Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, May 10, 1995 TAG: 9505100085
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: JEFF STURGEON STAFF WRITER
DATELINE: RICHMOND LENGTH: Medium
The rolls of new employers and details about a record $1.9 billion worth of capital investment pledged in 1994 by new and expanding companies filled a 37-page report released Tuesday by Gov. George Allen.
"Our economic development efforts have paid off for Virginians in 1994," Allen told reporters invited to his first "round table" for business editors and writers.
Employment grew by 87,200 positions to surpass 3 million for the first time. Officials said 231 companies announced future plants or expansions, the largest being Ford's planned $326 million pickup truck factory in Norfolk, which will employ 400.
The report did not give the wages or salaries the new jobs paid, or detail what state and local taxpayers paid in incentives for future jobs in the form of tax breaks, waivers for utility connection fees, free employment training and other benefits. Incentives are used to cement deals when companies have other offers, and have grown in importance to companies as they look to build new plants or expand existing ones.
Secretary of Trade and Commerce Robert T. Skunda said, however, that incentives played a minor role in last year's job growth or the growth expected when new plants and expansions that were announced materialize over the next few years.
Most of the companies investing in Virginia want to do so because of the strong business climate that the Allen administration has been striving to cultivate, Skunda said.
"We acknowledge the economy is stronger now than it was in the early '90s," Skunda said. "However, had the governor not instituted the kinds of tax and regulatory policies that sent the signals to business in Virginia coming in, we would not have seen the confidence in Virginia both for the expansion of existing business as well as those that we have attracted."
By all accounts, 1994 was a good year. The state's job supply grew 3 percent last year, up from 2.5 percent in 1993 and less than 1 percent in 1992. In 1991, the state lost jobs.
Recalling his campaign pledge to create 125,000 jobs during his four-year term, Allen said: "We're well on our way to meeting that goal. We have a ways to go. And let's assume we reach it. That doesn't mean we just sit back. I'll give you all another goal," he told top administration officials seated around him.
Allen predicted job growth would continue and 1995 will be as good as or better than last year.
The governor defended taking credit for last year's employment growth, telling reporters, "I guarantee if it were the reverse, you'd be saying, `Well, look, you lost ... jobs.'''
The 231 companies that last year said they'd expand in Virginia have committed to hire at least 17,087 employees, the most new jobs announced in any year since 1987, the governor's report said. The spinoff effects of that hiring will create another 17,000 jobs indirectly, the report said.
The $1.9 billion investment in new facilities and equipment pledged by the 231 firms is the largest total investment pledged in any year by industry since the state started keeping track in 1980, the report said.
Officials said about half of last year's new jobs were in service industries. The jobs include relatively high-paying fields such as business computers and management and health care. According to the Virginia Employment Commission, the average annual salary currently paid in the state is $20,000.
As for incentives given to new and expanding companies, state officials said they haven't added up what local governments paid to attract industry last year. Only broad figures were available for the state's two main incentive programs: the Governor's Opportunity Fund, which has paid out $16 million over the three years it has existed, and a service that provides free employment training to companies, which has a $7 million budget for the two-year period ending June 30.
The opportunity fund, Skunda said, has leveraged huge sums of money for the state. Companies and their employees that benefited from infrastructure improvements and other services it funds have returned $1 billion to the state through payment of various taxes.
by CNB