on the agenda throughout this year's session, and the House budget plan reflects that. Some $54 million in investments over the biennium is dedicated to job creation measures, including tax credits.
The House budget plan also reduces the spending cuts to public safety proposed by former Governor Kaine. Under the House plan, cuts to Commonwealth's Attorneys and Sheriffs were limited to 5%, restoring much needed funding to maintain public safety.
Now that the House and the Senate have passed their respective plans, the two must reach agreement on just one plan to send to Governor McDonnell for his consideration. That process has already begun, as negotiators on behalf of the House and Senate have already been designated and are expected to begin talks almost immediately.
LEGISLATION
The House of Delegates partnered with Governor Bob McDonnell to place a priority on creating a positive climate for job creation in Virginia by investing $46 million in the state budget over the course of 2011 and 2012. The House passed an Economic Development Package to only reinvigorate programs proven to be effective in returning on investments made.
"Yes, we face a difficult budget cycle, but especially in these tough times we must have the foresight to invest in our future prosperity," said House Appropriations Chairman, Del. Lacey E. Putney, I-Bedford. "Growing the tax base through job-creating business development is the key to Virginia's long-term economic recovery."
I appreciate, especially in these tight economic times, that all of my colleagues worked hard to be fiscally prudent and make targeted investments for long-term dividends and renewed prosperity in Virginia. Of course, we had to balance a $4 billion shortfall in order to right-size and make government more efficient. But we also focused on bringing new jobs to our state which will be the ultimate way to sustained recovery.
Included in this House Economic Development Package are targeted investments to the Governor's Opportunity Fund (GOF) and the Virginia Economic Development Partnership (VEDP). The GOF are discretionary funds available to the Governor to secure a business location or expansion project for Virginia. Grants are awarded to localities on a local matching basis with the expectation that the grant will result in a favorable location decision for the Commonwealth. VEDP's mission is "To enhance the quality of life and raise the standard of living for all Virginians, in collaboration with Virginia communities, through aggressive business recruitment, expansion assistance, and trade development, thereby expanding the tax base and creating higher-income employment opportunities." These targeted measures will attract jobs and businesses to Virginia by offering economic incentives and promoting Virginia in the business world.
Also of great importance to the package of legislation is House Bill 1381, the MEI (MEGA) Site Planning Fund patroned by Del. Ward L. Armstrong (D-Martinsville) which helps Virginia develop the "site ready" big tract sites needed to bring larger businesses to Virginia.
House Bill 803, sponsored by Del. Charles Poindexter (R-Glade Hill) and co-patroned by Del. Chris Peace allows a $500 income tax credit for the creation of "green" jobs. Each taxpayer is allowed a credit for up to 350 new green jobs and may qualify for the Enterprise Zone Grant program if the job is located in an enterprise zone.
Also co-patroned by Peace, and included in the package, is House Bill 624 introduced by Del. Terry Kilgore (R-Gate City) which amends the Major Business Facility Job Tax Credit to reduce the number of qualified full-time jobs required to be created to 50. In enterprise zones or economically distressed areas, the base or threshold is lowered from 50 newly created jobs to 25.
Del. Ben Cline (R-Amherst) introduced House Bill 861 to attract more of the Motion Picture Industry to the Commonwealth. It provides refundable income tax credits to any motion picture production company with qualifying expenses of at least $250,000 with respect to film production in the Commonwealth. Total credits allowed for any biennium cannot exceed $10 million. Delegate Peace joined Cline and Governor McDonnell in support of this measure.
Finally, Del. Sam Nixon (R-Chesterfield) and Del. Chris Peace patroned House Bill 523 that grants an income tax exemption for any gain taxed as a capital gain for federal income tax purposes that is related to a qualified investment of a new technology and science start-up business.
Investment in tourism, small business, biotechnology, and Virginia's wine industry are at the forefront in the Economic Development Package passed on Sunday. Tourism, which returns five dollars to the Commonwealth for every one invested, will receive an increase in funding of $3.6 million in each of the next two years by allocating funds to the Virginia Tourism Corporation.
Increased incentives for small businesses, which are responsible for 70% of the new jobs created in Virginia, were also part of the package.
Amendments include proving $1.0 million to recapitalize the Virginia Small Business Authority's capital access fund, $1.0 million over the biennium to improve the business one-stop program making it easier to navigate the red-tape of licensing and permitting, and $6.5 million over the biennium to expand Virginia's oldest business incentive, the Virginia Jobs Investment Program, which provides company-specific training in grants to new and existing businesses of all sizes.
The biotechnology and sciences industry will receive an increase in funding to encourage home-grown bioscience companies to stay in Virginia and create more jobs, moving Virginia forward with investments in green, clean, and alternative technologies. Included in the amendments is $3.0 million for the Center for Innovative Technology's (CIT) Gap Funds, which will underwrite critical first financing for new early-stage companies.
Virginia's wine industry has made Virginia the sixth largest wine-exporting state, increasing jobs and tourism throughout the Commonwealth. Included in the Economic Development Package was House Bill 588, sponsored by Landes and co-sponsored by Del. Chris Peace, which appropriates funds from the current Wine Liter Tax to the Virginia Wine Promotion Fund, helping create jobs and attract tourists to Virginia.
One of the consumer protection bills I introduced this session has passed both the House and Senate. The measure will now be sent to the Governor for his consideration. House Bill 713, aka the BPOL bill, requires any contractor applying for or renewing a business license in any locality to furnish prior to the issuance or renewal of the business license either (i) satisfactory proof that he is duly licensed or certified as a contractor or (ii) a written statement, supported by an affidavit, that he is not subject to licensure or certification as a contractor or subcontractor. The bill also prohibits any locality from issuing or renewing a business license unless the contractor has furnished his contractor license or certificate number or evidence of being exempt licensure as a contractor.
The Business, Professional and Occupational License (BPOL) tax is a tax on businesses for the privilege of engaging in business at a definite place of business within a Virginia locality. The measure or basis of the BPOL tax generally is the gross receipts of the business. The BPOL tax is a tax on gross receipts, not net income. Under current BPOL law, any locality may charge a license fee in an amount not to exceed:
· $50 for any locality with a population of 25,000 and greater
· $30 for any locality with a population smaller than 25,000
The locality may not assess a license tax on gross receipts upon which it charges a license fee. Additionally, the locality may not impose a license tax on a business with gross receipts:
· less than $100,000 in any locality with a population greater than 50,000
· less than $50,000 in any locality with a population of 25,000 but no more than 50,000
This bill is a consumer protection bill which was brought to me by a resident of the 97th District. Homeowners who hire unlicensed contractors to perform work may expose themselves to unnecessary liability. Work performed by an unlicensed contractor is not secured by a warranty. Homeowners and businessmen lose hundreds of thousands of dollars, not to mention the mental stress, to uncertified/unlicensed contractors and craftsmen posing as contractors.
BASKETBALL
During every General Assembly session, the House and Senate square off - for a basketball game. That's right, legislators in gym shorts. Needless to say, those who attend the game do not do so in the interest of seeing amazing athletic feats.
And, legislators aren't the only ones who participate in the evening's activities. There are actually two games, one where Delegates face Senators, and another featuring the Governor's Office taking on lobbyists.
As is usually the case, the House of Delegates team defeated their Senate counterparts with the talented and skilled Delegate Manoli Loupassi the clear Most Valuable Player. But despite having Governor Bob McDonnell on their team, the Governor's Office fell to the Lobbyists.
The game is all for a good cause, raising money for Virginia Commonwealth University's Massey Cancer Center. And this year, no legislators were harmed during the event.
VISITORS
Friendly faces from home continued to visit us here in Richmond this week. We were honored to be visited by Christine Mason, a new resident from New Kent County, Richard Grossmans, from the Good for America Foundation, Rodney Butler from Virginia State University, students from J. Sargeant Reynolds Community College, Clay Roberts of Colonial Farm Credit in Mechanicsville, Hal Dalton of Hanover, and New Kent County Administrator Cabell Lawton. The House of Delegates floor session is opened daily in prayer, offering the opening prayer today was Reverend William "Bill" Burk, Rector at Church of the Creator in Mechanicsville.
CONTACT ME
With just two weeks remaining before the scheduled end of Session on March 13, we're really in the home stretch of the 2010 General Assembly session. Still, there's time to hear your concerns on the issues of the day. To ensure we hear from you while we're still in Richmond, you can contact our office at 1.804.698.1097 or send us an email at Delcpeace@house.virginia.gov.
Look for more details next week, as we wind down the 2010 General Assembly session in Richmond.
