Academic R&D oversight proposed for fast-moving GO Virginia initiative

2/9/2016

A proposed $40 million effort to stimulate academic research and development for new industries is about to be folded into legislation that already has powered out of the House of Delegates to create a new framework for regional economic development in Virginia.

The House Appropriations subcommittee for higher education is expected to consider a new proposal Wednesday that would place Gov. Terry McAuliffe’s proposed research initiative under the proposed state board that would be created by the Virginia Growth and Opportunity Act, which passed the House on a 93-7 vote and the Senate Finance Committee unanimously on Tuesday.

The state growth and opportunity board, already responsible under the legislation for allocating up to $39 million for regional economic development projects under the two-year budget McAuliffe proposed, also would decide on spending for collaborative research and development projects under a system that House Appropriations Chairman S. Chris Jones, R-Suffolk, said he will propose Wednesday.

“It’s apparent to many that we need a structure to this process,” Jones said in an interview Tuesday. “I feel like this approach is a logical step in that direction.”

The State Council of Higher Education for Virginia would receive applications from research universities under the substitute proposal for House Bill 1343.

It would have them reviewed by scientific peer groups and a state advisory council. They would then be sent to the proposed new board to determine what would be funded from the pot of money that the General Assembly’s money committees will carve out of the budget on Feb. 21.

The GO Virginia initiative, as it is called, has become a driving force in budget discussions, despite legislative misgivings over the scope of state spending on economic development incentives under the past two governors and concern over a botched state investment in a Chinese-owned factory that never was built in Appomattox County.

The reason is a combination of persuasion by a coalition of high-powered corporate executives across the state and continuing concern over the future of Virginia’s economy if the federal government returns to deep cuts in defense and domestic spending under budget sequestration.

“We all had a wake-up call with sequestration,” said Sen. Janet D. Howell, D-Fairfax. She is co-sponsoring the Growth and Opportunity Act, Senate Bill 449, with Majority Leader Thomas K. Norment Jr., R-James City. “We realized we had to change the way we do business,” Howell said.

The change advocated by corporate leaders focuses on regional cooperation instead of competition among localities within regions for economic investments that create jobs and stimulate the economy.

“The region is the driving force of the economy,” Hampton Roads business leader John O. “Dubby” Wynne told the Senate Finance Committee. “It’s not the state, it’s not the locality.”

Wynne is part of a coalition of business leaders that includes Dominion CEO Thomas F. Farrell II in Richmond, Roanoke nursing home magnate W. Heywood Fralin, Northern Virginia health technology executive Thomas A. Stottlemyer, and Ben Davenport, chairman of the First Piedmont Corp. in Danville, whom Norment called “the dean of Southside.”

They are joined by leaders of Virginia colleges and universities who see the initiative as a way to advance academic research and development in technologies that hold commercial promise for future industries in the state’s economy.

“We are completely on board,” Virginia Commonwealth University President Michael Rao told the Senate committee.

The higher education role in the initiative may be guided by the legislation to be introduced Wednesday by Jones, who originally proposed the creation of a Commonwealth Competitiveness Board to encourage and oversee collaboration on research by state colleges and universities under the governor’s proposed Higher Education Research Initiative.

Instead, his new proposal would give that oversight to the proposed GO Virginia board. It would receive recommendations for funding of collaborative research projects from an advisory council that would include representatives of SCHEV, the House Appropriations and Senate Finance committees, the Department of Planning and Budget, the Center for Innovative Technology, and three citizen members of the new state board.

“They form a very important bridge back to the board as business people,” Appropriations Staff Director Robert P. Vaughn said in an interview.

The GO Virginia initiative has bipartisan support in both chambers, as well as a rare degree of cooperation between McAuliffe and Republican adversaries in the House, such as Majority Leader M. Kirkland Cox, R-Colonial Heights, and Del. Timothy D. Hugo, R-Fairfax, chairman of the House Republican Caucus. They are carrying companion bills to create the state board and up to 10 regional councils to award grants to regional projects.

In the Senate, Norment and Howell are sponsoring one bill, while Sen. Frank M. Ruff Jr., R-Mecklenburg, and Minority Leader Richard L. Saslaw, D-Fairfax, are carrying the companion measure to create the regional framework for awarding grants.

“What you would do by adopting this legislation is grease the skids for regional cooperation,” Davenport told the Senate committee.