THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, December 19, 1995 TAG: 9512190303
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: Medium: 80 lines
Gov. George F. Allen didn't give Virginia's economic development program top billing in his 1996 state budget, but it is certainly high among his priorities.
Trying to build upon the state's visible success in attracting companies and creating jobs, Allen requested about $57 million in additional funding Monday to increase economic development marketing efforts and incentives.
Virginia's economic development program garnered national attention this year with announcements that three major high-tech companies, Motorola, IBM and Toshiba, plan to open two semiconductor manufacturing plants in the state. IBM and Toshiba are working together on one plant.
Other companies like Gateway 2000, United Parcel Service, MCI Corp., the New York Times Co., Avis, TWA and Oceana Sensor Technologies provided a slew of announced relocations or new facilities in Hampton Roads - evidence that economic development has taken a lead stage this year.
In fact, Business Facilities magazine, a trade publication, recently awarded Virginia first-place honors among its 1995 Economic Development Achievement Awards for its industry grant program, specifically the performance-based grants the state hands out when new firms relocate to the Old Dominion.
The governor's proposed biennieum budget for fiscal years 1997 and 1998 includes:
Expansion of marketing programs in the Economic Development Partnership to the tune of $21 million.
A public-private partnership created in last year's General Assembly, the Economic Development Partnership will assume the marketing functions of the Virginia Department of Economic Development, said Robert J. Baratta, deputy director for policy at the state's department of planning and budget.
``Basically what it does is take two primary functions of the state, economic development and the marketing aspects and the strategic planning (Opportunity Virginia),'' he said. ``It would put Opportunity Virginia in that partnership, which would give it continuity from administration to administration. Economic development then would be nonpartisan, more of a professional staff that would do what was best for the commonwealth.''
The partnership will handle national and international marketing, business development advertising, cooperative tourism marketing and export promotion.
Increase of $8 million, over the originally appropriated $10 million, for the Opportunity Virginia Fund, the governor's matching funds program used as a ``deal closer'' to attract companies to the state. This program helps local communities make up the difference in infrastructure costs to support new buildings and roads needed when firms move to the state.
Increase solar voltaic incentive grant program by $6.5 million. This field has been identified as a ``hot'' area of growth by the state economic development department.
Increase of $3 million for the Center for Innovative Technology. This is to help restore the center's balances to its original levels because the General Assembly and the state administration dipped into its funds for their operating budget, Baratta said.
``We're trying to restore that and make it whole so they're on firm financial footing,'' he said.
Another proposal under the governor's budget involves consolidation of services for existing businesses. It would create a Department of Business Assistance to house services for existing businesses, including unemployment compensation and work-force training programs - all formerly divided among the state's economic development department, the Virginia Employment Commission and the Department of Labor and Industry.
``One of the biggest criticisms of the business community is that existing companies say `once we come here you forget about us.' This is a way to address the needs of existing businesses and keep them in Virginia,'' Baratta said.
Employees from this new agency would call on Virginia-based companies to find out what sort of training and other needs they have concerning their company's growth or decline. The agency would also help the companies maneuver around logistical difficulties such as obtaining permits or financing. ILLUSTRATION: Gov. Allen's 2-year state budget plan
by CNB