News and Notes January 18, 2016

Tagged in: General Assembly
News and Notes January 18, 2016
The following is a summary of policy information concerning the top legislative initiatives of the Hampton Roads Chamber of Commerce.

2016 General Assembly Session
News and Notes
January 18, 2016

 

News and Notes – The following is a summary of policy information concerning the top legislative initiatives of the Hampton Roads Chamber of Commerce.

Go Virginia – The Virginia Initiative for Growth and Opportunity in each region is known as Go Virginia.  This is a business-led, bi-partisan initiative that will provide a new framework for strengthening the economy in each region through enhanced collaboration by business, education and local government with incentives from the Commonwealth.

To encourage this business-led collaboration in each region, Go Virginia seeks financial and technical support from the Commonwealth that will be matched by private, local and other resources.

Go Virginia has advanced five policy priorities:
Innovation – State grants that leverage private, local and other investments in key regional initiatives and industry sectors.
 $38.4 million (SB 449/HB 834)

Investment – Incentives for localities to cooperate rather than compete with each other on economic development.

Improvement – Cost-saving collaboration by localities, school divisions and colleges.

Invention – Investment in research leading to new business ventures - $140 million in combined general funds and bonds for capital investment.

Infrastructure – Capital projects with regional economic impact. – Governor’s introduced budget recommends $2.43 billion includes projects with regional economic impact.

Bills Introduced to Support Go Virginia:

SB 449 (Norment R 3rd and Howell D 32nd)
HB 834 (Cox R 66th and Torian D 52nd)
SB 459 (Ruff R 15th and Saslaw D 35th)
HB 846 (Hugo R 40th, James D 80th, Minchew R 10th)

More than 50 major business, professional, civic and economic development organizations including the Hampton Roads Chamber of Commerce have endorsed Go Virginia.

The Port of Virginia
A Catalyst for Commerce

The Issue – The Port of Virginia is handling record volumes on a daily basis and will experience significant congestion if the Commonwealth does not invest in infrastructure.  Vessel sizes are increasing and there is continued cargo diversion from the west coast.  This growth coupled with lack of investment means Virginia companies will experience delayed delivery of the goods needed to manufacture products or put merchandise on the shelves for consumers.

The Solution – The conversion and optimization of Norfolk International Terminal, a 567 acre facility in Norfolk, is the ports most immediate opportunity to expand capacity and mitigate congestion.

This project requires $350 million in capital improvements and creates 30 automated container stacks with the first completed by 2017 and all completed by 2019.

Benefits

  • Increases NIT capacity by 46.34%
  • Potential to generate additional $100 million in total revenue and $10 million in annual profits
  • $16 billion in Virginia spending and $462 million in state and local taxes
  • Potential to support an additional 120,000 jobs

Summary – The Port of Virginia is an economic engine for the Commonwealth providing 374,000 jobs, nearly 10% of Virginia’s workforce, and generating more than $30 billion for the gross state product, nearly 7% of the total.

The Hampton Roads Chamber of Commerce SUPPORTS the $350 million request from the Port of Virginia.

K-12 Funding a Priority

The Hampton Roads Chamber of Commerce has joined with member jurisdictions in Virginia’s Urban Crescent to urge Support for increased K-12 funding in this year’s state budget.

Since 2009 due to “Great Recession”, the Commonwealth has reduced its share of funding for public education by approximately $1 billion.

State funding on a per pupil inflation adjusted basis has decreased from $4,275 per pupil in 2009 to $3,655 per pupil in 2015.

Some highlights from a recent study presented to the Urban Crescent Education Coalition authored by James Regimbal, Jr. of Fiscal Analytics, Ltd:

  • Local revenues are only beginning to recover from the Real Estate Recession.
  • Since recession, local resources have not kept pace with inflation/population growth.
    (All revenue FY 2009 to FY 2014, 5.9% - Growth in population/inflation 14.2%)
  • State General Fund Revenue Growth has stalled limiting K-12 funding.
    (2009-2015, 1.9%)
  • Medicaid growth has outstripped General Fund Growth.
    (FY 2009-FY 2015, 6.1%)
  • Growing State Debt Service from General Fund.
    (2009 R425 million;  2016, $690 million)
  • Tax changes reducing State Biennial General Fund Tax Revenues by $3.1 billion since 1994.

Summary – All of the factors have lead to declining State aid to localities as a percentage of the General Fund budget.
 (FY 2009 52.0%, FY 2016 43.8%)

  • Real inflation adjusted State K-12 funding is below 2005 levels.
  • Recent JLARC report on K-12 education stated that Virginia provided 7% less per K-12 student adjusted for inflation from FY 2005 to FY 2014.
  • More than 80% of school divisions reported challenges in recruitment and retention.
  • Divisions spent 30% less to operate and maintain facilities since 2005.

Other K-12 Challenges

  • 163,000 Special Ed students (13% increase).
  • Rising number of English as a second language students (8% increase).
  • 32% of schools not fully accredited (2014-2015).
  • Localities on average spend about double, or $3.6 billion beyond state requirements to meet SOL and SOA requirements.
  • Virginia ranks 41st out of 50 states in state per pupil funding.
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