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New House panel formed to shepherd Amazon package through assembly

BY MICHAEL MARTZ, Richmond Times Dispatch, January 15, 2019

As Amazon’s plan for a new headquarters in Arlington County moves from vision to reality, a new House Appropriations subcommittee has formed to shepherd a proposed package of state commitments through the General Assembly to ensure Virginia lives up to its promises, especially in developing a higher education pipeline for high-tech talent.

Appropriations Chairman Chris Jones, R-Suffolk, will chair the five-member subcommittee that he is appointing to oversee the implementation of a $1.85 billion incentive package for the $2.5 billion Amazon headquarters, which must create at least 25,000 high-paying jobs for the money.

“This is to make sure we get it right,” said Jones. He also is carrying one piece of legislation to create a new state fund for $550 million in cash incentives that Virginia would begin to pay four years after the jobs are created and begin to generate new income tax revenue for the state.

Most of the package, about $1.1 billion over the next 20 years, represents broad investments in Virginia colleges and universities to produce 25,000 to 35,000 degrees in computer science and related fields for Amazon and other high-tech companies that need highly skilled talent to grow.

“It’s bigger than Amazon,” Jones said.

The higher education package would include more than $700 million in funding for production of bachelor’s degrees, most of them at institutions outside of Northern Virginia, as well as up to $375 million for master’s degree programs that Virginia Tech and George Mason University would establish in the region around Amazon.

The state’s higher education commitments are not part of its written agreement with Amazon, but would be guided by proposed legislation to create the “Tech Talent Investment Program and Fund.” The legislation has been introduced by Del. Nick Rush, R-Montgomery, and Sen. Frank Ruff, R-Mecklenburg.

Ruff also has introduced legislation, as a companion bill to Jones’ measure, to create the “Major Headquarters Work Force Grant Program” for cash incentives, potentially including an additional $200 million if Amazon creates an additional 12,850 jobs at the National Landing site at Crystal City in Arlington.

In addition to Jones, the new subcommittee will include Rush, chairman of the Appropriations subcommittee on higher education; Del. Luke Torian, D-Prince William, chairman of the capital outlay subcommittee; Del. Riley Ingram, R-Hopewell, chairman of the economic development subcommittee; and Del. Steve Landes, R-Augusta, vice chairman of the full committee.

Jones, Landes and Rush also are members of the Major Employment Investment Committee that vetted the Amazon deal for the legislature, as is Ruff.

The budget that Gov. Ralph Northam introduced last month includes $8.3 million as an initial state investment in the tech talent pipeline, but Jones said he expects the state to require “significantly more” to enable participating colleges and universities to establish and expand degree programs in the desired fields.

“The universities are going to need to present plans that deliver so many degrees, at an affordable cost, in a reasonable time frame,” he said.

The state already included $28 million in the two-year budget adopted last year, before Amazon chose the Arlington site, to boost production of degrees in high-tech fields at public colleges and universities.

Northam also included Virginia Tech’s proposed $1 billion “Innovation Campus” for master’s degrees in the capital budget, which would require $250 million in state money that the university would match while raising an additional $500 million from various non-state sources to pay for the project in the Potomac Yard area of Alexandria.

The package the state unveiled in mid-November also includes $125 million in state money that George Mason would match to expand its master’s degree programs and facilities in Arlington.

Virginia’s commitment to boosting higher education development of high-tech talent was a decisive factor in Amazon’s decision to choose Arlington as one half of its much-ballyhooed $5 billion plan to build a second headquarters. Long Island City, N.Y., was chosen for the second location.

“It’s clear they ultimately weighed talent far greater than cost,” Stephen Moret, president and CEO of the Virginia Economic Development Partnership, said in a presentation on Monday to the State Council of Higher Education for Virginia.

Moret said the Amazon deal would generate an additional $3.8 billion in gross state revenues over 20 years, before considering incentives and other state costs for educating children of new employees. The jobs it creates must pay at least $150,000 a year on average and no more than 10 percent can rely on federal government funding.

“It’s a big diversification opportunity,” he told SCHEV.

mmartz@timesdispatch.com

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