McAuliffe Sets Record For Business Incentive Deals
Virginia Democratic Gov. Terry McAuliffe is awarding business incentives at a record-setting pace, and appears determined to continue that pace throughout his term in office.
Watchdog reported on Wednesday that McAuliffe’s administration “has closed a record 228 economic-development deals since he took office last January,” and that the latest deal, announced last week, “will merely shift workers between two Virginia counties while pitting one state-subsidized company against another.”
Under the agreement McAuliffe made with Commercial Metals Co. (CMC) “the state will provide $450,000 in rail-access funds … [and] up to $26,000 in job retraining funds” to help the firm move to a new location in King George County.
According to a press release issued by McAuliffe’s office, the project involves a $12 million investment by CMC, and “will retain approximately 40 existing jobs and create another 20 new jobs.”
“My top priority as Governor is to create a new Virginia economy,” McAuliffe said, calling the deal “another step forward in this goal.” (RELATED: Why are Libertarians Helping Elect Crony Capitalist Terry McAuliffe in Virginia?)
However, Watchdog points out that former governor Mark Warner “made an almost identical deal to bring Gerdau Ameristeel [a competitor of CMC] to the same complex” nine years ago, meaning “any CMC expansion may come at the expense of Gerdau.”
As a result, King George County Supervisor Ruby Brabo thinks the deal is unlikely to create many new jobs, on net. “King George may see one new job created from this deal. If we are lucky we might get two or three new jobs,” Brabo told Watchdog.
Other officials, however, said there had been concerns that “CMC was preparing to move out of the state,” and praised the deal for keeping the jobs local. (RELATED: McAuliffe Immediately Faces Patronage Controversy After Assuming Office)
The eagerness with which McAuliffe has pursued economic development deals since taking office is partly explained in a report his office released last week outlining his economic vision for the state, in which he laments Virginia’s over-reliance on federal jobs.
The report claims that, “recent federal budget cuts, reductions in defense spending, and the impact of sequestration” have created challenging economic conditions, necessitating “decisive action … to enhance Virginia’s fiscal resilience and bolster economic growth.”
McAuliffe’s four-year plan to revive Virginia’s economy consists of five “priorities”, including infrastructure development, improving the state’s business climate, and equipping workers with in-demand skills. (RELATED: Virginia Legislators Resist Bailout of ‘Corporate Welfare Fund’)
In addition, the governor wants to “diversify and grow strategic industry sectors” by attracting established businesses to Virginia, as well as “nurture a sustainable entrepreneurial environment” through incentives for start-up companies.
Thus far, McAuliffe has used incentive packages mainly to lure established companies in targeted industries. However, his long-term economic plan envisions “a robust portfolio of incentives” for start-ups, and calls on the legislature “to expand the individual limits and/or total cap on the R&D and Angel Investor tax credits.”
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