It’s Tuesday, but we’re still running the Monday Q&A.
R. Creigh Deeds, an attorney from Bath County, was elected to the Virginia House of Delegates in 1992 and has been in the state Senate since 2001. BizSense spoke with Deeds the same week he announced his plan for small businesses at a news conference held at the Virginia Shop in Charlottesville.
In his plan, he calls for a tax break for every job created, a rural business fund, less red tape, more government transparency and a doubling of the Governor’s Opportunity Fund.
BizSense asked Deeds about these proposals and other business policy issues facing the state of Virginia.
Below is an edited transcript.
Richmond BizSense: Our readers are primarily business professionals in the Richmond area. Why should they vote for you?
Creigh Deeds: I think most of them understand there has been some value with Warner and Kaine as governor. They have taken a reach-across-the-aisle approach to solving problems, and I will lead in that mold.
You look at my legislative career, and I’ve been focused on creating economic and educational opportunities and protecting natural resources. The first job as governor will be to restore confidence in the economy, which is not only about investing in infrastructure and education, but also about incentivizing job growth.
RBS: The state unemployment rate is getting worse. How do you plan to turn that around?
CD: I have a plan that makes sense and is focused. It says you ought not have to create 51 jobs to get a tax break. If you create one job, we are going to give you a tax credit. When you create a job, you create a tax-paying citizen, so it will pay for itself. Basically the credit is to offset the increase in the federal payroll tax.
RBS: What other breaks do you propose for small businesses?
CD: I propose to create a tax credit that mirrors the federal savings on net operating losses from two to five years as a lifeline to struggling businesses. I also want to increase the tax credit for investment for capital improvements.
I also have a detailed plan to incentivize growth in the green industry. I think the next economy will be built on green energy, and Virginia is poised to be a leader in that field.
RBS: The next governor will inherit a $1.5 billion budget deficit. How would you approach that issue in the first few months of office?
CD: In the short term, we are going to make tough decisions about how we create efficiencies without severely damaging state service. The reality is, when you have cuts like you know Kaine has endured, every aspect of state service is going to be impacted — there is no other way around it unless you find a way to increase size of budget, and that is not going to happen in a recession. It is terrible to think about raising taxes in a recession.
It is a matter of performing surgery where necessary. Across-the-board cuts don’t make sense. We got to be focused on how we can create economic recovery in the short term and create jobs that allow for economic growth to set us up for the future. I want to focus on transportation for the first year: I think in the short haul we can create a lot of jobs, in the long haul it will create a lot of economic development and source of revenue.
RBS: What do you think are the most important issues facing small businesses today, and how would you address them as governor?
CD: With some small businesses, it’s regulation. For example, a couple months ago at a Mother’s Day community lunch in Bath County, I met a guy who has a small excavation business with a handful of employees. He asked me, “How come I have to go through the same regulations twice for a road project?” I asked him what he meant and he said he had to go through the same environmental review from VDOT and DCR. Where there are instances of duplication of regulation, that’s a problem costing money and time.
With other businesses, it’s finding qualified workers. I met a guy in Harrisonburg who has a small computer technology business with six employees. A guy like that has to be constantly prepared in case he loses an employee to find someone qualified to fill the role. We need to focus on investment in education to make sure we have the smartest workforce in the world.
I know small-business people who want to provide insurance but can’t afford it. In that aspect, we have to create incentives. The way to provide that is through a no-frills, low-cost insurance product. I propose we pool insurance products for small businesses. We’ve got to find ways to give people the tools they need to retain the workforce.
RBS: How do you plan to make Virginia government run more effectively?
CD: Lots of people say that government ought to be run like a business, but government is not a business, and it’s not out for profit. What most people mean is that the government should govern with more sound business principles.
I propose once-a-decade performance audits for every agency. In other states, it’s a process that has produced savings. I propose a zero-based budget. When tax revenue streams grow, when you have as surplus, agencies look at last year’s budget and the argument ensues over how much of an increase you get. What I propose is to start at zero every year. Honestly, I think in this economy when families and business are cutting back, government ought to operate the same way.
RBS: If Congress approves a card check bill, how would it affect Virginia? Would it impair Virginia’s status as a right-to-work state?
CD: We are one of 22 right-to-work states. I strongly support the right-to-work law, and it has given us a competitive advantage. I also support the right to organize as supported by First Amendment to ensure fairness in the workplace. That legislation will not come across my desk for a signature or veto. It is not a state issue. It is a distraction for us. However, I am concerned about anything that will put us in a competitive disadvantage. I believe anything that passes in Congress will include the secret ballot, which insures the integrity of the electoral process and ought to be retained.
RBS: One recent issue that has come up is the Northrop Grumman contract. How would you handle that as governor, and how does it change the way future contracts with the state should be executed?
CD: I can tell you public-private partnerships make sense in lots of cases. This deal wasn’t bad in the outset as far as I can tell. But this deal went haywire in implementation. I am waiting for the Senate Finance and JLARC’s review before I make specific recommendations, but I can tell you [that in] these performance reviews I will create, VITA will be the first agency to be audited. We’ve got to figure this out. How can we create or restore trust in government when they read that a state agency paid more than $8,000 for laptops?
The attorney general’s office signed off on VITA every year, maybe those guys have the answers; they ought to know what happened.
RBS: You propose expanding the contracting program for small minority- and woman-owned business. Tell me why.
CD: What I know is that 75 to 85 percent of job growth comes from small business, and a lot of action these days seems to be in minority-owned small business. We ought to do what we can to encourage growth there and help those businesses like any other business succeed. The reality is state contracting is a big source of business for a lot of people. The government has set a 40 percent goal for state SWaM contracts. I will exceed that goal because I think it is good policy to promote small businesses growth in our economy.
RBS: What role does offshore drilling play in Virginia’s future, and how would you approach that issue as governor?
CD: Energy independence is a mater of national and economic security. I don’t think you can take anything off the table, conventional or alternative, until science takes it off. A recent survey suggests there isn’t really any oil off the coast, but there is natural gas. I voted in the state legislature to allow the governor, once the federal government lifted the leases, to enter into agreements to allow for drilling.
I think if we can protect the environment, and the economy of fisheries, naval operations, and tourism, and get revenue sharing from the leases, we ought to enter into it. The holdup now is federal law doesn’t allow revenue sharing, and the state would not benefit from those leases if they entered into them today. I’m all for producing more gas and other sources of energy in this country, but we have to be smart about it. Right now the federal government is considering legislation to allow coastal states to share revenue, and I am anxious to see how it plays out.
Al Harris covers the business of politics for BizSense. Please send news tips to Al@richmondbizsense.com.