Deal reached on state economic development reform
Compromise legislation to reform the Virginia Economic Development Partnership will come before the General Assembly today as one of the last and most substantial decisions of the session.
Negotiators for the House of Delegates and Senate, working closely with Gov. Terry McAuliffe’s administration, hammered out a final deal Friday night. It ensures that some members of the partnership’s current board of directors will remain on the reconstituted body, which will shrink in size while ensuring that all regions of Virginia have representation.
“It could have been a disaster if we didn’t keep the leadership of the current board involved,” said Sen. Frank M. Ruff Jr., R-Mecklenburg. “There has to be a period of transition.”
But the heart of the legislation, proposed by Ruff and House Appropriations Chairman S. Chris Jones, R-Suffolk, is the establishment of mechanisms to ensure accountability by the VEDP board and staff, as well as the businesses that receive public financial incentives to locate or expand operations in Virginia.
“I think this compromise will certainly put VEDP back on track,” Jones said Friday night.
The partnership was the target of a withering critique last fall by the Joint Legislative Audit and Review Commission, the legislature’s watchdog agency. It found that the multimillion-dollar operation had been poorly operated and supervised, with little oversight of the financial incentives granted to business prospects or assurance they would live up to their commitments.
The legislation will establish a new division within the partnership to oversee financial incentives and assure that companies comply with their terms. It also will create an internal auditing arm to monitor the organization.
International trade will remain a division of VEDP under the legislation, rather than splitting off as an independent corporation as required under legislation adopted a year ago.
The new board will shrink from 24 to 17 members under the compromise, with the governor’s office represented by the secretaries of finance and commerce and trade and the legislature represented by the staff directors of the Senate Finance and House Appropriations committees.
The chairman of GO Virginia, a new regional economic development initiative, also will serve on the VEDP board, as will the director of the Port of Virginia. The governor will have seven citizen appointments and the legislature will have four, but the board must include a representative of each of the nine regions for GO Virginia.