Bolling's role: point man for McDonnell jobs plan

It takes money to make money.

That's the position of Gov. Bob McDonnell's administration, which, despite a $4 billion budget hole, has put forth a plan for $50 million in new spending, meant to help cut the state's creeping unemployment rate and boost state coffers.

McDonnell's point man on pushing that package through the legislature is Lt. Gov. Bill Bolling, who will serve as the state's chief job-creation officer. He is to be on the front lines of the state's effort to create jobs and economic opportunity.

Bolling's new role comes as the state's unemployment numbers have ticked up. And the recession has hit the Richmond region unusually hard.

The metro area traditionally has been fairly immune to slumps because there were so many steady government, finance and tobacco jobs. Economic diversification in recent years makes the area look more like the rest of the country and less like the rest of Virginia, where the federal government buoys Northern Virginia and the military powers the Hampton Roads economy.

The Richmond metropolitan area, which stretches from Caroline County in the north to Sussex County in the south, and from King and Queen County in the east to Cumberland County in the west, lost 13,000 jobs last year, a 2 percent contraction.

The biggest drops came in construction, down 5,200, as residential and commercial projects dried up during the slump. Factories shed 3,300 jobs. The financial sector, the focus of much of the area's diversification in recent years, dropped 2,900 jobs.

Despite state budget cuts, state government employment rose, by 2,300 over the period. Hard-hit local governments, though, have cut 800 jobs.

The biggest growth was in health care and education, up by 6,700 jobs.

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Bolling's new assignment significantly elevates the former Hanover County state senator's traditional role as a part-time official, second in command to the governor.

Bolling will oversee four general efforts as the state's chief job-creation officer.

He's trying to navigate the legislative package through the General Assembly, and chairing a work group within the administration on economic development.

He is co-chairman, with McDonnell's senior economic adviser, Robert C. Sledd, of a commission on job creation and economic development that will include members from the private sector. He also will help the governor aggressively recruit new business to move to Virginia.

"If you're a business interested in Virginia and you're talking to the lieutenant governor, that's something different than talking to the executive director of an economic development department," Bolling said.

McDonnell said he does not think Bolling's role added a new layer of bureaucracy.

"It's an extension of the governor's office," he said. "I'm going to be on the phone trying. . . . When I can't, he will."

McDonnell said 22 states assign economic-development responsibilities to their lieutenant governors.

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Christine Chmura, president and chief economist of Chmura Economics and Analytics, said focusing on economic-development programs makes sense now.

"Firms are just beginning to think about expanding jobs," she said. "With more bullets in the Governor's Opportunity Fund, Virginia stands a better chance of competing with some other states for large firms that are considering expanding or relocating."

McDonnell wants to increase the amount in the fund, used to attract businesses to Virginia, by $12.1 million in fiscal 2011. It's one component in his 20-bill legislative package, which also seeks to increase the appropriation for the Virginia Jobs Investment Program by $6.5 million in fiscal 2011 and increase funding for the Virginia Tourism Corporation by $3.6 million a year for the next two years.

At this point in the recovery, economic-development initiatives have more potential to boost jobs than big spending on transportation or other capital projects, Chmura said. Once the economy starts to accelerate, there will be more money for the transportation and education projects the state needs, she said.

She also likes the emphasis on small business and technology, because both sectors have great potential to generate jobs.

"Even though the millions proposed by the governor is a drop in the bucket compared to Virginia's $397 billion gross state product, his strategies are sound from an economic perspective and have the potential to boost job growth at a time when the state really needs it," she said.

Tony Carilli, an economics professor at Hampden-Sydney College, said the key is to create a more favorable environment for businesses and people by lowering state taxes and fees. He noted that state and local government spending in Virginia has nearly doubled since 2000.

"When the economy was going well, the state spent like drunken sailors on leave who find that once leave is over they don't have any money to send home to the family," he said.