Gov. Bob McDonnell will cement the state’s investment in an ambitious Northern Virginia biotech startup, part of an expensive package of incentives, tax breaks and deregulation hoped to spur economic recovery.
The governor plans to sign five measures into law at the Center for Innovative Technology in Herndon, the temporary home of the Ignite Institute — a $200 million nonprofit genetics research venture. One of the bills will offer as much as $22 million in grants for the facility.
The bundle of legislation represents a portion of the jobs platform widely credited with putting McDonnell in the governor’s mansion. With the bills easily clearing the legislature, the new Republican governor now faces the tougher question of how to measure their effectiveness.
The initiatives to be signed Tuesday also offer capital gains tax breaks for tech entrepreneurs and make it easier for out-of-state businesses to be temporarily licensed in Virginia.
Legislators recently agreed to a budget that bolsters the governor’s opportunity fund by $12.1 million, helping localities accommodate employer relocation and expansions. Until now, the fund has been “comparatively weak,” said Fairfax County Economic Development Authority President and Chief Executive Officer Gerald Gordon.
“Our resources have been meager in Virginia compared to our neighbors,” he said. “By increasing that, it gives [McDonnell] a lot more power” to attract businesses.
Skeptics charge the governor — who is forecasting his plan will net nearly 30,000 new jobs and $311 million in revenue — with overstating his ability to move the commonwealth’s economy.
“They may be nice things to do, but their ability to actually grow jobs and bring jobs — especially at the levels we are needing in this state — are pretty suspect,” said Michael Cassidy, executive director of the Richmond-based Commonwealth Institute for Fiscal Analysis.
Virginia runs the risk of providing companies tax credits for jobs they would have created regardless, Cassidy said. And the incentives and regulatory changes are tough to publicize widely enough to alter employer behavior.
“Some employers, especially smaller ones, may learn about the various credits only when they meet with their tax preparer at the end of the year and are told they can get an unexpected tax credit,” he said.
