State Policies Must Include Incentives for Private Sector

"Now is the winter of our discontent." The opening line from Shakespeare's Richard III aptly describes the mood on Virginia's Capitol Hill, where, entering its third week of convocation, the General Assembly faces balancing a multibillion-dollar budget shortfall. Additionally, echoes of the Bard might well illustrate the citizenry's general sense of malaise and fear that the economy, housing, stock markets, and retirement plans won't soon recover, and more jobs will be lost.

While these concerns are very real, we must recover our own optimism first that in the near future there will be a better day for our nation and state. If we are troubled on every side, we must not be distressed; if we are perplexed, we must not despair. The real solutions to our economic condition exist with the people and the free market.

Government, while well-intentioned, cannot solve our economic problems. Government should instead partner with the private sector on a course beyond economic recovery to economic prosperity. This installment of my Assembly correspondence will focus on how members of my Republican caucus are working to address three areas of common anxiety: jobs, the economy, and housing.

On jobs and the economy: Millions, if not billions, of taxpayer dollars may soon flood state coffers from President Obama's proposed federal stimulus package. He and his congressional allies in Washington claim that that the new spending plan will create new jobs -- even new industries, e.g., "green jobs." Unfortunately for this economy, these jobs will take considerable time to materialize, and Virginians need jobs now.

In Richmond this year, delegates and senators are charged with the task of bringing a nearly $4 billion shortfall into line. Taking a contrary approach to the federal government, your state representatives are tightening belts with spending reductions and implementing long-term -- rather than one-time -- structural reforms of the state bureaucracy. At the state and local levels, government is constrained from such mega-spending initiatives -- and, frankly, thank God.

The state government cannot print money or run deficits, and must have a balanced budget. State government must work to find creative approaches to economic recovery and development.

With the following legislation pending before the Assembly, new jobs could be created within the next 12 months:

Del. G. Manoli Loupassi (R-Richmond) is leading on an issue of significant economic development for the metro Richmond area. His House Bill 1803 proposes to dedicate certain sales tax revenue -- generated by transactions occurring on the premises of a stadium or adjacent structures -- to be used to repay any bonds issued to finance the construction of such a public facility. The bill is site-neutral and calls for a narrow window for action. The bonds must be issued on or after July 1, 2009, but before July 1, 2012. As a co-patron and representative of Hanover, Henrico, and New Kent, I believe this bill will add vitality to the city whose success is critical to the region.

Loupassi's measure may also lead to greater regional cooperation. On that point, Del. Samuel A. Nixon Jr. (R-Chesterfield) is offering legislation, House Bill 1882, to revise the composition of the board of directors of the Richmond Metropolitan Authority (RMA) to include Hanover County.

Several other job-creation measures of interest include House Bills 2575, 2550, 2583, and 2437. The most accessible resource for finding legislation status -- where bills are in the process, who has voted for or against them -- is the General Assembly Web site's Legislative Information Services (LIS) at http://leg1.state.va.us/. Here, you can search for any and all the legislation in the 2009 session by the bill number, patron, committee, daily calendar, and keyword. I encourage readers to use this tool to find the current status of bills.

Housing is Ground Zero of the economy. Public and private sectors are struggling to arrest the slide in housing values -- without a silver bullet. But just because there is no single, obvious answer to the housing crisis, the lack of demand, and the surplus of inventory of homes, legislators do not have an excuse to not try.

Tomorrow, the House Finance committee will hear my proposal to cut taxes on those trying to buy a house for the first time. House Bill 2661 would eliminate the state's share of the recordation tax applied to a property's first $250,000 of value on transactions between July 1, 2009, and Sept. 30, 2009. This recordation tax holiday would provide approximately $500 of savings per closing during this summertime sale. It seeks to remove an obstacle to young families and young professionals hoping to buy their first home. After the difficulty of finding financing and getting to the closing table, these consumers often arrive only to find they need more money -- sometimes a thousand or two dollars sent directly to the government.

This is the time to act to spur more home sales. November 2008 recordation tax collections were the lowest since 9/11/01. Currently, recordation tax collection is at its lowest point in a decade. It would be even lower had the state not increased the tax by 40 percent in 2004. We must help housing now.

Christopher Peace is a Republican who represents Virginia's 97th House of Delegates District, which includes parts of Caroline, Hanover, Henrico, King and Queen, King William, New Kent, and Spotsylvania counties. He may be contacted at DelCPeace@house.virginia.gov or (804) 698-1097.