- The Washington Times - Tuesday, January 26, 2010

RICHMOND — Gov. Robert F. McDonnell has written some of the job-creation plans he unveiled in a speech a week ago into legislation that a Republican, a Democrat and an independent will sponsor.

Mr. McDonnell said in a press release late Monday afternoon that he will boost job-development program spending by about $50 million a year. He said he would offset the spending with cuts, a windfall from the state tax amnesty program, and savings from higher employee contributions to pension plans for new state workers.

Monday’s announcement mostly restated key points the newly inaugurated Republican governor made in his first State of the Commonwealth speech on Jan. 18 to a joint session of the General Assembly.

Among other things, the legislation would boost a governor’s office fund for luring companies to Virginia by $12 million next year over what Democratic former Gov. Tim Kaine proposed in the budget he submitted last month.

It appropriates $2 million to open Virginia trade offices in China, India and the United Kingdom; boosts Virginia Tourism Corp. funding by $3.6 million; and adds $2 million to a fund to entice Hollywood to shoot movies in the state.

To pay for it, Mr. McDonnell proposes using $21 million the state netted from its tax amnesty program, savings of about $25 million from a requirement that new state hires pay a share into their pensions, and spending cuts. Many of those measures were in Mr. Kaine’s proposed budget.

State Sens. Chuck Colgan, a Democrat, and William Wampler, a Republican, will be the bill’s Senate patrons, and conservative independent Lacey Putney of Bedford, chairman of the House Appropriations Committee, will introduce it in the House.

The changes are an effort by Mr. McDonnell to make good on the central pledge of his successful gubernatorial campaign: creating jobs at a time when Virginia’s unemployment rate has more than doubled to nearly 7 percent. And he has to make the changes as he and the General Assembly reconcile a $4 billion revenue shortfall over the next two years.

“The budget that I have inherited is dire, and it is unbalanced. We begin with nearly a billion dollar annual shortfall based on tax hike proposals that both parties have rejected. More spending cuts must be made,” Mr. McDonnell said in the release.

But it would be even more costly, he reasoned, not to invest now in creating new jobs.

Mr. Kaine’s budget may have been dire, and it was unpalatable to Republicans and many Democrats. But it was balanced, chiefly by cutting the $950 million annual cash payment the state made to cities and counties as reimbursement for revenue lost to the 12-year-old phaseout of the local tax on personal automobiles.

A separate $1 billion-a-year income-tax increase Mr. Kaine proposed would have gone to local governments in return for the discontinued annual reimbursements. That bill, however, died last week in the House, with Democrats and Republicans both voting unanimously to kill it.

Initial Democratic reaction to Monday’s late-day press release was guarded but favorable.

Delegate Ward L. Armstrong, Henry County Democrat, who is his party’s leader in the House of Delegates, said he wasn’t troubled that the Senate’s senior Democrat was a co-sponsor for the GOP governor’s first major budget legislation.

“It gives me some level of comfort,” Mr. Armstrong said.

He agreed with many of the ideas Mr. McDonnell offered, he said, including capturing savings and windfalls and targeted cuts. He was less charitable toward the proposal to boost employee contributions to the Virginia Retirement System.

“You’re looking at contributions from state employees, and they haven’t had a raise. Clearly it eats into their income if they have to contribute more,” Mr. Armstrong said.

Mr. Colgan, reached by telephone to discuss the legislation Monday night, said he could not speak and hung up.

Mr. McDonnell, Republican Lt. Gov. Bill Bolling and other senior administration officials plan to elaborate on the legislative package at a Tuesday news conference. Mr. McDonnell has given Mr. Bolling the duty of acting as the state’s “chief jobs-creation officer” during his four-year term.

Associated Press writer Larry O’Dell contributed to this report.

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