A real jobs plan, not a centrally-controlled one
By JR Hoeft | Friday, July 10th, 2009 | Politics
From what I can tell of the jobs plan released by Bob McDonnell yesterday, it seems to be one which uses government to invite private enterprise and increased investment into Virginia, including incentives to create jobs in rural and distressed areas of the state. Creigh Deeds jobs plan: build roads and schools. Key difference – McDonnell’s is wide-ranging and uses government to encourage competition and the free market; Deeds’ puts government in charge of the spending, hiring, and other business decisions – in other words, advocates a centrally-planned economy – and is narrowly focused.
The key components of McDonnell’s plan are:
- Expanding use of the Governor’s Opportunity Fund by roughly doubling the funding available and broadening Fund rules to allow companies that generate additional state and local tax revenue to qualify
- Appointing Lieutenant Governor Bolling to serve as “Virginia’s Chief Job Creation Officer” in the McDonnell/Bolling Administration
- Designating one Deputy Secretary of Commerce to Focus Solely on Rural Economic Development
- Providing a $1,000 tax credit per job to businesses that create 50 new jobs, or 25 new jobs in economically distressed areas
Altogether, the Opportunity Fund would increase $20 million over two years under McDonnell and the tax credit investment another $14 million. The gain, of course, is lower unemployment (which has soared to 7% during the Democratic administrations) and higher coporate tax revenue.
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Conservative to the core; liberal with his opinion! J.R. has been involved in politics for over a decade and has worked on several campaigns in Hampton Roads. He has served on the Executive Committee of the Republican Party of Chesapeake and the Central Committee of the Republican Party of Virginia. He is also the director of “Blogs United” in Virginia. E-mail J.R.. Follow J.R. on Twitter.
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11 Responses to "A real jobs plan, not a centrally-controlled one"
Don’t forget that McDonnell should include that his transportation plans include solving our transportation problems with toll roads.
If Virginia does not beat the national average (nationwide, a third of the money collected in tolls has to go towards paying for the collection of the tolls) this might not be an efficient use of the revenue raised. However McDonnell can point to how his plan helps solve the unemployment problem by putting more people on the public payroll. Heck, if he builds enough toll roads, he might even be able to lower the unemployment rate by 1%! (If you think this claim is an exaggeration you just are not thinking Big Government enough.)
Little David, before McDonnell wanted to fix our transportation problem with the HRTA. He championed it. Why not bring that up? Because Deeds voted for it? Voting for it is bad but, championing it is far worse. Especially if you’re the former Delegate from Va. Beach, one of the cities to be victimized by the unconstitutional HRTA.
Deeds is screwing up. He’s kissing Warner’s boots and talking smack at Gilmore. Bad move if you want independent fiscal conservatives to back Deeds since they may be disenchanted with McDonnell. The same tired mantra of saying your going to throw money at transportation and education doesn’t impress me either. Don’t get me wrong. We need transportation improvements and education, but how is that different than what office holders have already promised and left us with disappointment?
Seriously, I’m leaning towards voting for Deeds, Bolling, and Cuccinelli. There is nothing that McDonnell or supporters can say to get me to vote for him. I have his past performance to judge against his words. Deeds on the other hand, can easily talk up enough liberal butt kissing to get me to write-in a name, or again, hold my nose and vote for McDonnell.
As a reminder, Deeds praised those tax increases when he ran for AG. Seriously, he lost votes over that. He lost mine. Oh sure, I was concerned about McDonnell thinking he can regulate private and consentual oral sex even between married couples. Still, I held my nose and figured at least McDonnell will hold the line better on taxes. Of course, I was wrong. He betrayed us on HRTA. So, at the last minute, I changed my mind. I even e-mailed the McDonnell campaign before the vote and told them exactly why I changed my mind and was voting for McDonnell for AG. Did get a nice reply from the campaign to that. I guess McDonnell found it insignificant.
If the surest sign of insanity is to repeat the same act and expect different results, does Deeds intend to AGAIN brag about Warner’s tax increases?
How many votes did Deeds lose by? Does he really want to lose my vote again?
This is still Virginia. Demographics have changed, but not nearly as much as the media and Dem. bloggers will have you believe. A lot of what happened recently had to do with anger with Bush and the Republicans that wasted their time in power. Nye knows, the drill. Virginia as a whole may not mirror the 2nd District exactly, but conservative Democrats and Republicans(when they want to be) have always enjoyed success here in Virginia.
Somebody give Creigh Deeds a clue before its too late.
At a time when the state has just implemented budget cuts and the revenue forecast can’t be rosy for next year either, here Bob McDonnell wants to increase spending. I can’t imagine that No-Tax-Unless-Its-Called-A-Fee Republicans in the House of Delegates are going to manage to find the revenue to pay for these programs. You were beating up Deeds for voting for tax increases while in the GA. So, how does Bob McDonnell plan to pay for these things?
I also fail to understand how a $1,000 tax credit for creating jobs actually creates jobs. Sounds like a handout to people planning to do that anyway. This is as silly as MACRS depreciation. You don’t buy more capital assets unless you need them for a real economic reason. The tax implication might slightly change timing, but it doesn’t fundamentally change capital budgets. I would see the same here for labor. Getting a $1,000 credit for creating 50 or 25 new jobs doesn’t change the underlying economic decision on whether to hire folks or not. If you don’t need more people, you don’t need more people. If you weren’t planning on setting up a branch in Danville or the labor market their does not possess the requisite skills for the positions you need, $1,000 changes what? Equally, what is the real incentive anyway? If you hire 25 employees in Danville at an average wage in the area of $590 per week, that is costing you $767,000 in wages alone (no benefits, no payroll taxes, nothing else added). And you get a $1,000 credit for that. That doesn’t even cover the employer’s portion of payroll taxes for one employee (7.65% for the employer’s portion of OASDI and Medicare). So, I can see this leading to a boom in employment throughout the state.
More likely big companies in NoVA that were hiring anyway will get the meager benefit of this government handout.
How to pay for government? Cut spending! Tim Kaine has already ordered reductions in the past. I don’t care if it was only because tax increases weren’t feasible to cover that much and a balanced budget is mandated by law. It was the right thing to do and got done. Probably not enough or in the right areas, but I give Tim Kaine credit for that. In my opinion, don’t laugh, Kaine is a better governor than Warner. Kaine’s DNC activities and statements, I’m no fan of. Then again, I’m usually not a fan of statements made by people regardless of party who’s job is to be partisan for partisan’s sake.
Cutting is not fun. Most companies have had to cut spending. Some times you have to do it. So, do governments. You can start spending again later when you can afford it.
Tex, I agree with your theory on the 1k per job. Will a brand new to Virginia company bringing 50-100 jobs be persuaded to locate in Virgina due to 50-100k? Probably needs to be more to it. Your point going to hiring labor only because you need it, is dead on. This isn’t GOVERNMENT!!
Even in a right to work state, you have to really create heavy incentives to hire labor you don’t necessarily need.
Britt Howard,
While the HRTA was not perfect, it was better then doing nothing. Perhaps it was unconstitutional, but its goals could have been achieved anyway by having the regional authority REQUEST a tax increase which the legislature and the governor approved.
My biggest complaint about the HRTA (and this might sound strange coming from a truck driver) was that the trucking industry could largely escape the tax increases. Why? Because most truckers, unless they only operate in this area, do not buy fuel here. They buy it closer to the I-95 corridor where it is already cheaper. Regional taxes could not be included in the IFTA (International Fuel Tax Agreement) filings/payments that ensure enough taxes are paid for miles run in the state even if no fuel is purchased.
Personally I think a statewide increase in the fuels tax is best since there are needs for transportation improvements statewide, and not just in Hampton Roads and Northern Virginia. However since the votes were not there for that, then at least the HRTA would have allowed our region to go it alone and at least solve problems locally.
I will note that Creigh Deeds supports a statewide increase in the fuels tax.
I was not impressed by the list of projects that NoVA’s RTA had planned. In my opinion, they did not appear to address fundamental issues with traffic flow. On top of that, the revenue they were going to raise was not enough for big, new projects. It would have been more money for maintenance and fluff projects (like a trolley car on Columbia Pike), but that’s it. In order to fix or improve NoVA’s traffic flow, you need billions not millions. I would expect the same is true for Hampton Roads.
That isn’t to discount a regional approach, which I think is the right idea. You need a regional approach to fix the problem because it spans multiple jurisdictions. And you need the state to act as a coordinator to facilitate and encourage cooperation amongst the counties and cities. And you either need better land use planning (I know this will drive Britt crazy) or you need to charge developers the full cost of all the infrastructure required to support their new development, inclusive of the present value of future maintenance costs (which would have the same effect as land use planning).
“While the HRTA was not perfect, it was better then doing nothing.”
I strongly disagree. It is way better to do nothing than do that. It wasn’t just “not perfect” it was horrible and yes unconstitutional……for good reason!
Hey, I have no problem with the regions localities forming a organization to encourage the use of their combined leverage to benefit all the members. Recomending a tax or other form of revenue collection to pay for something is perfectly constitutional. I have no problem with that. The vote then still lies on those actually elected and held accountable by voters. This wasn’t the case with the HRTA. There certainly shouldn’t be some stacked organization that can force other localities to join, make them pay and not even have the HRTA officers subject to election as they raise everyone’s taxes and potentially mismanage budgets. Please, not another SPSA like nightmare. Good thing SPSA couldn’t levy taxes on us. They waste of money and the pain would have only stretched out longer.
Land Use Planning is a bit complicated. If a city group of localities want to demand full payment for improvements, I’m fine with that. They company chooses whether or not to do it under that condition. I believe in negotiations and each side deciding how they and the citizens can best benefit.
Britt,
Well if truck drivers could somehow join together and get our voices heard on the basis of tolls paid like the wealthy can for their issues, we’d make a big impact.
Some have said that fuel taxes will affect the economy while tolls will not. That truck drivers can just avoid the tolls and stick to the alternate routes. I wish J.R. allowed links. I could link to a piece that points out how New York state is considering legislation that would force truckers onto the New York turnpike to pay the tolls in the Fingerlakes region. This would not just affect truckers who were trying to avoid the tolls, but truckers who were taking the shortest, best route. This link would not be to something that is unusual, it would be towards what is normal. Truckers would be forced to take the much longer route and pay the toll for doing it.
I am one of those that say fuel taxes place more of a burden on the economy than tolls and that truckers can avoid them if it makes sense for them to. Sometimes time is money. That said, this is not New York. We don’t have their legislators considering some crazy legislation.
I don’t know if these tolls you speak of were pre-existing or if this is new construction. If it is new construction, why was it built? If it was pre-existing or built for generic traffic improvements, then forcing a route especially a longer one, on truckers to enforce tax collection is wrong. To me, it potentially interferes with commerce. If they want to directly tax the truckers they need to be honest and call it a tax rather than a toll. A toll gives you a choice. A tax does not. Tax the companies directly if that’s the case.
However, if this is new construction that is being built for a specific purpose and gives a favor to particular entity, that is different. The state owned Port Authority for example. Or even a new company that wants to locate here, but poses NEW traffic jams. In that case, the localities are doing a favor to the company/state owned Port Authority and they should be able to require that transport only be allowed through certain corridors and require the entity or company to pay what ever terms are agreed to.
You don’t even have to toll!!!!! You can formulate the cost of construction and charge the entity user fees. The entity can pass that charge, if they wish, on to trucking companies, reduce payments to trucking companies, pass the bill to the goods reciever, or what ever. In this manner, the trucks can also have more leeway as to which route to take. Everyone has to analyze and negotiate what they can live with. The state and localities should also factor in benefits the state and the local area get with enhanced port activity or company provided local incomes etc. when coming up with payment terms.
Now, if you still want to toll the new construction, you give electronic passes to companies paying the user fees. They pay no toll with the pass(because they paid fees), but a record of their associated traffic can be accurately established. Outside trucks and cars would pay the tolls. An EZ Pass system could be an option for frequent local users. Many car/truck drivers still have the option to take the toll way or take side roads around it.
If you need something, build it. Secure state funds, issue bonds, buy needed land etc. Privatize the toll if you want and let them deal with the long term financing as long as it is new construction.
I don’t believe in tolling existing roadways in most circumstances. There are better ways of billing the taxpayers for upkeep or future UNRELATED projects. Sometimes, legislators need to be grownups and be willing to take a hit on certain other budgets if they just need to have that new “toy”. No budget should be immune. Besides, if any allocation is immune, that special interest is subject to bloat and wasting tax dollars. Not even education funds should be automatically immune to cuts. Household and corporate budgets have to take drawbacks in hard times, so should government programs.
If it isn’t BS, if we REALLY have a traffic “Emergency”, then treat it like a freakin’ emergency and make cuts elsewhere to pay for it. If there isn’t an “emergency” then pay for it honestly or put it off til later.
[...] realizes that her business ventures will do better in a McDonnell economy than under Deeds’ [...]
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Cheers!
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