Critics: McDonnell budget cuts cancel out possible job gains

RICHMOND

It's been one of the most frequently uttered sentences on the floor of the House of Delegates this year:

"This is a jobs bill, Mr. Speaker."

Delegate after delegate has promoted measures - many of them introduced at the request of Republican Gov. Bob McDonnell - by promising they will create jobs and help Virginia's recession-wracked economy rebound from the doldrums.

Such pronouncements are invariably greeted with cheers and applause from the House's Republican majority.

There has been less discussion, however, about the potential job losses that could result from the multibillion-dollar cuts being applied to the state budget at the same time.

By at least one estimate, those cuts could cost almost as many jobs as the governor and the House majority hope to create.

McDonnell introduced a package of economic stimulus measures last month that he said would lead to the creation of more than 29,000 new jobs over the next two years.

Last week, the Virginia Education Association estimated that McDonnell's proposed $731 million in cuts to public education could lead to more than 28,000 school job losses. T hat number doesn't include any jobs that may be lost from the governor's recommended $316 million in cuts to health and human resources programs.

McDonnell's office did not respond to repeated requests for comment this week.

Economic stimulus is important in a recession, but it requires lawmakers to make tough choices, said Sen. Mary Margaret Whipple, D-Arlington County, a member of the budget-writing Finance Committee: "How much do you put into job creation versus cutting jobs? When we cut money from the state budget, we cut teacher jobs. We cut health care jobs. It's a dilemma."

In any event, projecting potential job gains or losses is, at best, an inexact science.

McDonnell's job-gain estimate was generated by an economic forecasting model at the Virginia Economic Development Partnership, according to Christie Miller, a spokeswoman for that agency. The forecasters used data from the partnership and from the Department of Business Assistance and the Virginia Tourism Corp.

Miller cautioned that the estimate is already outdated, because McDonnell's stimulus package seems unlikely to be fully funded by the Assembly. Of the $50 million in budget measures requested by the governor, budget writers in the House have approved $48 million but those in the Democrat-controlled Senate have funded only $11 million.

The biggest points of contention are McDonnell's requests for $12.1 million to double the Governor's Opportunity Fund, $7.2 million to increase the Virginia Tourism Corp. budget by half, and $6.5 million for a near-doubling of the Virginia Jobs Investment Program. All were rejected by Senate budget writers.

Talking up McDonnell's initiative on the House floor this week, Del. Steven Landes, R-Augusta County, said the measures would "allow the governor and our agencies the tools they need to continue to expand job opportunities and grow our economy and put more Virginians back to work."

Del. Robert Brink, D-Arlington County, applauded McDonnell for undertaking a stimulus program but cautioned that not every job-creation scheme fulfills its promise. He cited a recent study by the nonprofit Tax Foundation that criticized state tax incentives for motion picture producers - one of McDonnell's proposals - as ineffective "Hollywood handouts."

James Koch, an economist and former president of Old Dominion University, said McDonnell's proposals will probably spur some new jobs, but it's impossible to tell how many because there are too many variables.

For one thing, he said, the state is "captive to the national economy." McDonnell's initiatives "could be completely washed out by national or international developments," he said.

For instance, Koch said, if the Navy follows through on its plan to transfer an aircraft carrier from Norfolk to Mayport Naval Station in Florida, "that would dwarf anything the governor can do."

Koch also said that while McDonnell touts the jobs he hopes to create, he should level with Virginians about the lost jobs that could result from his budget cuts. "A realistic accounting probably should take both the pluses and the minuses into account," he said.

As for estimating those job losses, that's just as problematic as projecting job gains.

Localities are ultimately responsible for funding public education in Virginia. Robley Jones, director of government relations for the Virginia Education Association, said the teacher group's estimate of 28,000-plus potential job losses was based on the loss of the state share of teacher salaries - an average of $33,000 per teacher.

"Many localities will be unable to make up the difference because of the fiscal stress they're under," he said.

Jones added that the estimate is a worst-case scenario because both the House and Senate spending plans have mitigated McDonnell's proposed education cuts to some degree. If the House plan prevails, the education association projects more than 22,000 jobs lost; if the Senate plan prevails, more than 14,000.

Bill Sizemore, (804) 697-1560, bill.sizemore@pilotonline.com