BY MICHAEL MARTZ, RICHMOND TIMES-DISPATCH, November 26, 2018.
With Virginia’s Medicaid program poised to expand coverage for hundreds of thousands of people, the state is considering a proposal to increase reimbursement rates for doctors to encourage them to provide care to more patients under the program.
The Department of Medical Assistance Services has asked Gov. Ralph Northam to include $19.1 million in his proposals next month for the two-year budget to boost Medicaid reimbursements for primary care doctors and reduce the gap with the federal Medicare program for the elderly.
The proposal, limited to the second year of the budget, is part of an emerging state plan to attract more doctors who are willing to participate in Medicaid, a shared state and federal health care program for poor, elderly and disabled Virginians.
With Medicaid expansion set to begin Jan. 1, “the experience of accessing care could still be a challenge across the commonwealth,” Dr. Jennifer Lee, director of the state Medicaid office, told a joint legislative subcommittee on Monday.
State legislators are concerned about the widening gap between state reimbursement rates to doctors in Medicaid and those in Medicare, but they want more information about the potential costs of closing the gap before they convene in January for a 45-day session that will include revisions to the two-year budget adopted this year.
“We need to know sooner than later,” said House Appropriations Chairman Chris Jones, R-Suffolk, who also chairs the Joint Legislative Subcommittee for Health and Human Resources Oversight. “We can’t hit what we can’t see.”
DMAS, as the state Medicaid office is known, says the gap between state reimbursements to doctors in Medicaid and Medicare has widened in the past eight years, especially for preventive pediatric services.
In the 2010-2011 fiscal year, Medicaid reimbursed doctors for those services at 94 percent of the rates paid for Medicare. Lee said the reimbursement has fallen to 71 percent of the rates paid for Medicare in the current fiscal year — a drop of 23 percentage points.
Similarly, reimbursement for other pediatric services has dropped from 83 percent of the Medicare rate eight years ago to 75 percent. The fall has been slightly less for reimbursement of adult preventive and primary care services, which went from 73 percent to 66 percent over the same period.
While the problem isn’t new, the urgency is greater because the state expects to enroll 360,000 people under expanded Medicaid eligibility in the first year, 375,000 by the end of the biennium in mid-2020 and ultimately 400,000 people.
“The combination of declining rates relative to other payers, significant limitations in primary care access throughout the state, and the increased demand for primary care services following Medicaid expansion to an additional 400,000 Virginians creates a pressing need to bring Medicaid rates closer to parity with the market,” DMAS states in its funding request to the governor’s budget office.
Northam isn’t saying what he’ll recommend until he submits his budget proposal to the General Assembly money committees on Dec. 18, but spokeswoman Ofirah Yheskel said, “As a provider, the governor is uniquely interested in discussions on health care in Virginia.” Northam is a former Army doctor and is a pediatric neurologist by occupation.
In its budget request, the agency estimates that raising physician rates to 80 percent of what the state pays Medicare would cost about $40 million for the existing Medicaid population, with the expense split almost evenly between the state general fund and the federal government.
For the expansion population, the cost would be almost $25 million, with almost all of it borne by the federal government under the Affordable Care Act and the state’s share covered by a new provider assessment on hospital revenues.
Separately, DMAS responded to a legislative request about bringing reimbursement to 75 percent of the Medicare rate for the four specialty areas with the lowest rates. They are: pediatric, already at 74.9 percent; emergency room, at 69.8 percent; adult preventive and primary care at almost 66.8 percent; and anesthesia at 66.4 percent.
Currently, Medicaid officials say access to care is inconsistent under the program. Parts of the state are left with less than two-thirds of their primary care needs served, primarily in rural Virginia, including the Eastern Shore and Northern Neck.
Lee said her agency estimates that 63 percent of physicians participate in Medicaid and 71 percent of those are taking new patients, but DMAS hopes to get a better understanding through a survey it is conducting with Virginia Commonwealth University.
The partners have sent the survey to all primary care physicians in the state “to assess capacity and willingness to care for [the] Medicaid expansion population.” A second survey has been sent to providers who had not responded to the first questionnaire.
The state also is working with free clinics, including CrossOver Healthcare Ministry in Richmond, and federally qualified health centers to expand their capacity to care for Medicaid patients.
But DMAS is relying most heavily on the six health insurance plans that will oversee 95 percent of the services delivered by the expanded program under managed care organizations.
Lee said an outside consultant, Health Services Advisory Group, confirmed independently that the six plans have adequate health care networks to serve the expanded population.
The private health plans say they are ready, but they acknowledge the limits of what they know about the people they will serve.
“The basic challenge is who’s going to seek care, where and when, and for what reason,” Doug Gray, executive director of the Virginia Association of Health Plans, said Monday.
How Virginia sealed the deal on Amazon’s HQ2, ‘the biggest economic development project in U.S. history’
BY MICHAEL MARTZ, RICHMOND TIMES-DISPATCH, November 16, 2018.
As autumn began, Virginia lawmakers were not completely sold on the deal they had been putting together for a year to land Amazon’s second headquarters in the Northern Virginia suburbs.
The lure of a $5 billion investment and 50,000 high-paying jobs was powerful, but so was the fear of having to justify $1 billion in direct state incentives to a company valued at $1 trillion.
Members of the Major Employment and Investment Project Approval Commission also were concerned about the ability of any community in Northern Virginia’s already teeming and traffic-clogged suburbs to handle the massive influx of people.
That’s when Amazon made a pivotal decision to divide the project in half, ultimately awarding 25,000 new jobs and up to $2.5 billion in investment each to Virginia and New York about six weeks later.
“That’s when I knew I could support it,” said House Appropriations Chairman Chris Jones, R-Suffolk, who acknowledged last week that until the decision, “I wasn’t there yet.”
House Finance Chairman Lee Ware, R-Powhatan, resigned from the MEI commission in February “because of the size of the subsidy we were offering Amazon.”
“I couldn’t justify taxpayers subsidizing one of the wealthiest companies in the world,” said Ware, who intends to vote against the proposed incentives when the General Assembly considers them in January. “The company picked two prime development sites it might have picked without inducements.”
Ware said he was not alone in his concern, even though the state had fashioned a package of direct incentives less than one-third of the size promised by New York with the requirement that Amazon produce the jobs and additional tax revenue before it would get any money from Virginia’s general fund budget.
“I think there was a collective sigh of relief that we were now dealing with something more manageable,” Appropriations Director Robert Vaughn said in an interview the day after Amazon announced it would build half of HQ2 in Arlington County in Crystal City and Pentagon City next to Reagan Washington National Airport.
The package that MEI approved unanimously on Oct. 25 ultimately amounts to $1.85 billion, but more than two-thirds of it represents long-term state investments in higher education and regional transportation projects that Virginia policymakers already were committed to doing to establish the state as a leader in the high-tech economy.
The commission — made up of key lawmakers from the House and Senate, working with members of Gov. Ralph Northam’s Cabinet — played a pivotal role in shaping a package that didn’t obligate the state to support affordable housing initiatives in the region or use statewide funds to pay for transportation improvements in Northern Virginia.
Legislators and members of the administration tutored the Virginia Economic Development Partnership on the realities of the state’s general fund budget, which they were reluctant to use to pay for incentives without a measurable payout for the entire state.
“VEDP’s role was to get the deal done,” said Secretary of Finance Aubrey Layne, who sits on the panel as a nonvoting member. “My role was to make sure we were partners and kept in communication with MEI and the money committees.”
Most important to legislators, the final package didn’t commit general fund dollars as incentives until Amazon has hired people at salaries averaging $150,000 a year and generated new revenue to pay for them.
“The positive factor was we had to have the money in our checking account before the check went into the mail,” said Sen. Frank Ruff, R-Mecklenburg, chairman of the commission and a longtime representative of rural Southside localities that will want to know how they will benefit from the deal with Amazon.
State officials estimate the Amazon project ultimately will generate net tax revenue of $3.2 billion over 20 years, after subtracting the $550 million Virginia has committed to paying the company as direct incentives for creating 25,000 jobs. Even after accounting for investments in higher education, transportation and the expected growth in K-12 enrollment, the state expects to receive a net tax benefit of at least $1.2 billion.
“We have positive revenue from day one,” Stephen Moret, president and CEO of the Virginia Economic Development Partnership, told members of the House Appropriations and Finance committees on Tuesday, hours after Northam and Amazon officials announced the deal in Arlington.
For Moret, the Amazon deal represented an economic development triumph that was impossible to imagine when he took the helm of the embattled state authority less than two years ago as General Assembly leaders and then-Gov. Terry McAuliffe were preparing sweeping reforms of the way it operates.
“To the best of our knowledge, this is the biggest economic development project in U.S. history, certainly in Virginia,” he told the House committees at their annual retreat in Harrisonburg.
Former Secretary of Commerce and Trade Todd Haymore pushed for hiring Moret two years ago, even though legislators wanted to wait for the adoption of reforms at VEDP.
“This would not have happened if not for the reforms,” Haymore said, “and it would not have happened if Stephen had not been the quarterback.”
McAuliffe and Haymore were flying to Southwest Virginia in a state helicopter on Sept. 7, 2017, when they got the word that Amazon had launched a North American sweepstakes for HQ2, a mammoth attempt to match the company’s main headquarters in Seattle.
“I said, ‘We’ve got to win this!’ ” the former governor recalled. “Literally, it would finish what we started in diversifying and building a new economy.”
McAuliffe directed Haymore to arrange plane tickets to fly to Seattle the next day and set up a meeting with Jeff Bezos, founder and CEO of the company, as well as owner of The Washington Post and a home in the District of Columbia.
Haymore called Holly Sullivan, an Amazon official whom he and the governor knew from their successful bid three months earlier to establish the company’s East Coast hub for Web Services near Washington Dulles International Airport in Fairfax County.
Sullivan, who previously had worked as economic development director in Montgomery County, Md., one of the 20 finalists for HQ2, advised McAuliffe to stay in Virginia.
“She said, ‘Maybe we’re not ready for him to come just yet,’” the ex-governor recalled with a chuckle in an interview on Friday.
Haymore, who had worked as secretary of agriculture under McAuliffe before taking the commerce and trade post, joked, “It’s one of the only times in four years of working with Governor McAuliffe where I told him, ‘You will not do this’ … and he listened!”
Instead, McAuliffe and Haymore began a feverish attempt to pull together a package of potential sites for the project from all across the state’s urban crescent, not just Northern Virginia, to meet Amazon’s Oct. 19 deadline for proposals.
But first, McAuliffe said, he used his contacts at the company to ensure that the Richmond area and Hampton Roads wouldn’t be wasting their time by investing resources in a search that ultimately would lead to Northern Virginia.
“I was 100 percent assured there were no preconceived notions,” he said.
McAuliffe’s next move was talking to new Richmond Mayor Levar Stoney, a protégé who had served in his Cabinet, and Virginia Beach Mayor Will Sessoms about their regions’ interest in competing for the project.
The state needed professional help to pull together such a complex package in such a short time, so it turned to McKinsey & Company, a global management consultant company, to run the process.
That required money, so Haymore worked with then-Finance Secretary Ric Brown to find dollars they could use from the governor’s contingency fund to pay McKinsey.
But McAuliffe wasn’t willing for the state to foot the entire bill.
“If people want to get involved in this thing and they’re serious, they’re going to have to pony up some money,” he said.
The state staked $1 million, with an additional $1 million raised from economic development partnerships in the Richmond, Hampton Roads and Northern Virginia areas, including $150,000 from Virginia Tech.
“We had a coalition of the willing,” Haymore said. “We reached out to the universities, and Virginia Tech stepped up to the plate.”
Tech, which announced last week that it would build a $1 billion Innovation Campus adjacent to Amazon in the Potomac Yard area of Alexandria, also was the only university to submit a complete financial model for the bid, Moret said.
The final package includes $250 million in state funds for Tech, as well as $125 million to help George Mason University expand its existing Arlington Campus with a new digital innovation institute and school of computer science. The master’s level projects are part of a higher education strategy that includes $710 million to help finance an additional 12,500 to 17,500 undergraduate degrees in computer science and related fields at institutions across Virginia.
“If the Tech piece had not been there, I probably would not have been a big supporter,” said Del. Steve Landes, R-Augusta, one of five House members on the MEI commission.
Virginia pitched 10 potential sites — including three in the Richmond area — in the initial round of proposals from 238 metropolitan areas across North America. The Richmond-area sites were Tree Hill Farm in eastern Henrico County, city-owned land on North Boulevard in Richmond, and the site of the former Galleria project in Chesterfield County.
When Amazon revealed its short list in January, only Northern Virginia was on it, with four potential sites, including the one in Crystal City that won the project last week. The remaining 20 metropolitan areas also included Montgomery County, Md., and Washington, D.C.
Haymore believes the effort and money spent in the Richmond area and Hampton Roads could still pay off, just as it did in Nashville, Tenn., which Amazon chose last week for its East Coast operations hub with 5,000 jobs.
Think of HQ2 as the homecoming queen, he said. “There’s also going to be a lot of very attractive economic development projects that will be part of the court.”
On March 2, about six weeks after Amazon narrowed the field, Northam, Maryland Gov. Larry Hogan and Washington Mayor Muriel Bowser sent a letter to Bezos that offered “a shared vision of the future” among the three competing jurisdictions.
“We recognize that if one of our jurisdictions earns the honor of being selected for HQ2, we all win,” they wrote.
The HQ2 sweepstakes forced Virginia, Maryland and Washington to cooperate for a project that would employ people from around the region in high-paying jobs that would benefit all of their economies.
“We decided it was a very big opportunity for the region,” said Jason Miller, executive director of the Greater Washington Partnership, a group of corporate CEOs for a region stretching from Richmond through Washington to Baltimore that produced 11 proposals in the first round of bidding for HQ2.
With all three jurisdictions in the second round, they focused on fixing a public asset critical to their hopes of landing the project — the Metro transit system, which needed a $15.5 billion repair job over the next 10 years.
“Every physical site [considered by Amazon] in Maryland, the District and Northern Virginia was next to a Metro stop,” Miller said.
Virginia’s decision to contribute an additional $154 million a year as its share of the $500 million required annually to repair the system was a crucial moment in the region’s bid for HQ2, he said. “Once we achieved the full amount, it was a pretty clear signal that because of the importance of the system to both the economy and Amazon, the region can come together and tackle its most pressing issues.”
The budget adopted by the General Assembly on May 30 and signed by Northam on June 7 also included $28 million to boost production of undergraduate degrees in computer science and other technical fields and $25 million for CyberX, an ambitious idea conceived by Del. Jones and Virginia Tech President Tim Sands. Both investments are central to Virginia’s effort to jump-start a talent pipeline for Amazon and other potential projects that rely on highly skilled workers in emerging technologies.
“CyberX showed Amazon we’re serious,” said Vaughn, staff director of Appropriations, who was part of the meetings between Jones and Sands that led to the surprise initiative in the budget initially approved by the House in February.
Those commitments ultimately may have been more important to Amazon than the direct incentives to the company for the jobs it created, said Layne, a former Virginia Beach businessman and state transportation secretary.
“Incentives didn’t really drive the decision,” he said. “At the end of the day, it was the workforce development and education pieces, which we already had decided were going to happen regardless.”
The MEI commission voted unanimously on Oct. 10, 2017, on an initial proposal that would have paid $22,000 a job — almost one-third of what Virginia promised Micron Technologies to add 1,100 jobs at its Manassas plant and, more importantly, keep the 1,400 jobs already there.
The commission never wavered on its position, Jones said. Instead, it improved the deal by negotiating for the average salary to increase from $100,000 to $150,000 a year, plus benefits.
“We were not going to take extraordinary measures to land the company,” he said.
The commission balked at a proposal for $100 million in state subsidies to maintain affordable housing in the region — which both legislators and administration officials agreed is the proper role of local governments and private developers.
It also made clear in September — the day Northam ordered an emergency evacuation of the Virginia coast for Hurricane Florence — that it wouldn’t allow money from the general fund or statewide transportation fund to pay for projects in Northern Virginia for Amazon.
Instead, the state is using a combination of federal money restricted to Northern Virginia and money from the toll concession for express lanes on Interstate 95 to pay for five projects, including new entrances to two Metro stations, improvements to U.S. 1 and a pedestrian bridge from Crystal City to Reagan National Airport.
“It was not taking any money from anyone else in the commonwealth — that was key,” Layne said.
Still, the scope of the project and the $1 billion incentive for 50,000 jobs was daunting both for legislators and some members of the administration, so Amazon’s message that it was considering splitting the project was welcome in Richmond.
“We felt that half was a better fit for us because it was more digestible,” Jones said.
Senate Finance Co-Chairman Emmett Hanger, R-Augusta, said splitting the project allowed him to vote for the final package on Oct. 25.
“It helped me because of the reduced level of incentives,” Hanger said Thursday.
Virginia still has a chance to get more jobs out of the deal because the state committed up to $200 million in incentives for a second phase with an additional 12,850 jobs — or $15,000 a job, almost a third less than the first phase.
“Having MEI as part of economic development is a very, very positive thing for the commonwealth,” Haymore said. “I would put it on the list of reasons we landed Amazon.”
BY GRAHAM MOOMAW AND MICHAEL MARTZ Richmond Times-Dispatch, September 26, 2018
An old political game has a new playbook, as a House of Delegates elections committee prepares to consider a new redistricting plan from House Republicans — this one with some Democratic support.
Del. Chris Jones, R-Suffolk, chairman of the House Appropriations Committee, filed a new plan on Wednesday to address racial gerrymandering that a federal court panel found in 11 majority-minority House districts.
The new effort, backed by House Speaker Kirk Cox, R-Colonial Heights, attempts to fashion a legislative compromise with bipartisan support to head off a potential move by Gov. Ralph Northam to let federal judges redraw House district boundaries before all seats come up for election next year.
“In discussions with members on both sides of the aisle, we agreed that we should have a legislative solution,” Jones said of his plan, which is backed publicly by at least four House Democrats and Sen. Lionell Spruill Sr., D-Chesapeake.
The glimmer of bipartisanship could force Democrats to choose between trying to strike a deal with Republicans or holding out for a court-drawn map that could be more favorable to their party in the 2019 elections.
“We’ll review the new proposal,” said Northam spokeswoman Ofirah Yheskel.
No dramatic change
The proposal, which the House Privileges and Elections Committee will consider on Thursday, would not dramatically alter the partisan makeup of the House, where Republicans have a 51-49 edge.
The new proposal does not draw any two incumbents into the same district. It would keep the same political balance as House Democrats proposed for seven of the 11 districts that the three-judge panel found unconstitutional, including four districts in the Richmond area.
“This bill does not advantage one side versus the other,” Jones said.
In the Richmond area, the Jones map wouldn’t produce major swings in current districts that appear competitive. Several Democratic-held seats would gain Republican voters, but probably not enough to move them into battleground territory.
The suburban seats held by Dels. Schuyler VanValkenburg, D-Henrico, and Dawn Adams, D-Richmond, would tilt slightly more Democratic. Farther south, GOP-held districts represented by Dels. Roxann Robinson, R-Chesterfield, and Riley Ingram, R-Hopewell, would become a little more Republican.
The biggest geographic changes would occur in two districts represented by Dels. Lamont Bagby, D-Henrico, and Delores McQuinn, D-Richmond, both of whom would see their districts stretch farther into new suburban and rural territory.
Bagby’s new district would lose Charles City County and stretch north to Ashland. McQuinn’s district would shift east to cover more of eastern Henrico County and less of northern Chesterfield County. Both districts would gain the same amount of Republican voters under Jones’ plan as they would under the Democratic proposal.
Two districts closer to Richmond’s urban core, represented by Dels. Jeff Bourne, D-Richmond, and Betsy Carr, D-Richmond, would see slight changes. Both look the same under the Jones proposal and the Democratic plan.
Del. Lashrecse Aird, D-Petersburg, would see a substantial GOP shift in her district, losing parts of Hopewell and areas east of Petersburg and gaining a chunk of western Chesterfield currently represented by Cox.
Cox’s district would become more Democratic by shifting north to cover new areas of Chesterfield near the county airport and Chesterfield Courthouse.
Oct. 30 deadline
The House faces an Oct. 30 deadline to redraw its electoral map after the federal panel found that lawmakers unconstitutionally used race to pack additional African-American voters into 11 majority-minority districts during the 2011 redistricting process.
Republicans are appealing the ruling to the U.S. Supreme Court. The outcome of that appeal is uncertain, but if the General Assembly fails to act by the lower court’s deadline, the judges would appoint an outside expert to draw a remedial map.
Both parties had introduced redistricting proposals over the past few weeks, but neither seemed to gain traction as a serious legislative proposal.
Jones, an influential dealmaker who was the architect of the existing House map, was not in Richmond for the Aug. 30 special session on redistricting. Since then, he’s created a map that has drawn support from at least four Democratic lawmakers, mostly from the Hampton Roads area.
“I believe that the focus in 2019 will be a more permanent solution — to create a system that fairly draws political lines,” said Del. Kelly Convirs-Fowler, D-Virginia Beach, one of the Democrats supporting Jones’ effort. “But at this time, this is something that the legislature is required to address, and Hampton Roads can lead these efforts and bring everyone to the table.”
Last week, Republicans released a redistricting proposal sponsored by Del. Rob Bell, R-Albemarle. That map will remain on the table, but Bell intends to amend his plan to correct an oversight that resulted in Del. Marcia Price, D-Newport News, being drawn into the same district as Del. Mike Mullin, D-Newport News.
Toscano and Cox
House Minority Leader David Toscano, D-Charlottesville, said his caucus will review the new proposal, but he cautioned that the earlier GOP plan didn’t solve the constitutional issues. He also questioned why Republicans are insisting on a map that doesn’t “upset the partisan balance” when that has never been a goal laid out in the law or the court case.
“We’re not going to embrace a legislative fix just for the sake of having a legislative fix,” Toscano said. “It’s got to be constitutional. So we’ll be looking at this new map with an eye of assessing its constitutionality.”
Cox, the House speaker, indicated Wednesday that he sees Jones’ redistricting effort as the best option for legislative action.
“Delegate Bell has filed a plan that lays out a legal marker to demonstrate to the court and the public what a politically neutral, race-blind map looks like, but the speaker is supportive of and eager to find a legislative solution through bipartisan collaboration and compromise,” said Cox spokesman Parker Slaybaugh.
Del. Cliff Hayes Jr., D-Chesapeake, who supports Jones’ proposal, said in a statement that the public expects legislators to find the “best alternative to no agreement,” as they did this year on Medicaid expansion and raising the felony larceny threshold.
“The greater good would be, as ordered by the court, to work together in a bipartisan manner to develop a redistricting plan by October 30th that in every way gives Virginians the opportunity to vote for the person of their choice,” he said in the statement.
In addition to Convirs-Fowler and Hayes, two other House Democrats confirmed on Wednesday that they support Jones’ effort to find a legislative compromise — Del. Steve Heretick, D-Portsmouth, and Del. Luke Torian, D-Prince William, ranking Democrat on Appropriations.
Heretick was unhappy with the Democratic plan Bagby proposed in August, both because of the map it produced and “the process some of my own folks went about to get there.”
He commended Jones for reaching out to legislators in both parties. “As with all the variations, I’m trying to keep an open mind, but at least this one I’ve had a full opportunity to have input,” he said Wednesday.
Del. Jay Jones, D-Norfolk, confirmed Wednesday that he has discussed the issue with the Appropriations chairman but said he has not committed to supporting the proposal.
Spruill, who served 22 years in the House before moving to the Senate, said: “I’m working with Chris Jones on getting this done. It should be the General Assembly’s job to fix this, not the court.”
BY MICHAEL MARTZ Richmond Times-Dispatch, June 10, 2018
With the launch of a state initiative aimed at attracting Amazon and other high-tech companies to Northern Virginia, the timing couldn’t have been better for Virginia Tech and George Mason University to each receive a $250,000 grant to hire a top researcher in cybersecurity.
The two academic research powerhouses are likely to be big players in an ambitious new initiative, dubbed CyberX, that Virginia is launching in the budget that Gov. Ralph Northam signed on Thursday.
The project seeks to develop marketable technologies and a skilled labor force in cybersecurity to boost the state’s economy.
“Northern Virginia has over 30,000 unfilled cyber- and technology-related jobs, a number that will grow if Amazon chooses the Washington, D.C., region for its second headquarters,” state House Appropriations Committee Chairman Chris Jones, R-Suffolk, said Friday.
“CyberX is an initiative born to meet the needs of Virginia technology-based industries by creating a partnership with Virginia’s colleges and universities that offer degrees in cybersecurity, data analytics and autonomous technologies,” said Jones, who conceived the plan with his staff and Virginia Tech President Tim Sands in February as part of a proposed budget that will become law on July 1.
Jones is a member of the legislative commission overseeing Virginia’s bid to land the Amazon HQ2 project — with a potential $5 billion investment and 50,000 new jobs.
He and other state officials would not comment on the contents of a state incentive package to land the coveted headquarters, but Jones confirmed the state would rely heavily on indirect incentives, such as investments in higher education and transportation improvements that Amazon has made priorities in the high-profile site search it began in September.
Virginia Tech will lead the CyberX project, known formally as the Commonwealth Cyber Initiative, building on work already being done at the university’s Hume Center for National Security and Technology in Arlington County.
“We are pleased the budget signed this week supports higher education and industry’s efforts to address Virginia’s critical workforce needs in cyber and technology,” Sands said in a statement on Friday. “We are encouraged by the recognition that collaborative alignment of university research with industry’s needs can provide a path toward economic sustainability.”
Tech “is already a recognized leader in the cybersecurity sector,” he said, “and we look forward to working alongside our higher education colleagues from around Virginia on the Commonwealth Cyber Initiative to enhance and integrate research, innovation, and education in cyber.”
George Mason is likely to become one of the main spokes connected to the initiative’s hub, planned in Tysons Corner as the center of a research and teaching enterprise with a statewide reach.
“We will see how it shakes out, but I expect it to be a great place for scholars from Virginia Tech and scholars from George Mason to potentially get together,” GMU President Angel Cabrera said Wednesday. “Anything that creates a bigger critical mass of research in this area will benefit everybody.”
“Northern Virginia is really probably ground zero for cybersecurity in the nation,” Cabrera said.
Northam announced last week that Virginia Tech and George Mason will receive “eminent scholar recruitment” grants through the Commonwealth Research Commercialization Fund, which the Center for Innovative Technology administers and the state finances. The grants must be matched by a combination of university and private industry funds, and show potential for commercial use of cyber research.
“The goal of commercialization with potential economic impact is paramount,” said Nancy Vorona, vice president of research investment at CIT, based in Herndon.
Both universities have industry sponsors to help match the state funds. CACI International, based in Arlington, will contribute $125,000 for the partnership with Virginia Tech. Lockheed Martin Corp., headquartered in Bethesda, Md., will provide $200,000 for the project with George Mason.
Virginia Tech said the timing of the grant with the new state initiative is coincidental but fortunate.
“The Eminent Researcher Recruitment Program grant, while not directly related to the [cyber initiative] budget appropriation, provides funding to support the initiative by enhancing our efforts to attract another talented faculty member and researcher to Virginia Tech,” Sands said.
Tech spokesman Michael Stowe said the eminent researcher recruitment grant, overseen by Charles Clancy, director of the Hume Center, is not “related to or affiliated with” a similar grant to Kenneth Ball, dean of the Volgenau School of Engineering at George Mason.
However, Stowe added, “to the extent public universities in the commonwealth are investing in hiring high-caliber faculty in cybersecurity, that bolsters the cyber aspirations of both the Commonwealth Cyber Initiative and Virginia overall.”
The cyber initiative emerged publicly in the House budget proposed in February with $40 million.
The General Assembly scaled back the state investment to $20 million in the second year of the final budget Northam signed.
Virginia Tech would receive $10 million to lease space and establish hub operations in Northern Virginia.
The state research investment fund would receive $10 million to recruit research faculty at the hub and “spoke” institutions across the state. The budget also appropriates $5 million in existing state bonds for equipment and renovations.
The purpose is clear in the budget: “The Commonwealth Cyber Initiative shall be established to serve as an engine for research, innovation, and commercialization of cybersecurity technologies, and address the Commonwealth’s need for growth of advanced and professional degrees within the cyber workforce.”
The initiative emerged well after the deadline for public colleges and universities to submit applications for the eminent researcher recruitment grants — one of five programs funded through the Commonwealth Research Commercialization Fund at CIT.
The other programs include matching grants for a wider array of public and private higher education institutions, as well as research consortia such as the Commonwealth Center for Advanced Logistics Systems, based in Colonial Heights.
The center is a partnership of five higher education institutions, the Crater Planning District Commission and an industry sponsor.
It received two grants, each for $100,000, which must be matched at least 1:1. Both grants involve biomedical research at Virginia Commonwealth University, which also received a $100,000 grant for another biomedical project.
“It’s a great shot in the arm,” said Mark Manasco, president and executive director of the center.
Altogether, CIT received 120 applications for the five programs under the commercialization fund, which is administered through a rigorous process that includes review by subject-matter experts and then by the Research and Technology Investment Advisory Committee made up of university, industry and economic development experts.
The committee makes recommendations to the CIT board of directors to decide. This year, the center awarded $2.7 million in grants.
“This strong turnout demonstrates the need for funding at a critical time in these research commercialization projects,” said CIT’s president and CEO, Ed Albrigo, in a news release from the governor’s office. “We look forward to monitoring the progress of the latest recipients as they generate significant long-term benefits for the commonwealth’s economy.”
The biggest grants went to Tech and Mason to recruit “eminent researchers” and establish research programs that university officials predicted will lead to even bigger contracts with federal defense and other agencies focused on cybersecurity.
“It is a very smart way for the commonwealth to plant seeds that are very significant for our economy,” said George Mason’s Cabrera.