Bill's Blog

With the country struggling to get out of the worst recession in 60 years, our nation's political leaders are debating whether or not they should allow a series of federal tax cuts enacted in 2001 to expire. These tax cuts should not only be extended, we should make them permanent.

History has proven two important facts: tax cuts help stimulate consumer spending, business investment, economic growth, and job creation -- while tax increases impede economic growth and kill jobs.

In 2001 and 2003, Congress approved a series of tax cuts that are currently saving American taxpayers $135 billion a year. However, these tax cuts are set to expire in 2011.

Most Democrats in Washington, including President Obama, want to let these tax cuts expire. They argue that they represent "tax cuts for the rich," and they feel that these tax dollars are needed to help reduce the federal budget deficit, which will exceed $1.47 trillion this year.

While reducing the federal budget deficit is important, it should be done by reining in Washington's out-of-control spending, not by raising taxes on families and businesses.

The federal tax cuts benefit a wide range of citizens, including married couples with children, investors, and small businesses.

These tax cuts include reductions in individual income tax rates, tax relief for married couples, an increase in the child tax credit, a reduction in capital gains taxes, and important depreciation write-offs for certain business investments.

If we allow these tax cuts to expire, the result will be a federal tax increase of $135 billion on consumers and small businesses. This would be a devastating blow to an economy that is struggling to recover.

According to the nonpartisan Tax Foundation, if Congress fails to extend these tax cuts American families will see their total federal tax burden increase by $1,541 next year. Many families who are struggling to make ends meet cannot afford to pay higher taxes.

Apart from the impact tax increases would have on families and businesses, their impact on the economy as a whole cannot be overstated.

According to Mark Zandi, chief economist for Moody's Analytics, failing to extend these tax cuts would have an adverse impact on the American economy. In a recent interview, Zandi said, "If they fail to act that would be a serious mistake and significantly raise the odds that the economy would unravel back into a recession."

With the economy in very a fragile condition we should be doing everything we can to increase the disposable income of families and businesses. We do that by cutting taxes and controlling spending, not by raising taxes.

In my role as Virginia's chief jobs creation officer, I have met with more CEOs than anyone in Virginia government over the past seven months. These CEOs know what it takes to create jobs and get our economy moving again. If there is one thing they all agree on, it is the need to reduce taxes to encourage spending and investment.

If our political leaders in Washington are serious about revitalizing our nation's economy, they should make these tax cuts permanent, or at the very least extend them for an additional five years -- and end their out-of-control spending. This will send the correct message to business leaders and investors.

Making hard decisions like these is not easy, but we have shown in Virginia how it can be done. Earlier this year we eliminated a $4.2 billion budget deficit by reducing spending, and we have taken aggressive steps to create jobs in our state. As a result, we ended the 2010 fiscal year with a $220 million surplus.

The formula for encouraging economic growth is simple -- cut taxes, reduce unnecessary regulations, invest in proven economic development programs, reduce spending, adopt a long-term plan for eliminating the federal budget deficit, and empower the private sector to unleash the entrepreneurial spirit of America.

If our leaders take the alternate course of higher taxes and more regulation, uncontrolled spending and debt, and an overreliance on government at the expense of the private sector, they will insure that our economic malaise continues and the nation slips into a double dip recession.

On Saturday, Lieutenant Governor Bolling participated in the grand opening ceremony for Luray Valley Museum which is located at Luray Caverns in Luray, VA. The Museum houses artifacts from early life in the Shenandoah Valley, a collection that was 40 years in the making. The Lieutenant Governor was joined by Delegate Todd Gilbert and members of the Graves Family, owners of Luray Caverns. Be sure to check out the Museum and Caverns, if you are in the area!

Check out the video from WHSV 3 at this link:

http://ww2.whsv.com/global/video/flash/popupplayer.asp?ClipID1=5028458&h1=Luray%20Museum%20Grand%20Opening&vt1=v&at1=News&d1=52881&LaunchPageAdTag=News&fvCatNo=&backgroundImageURL=&activePane=info&rnd=81475877

On Tuesday, August 10th, Lieutenant Governor Bolling spoke at a ribbon cutting ceremony for Faneuil, Inc. in Martinsville, VA. Check out the video from WSET: http://www.wset.com/global/category.asp?c=189690&autoStart=true&topVideoCatNo=default&clipId=5017259&flvUri=&partnerclipid=

Last week, I attended the annual meeting of the National Lieutenant Governor's Association in Biloxi, Mississippi.  The theme of our meeting was Recovery and Renewal, and we focused on how the Gulf Coast has responded to and recovered from Hurricane Katrina in 2005 and the recent Deep Water Horizon oil leak.

In this column I will talk about the Deep Water Horizon oil leak.  I will talk about the lingering impacts of Hurricane Katrina in a later column.

As far as the Deep Water Horizon oil leak is concerned, the best assessment of this situation came from Mississippi Governor Hailey Barbour, who talked with us about the physical and fiscal impacts of the leak.

From the physical perspective, I saw very little evidence of the leak.  The vast majority of the oil that came from the Deep Water Horizon well was dispersed, captured or burned off shore.  While some oil did come ashore in the form of "tar balls" or "sludge", the impacts appear to have been minimal and were not widespread.

I should note that the impacts were greater in Louisiana, where some marsh lands were impacted, and this is the greater concern about the oils long term impact.  However, officials we spoke with in both Mississippi and Louisiana confirmed that the physical impacts of the oil leak had been overstated by the national media.

From watching the nightly news you get the impression that the entire Gulf Coast has been covered in oil.  That is certainly not the case.  We drove along the entire Mississippi Gulf Coast from Biloxi to Bay St. Louis and we saw no evidence of oil.  The beaches were open and the water was clear. 

While many BP cleanup workers were present, they were generally huddled together under tents trying to stay cool with no real work to be done.

However, from a fiscal standpoint the oil leak has had a devastating impact on the Gulf Coast. 

Commercial fisheries in Louisiana and Mississippi were closed for a lengthy period of time (although they are now reopened); and tourism is off by about 40%, which is making it difficult for many hotels, restaurants, and other tourist locations to keep their doors open.

It appears as though a lot of this fiscal impact, especially that relating to tourism, has come about because the national media did not do a balanced job reporting the impacts of the oil leak on the Gulf Coast.   Unfortunately, I don't think that will surprise many people.

At present, the major concern over the fiscal impact of the oil leak has nothing to do with the leak itself.   It has to do with the misguided decision of the Obama administration to impose a moratorium on the development of additional oil wells in the Gulf of Mexico. 

During our meeting we heard from the Lieutenant Governor Scott Angelle (D-Louisiana), who made an impassioned plea for the administration to lift this moratorium because of the fiscal impact it is having on the Gulf Coast. 

Not only are people suffering from the loss of jobs associated with the moratorium, but many major oil drilling rigs are being located to other countries and they may never return.  This may make it difficult for the Gulf Coast to resume new oil well production for a very long time.

I came away from this trip with two distinct impressions. 

First, BP is certainly at fault for the spill and they should be held accountable for the cleanup and reimbursement of all valid losses that families and businesses have sustained.

Second, the national media, through misleading media coverage; and the Obama administration, through misguided policies, have contributed greatly to the fiscal impacts of this disaster on the Gulf Coast.

This begs the question - what can we do to help the Gulf Coast recover from this event.  I have two recommendations.

First, if you are considering a vacation this summer or fall consider a trip to the Gulf Coast.  They have some wonderful beaches, resorts and other entertainment venues and I know they would be glad to have your business. 

Second, let's join together to encourage the Obama administration to lift the misguided moratorium they have imposed on additional off shore drilling.  We need to get the oil industry back to work before it is too late.

In my next column I'll talk about the lingering impacts of Hurricane Katrina on the Gulf Coast.

When Governor McDonnell and I took office in January, we set two key goals for our first year in office: 

• Getting Virginia's economy moving again and creating jobs for Virginia's families, and
• Eliminating the $4.2B budget shortfall we inherited and turning our budget shortfalls into surpluses again.

This week we delivered on both of those promises.

Turning Shortfalls Into Surpluses

On Wednesday, Governor McDonnell announced that Virginia ended the 2010 fiscal year with a $220M budget surplus.  That is an amazing accomplishment given the fact that six months ago we were facing a $1.8B budget shortfall in the 2010 fiscal year. 

There are three factors that helped us accomplish this positive result. 

• Earlier this year we made the difficult decisions that were necessary to reduce spending and bring our budget into balance without raising taxes.

• We used incentives to encourage state agencies to save money, rather than spend their entire budget in the final months of the fiscal year, and

• We are beginning to see the positive effects of economic growth in Virginia.

As a result of this surplus, we will be able to invest in some important government programs. 

For example, $18M will be directed to Virginia's public schools; approximately $20M will be dedicated to the Transportation Trust Fund; $22M will go to the water Quality Improvement Fund; and $82M will be used to provide a 3% bonus for state employees, who have not received a pay raise in three years.

We will appropriate the remaining surpluses later this year in accordance with statutory requirements and final financial calculations.

Creating Jobs For Virginia's Families

On Thursday, Governor McDonnell and I gave an update on our efforts to get Virginia's economy moving again and create jobs for Virginia's families.  Fortunately, it was more good news.

Since February 2010, Virginia has added 71,500 net new jobs.  This is the third highest jobs creation rate in the nation.

During the first six months of the administration, Virginia has closed 110 economic development deals, which will eventually create over 7,100 new jobs and more than $1B in capital investment.

Interestingly, 80% of these new jobs have been created in the private sector, as opposed to the public sector; and the new jobs announcements have been evenly distributed across our state, with significant economic development occurring in rural parts of Virginia, where it is really needed.

These positive results show that we are on the right track.  We are working hard and we are making smart decisions that will better position Virginia to take advantage of a future economic resurgence.

Despite these positive results, we still have a lot of work to do to lead Virginia to a period of greater economic prosperity.    

We will not stop until we return our unemployment rates to historic levels and every Virginian has the opportunity to access to a good paying job.

Likewise, we will keep our focus on controlling government spending and making certain that our budgets are balanced.

These results show what conservative leadership can do and how government can work for the people when it adheres to sound principles.  Wouldn't it be great if we could get our friends in Washington to take a page from the Virginia playbook?

Check out NBC 12's coverage of Lieutenant Governor Bolling unveiling the 70 mph speed limit on Interstate 295: http://www.nbc12.com/Global/story.asp?S=12743745.

This week I had the privilege of announcing an $800,000 grant to construct a new Wind Energy Training Center at James Madison University.  This is the latest in a series of steps that Governor McDonnell and I have taken to make Virginia the East Coast’s energy leader.

Governor McDonnell and I understand that doing more to develop domestic sources of energy will help our nation achieve a greater degree of energy security.  We also understand that expanding energy production can help Virginia achieve a greater degree of economic security.

As we have said many times, more energy = more jobs for Virginia!

Our statewide energy policy is based on an “all of the above” approach.  

We want to do more to develop traditional sources of energy in Virginia.  That means more nuclear, more coal and more natural gas production.  It also means developing our offshore energy resources at the earliest possible opportunity.

Likewise, we support efforts to do more to develop renewable sources of energy in Virginia.  That’s why we have take steps to expand wind energy, solar energy and bio mass energy production in our state.

Finally, we support responsible energy conservation, as long as these policies are balanced and do not adversely impact our efforts to create jobs in Virginia.

This week our focus was on wind energy.  

Virginia has great potential to produce energy from onshore wind by constructing wind farms along the mountain ranges of the Alleghany and Appalachian mountains.  

We are also uniquely positioned to take advantage of offshore wind production.  The shallow waters off the coast of Virginia could make our state one of the best locations along the East Coast for offshore wind energy development.

It is important to remember that energy production is just one of the ways the Commonwealth can benefit from expanding our wind energy resources.  We also have the potential of attracting new companies to Virginia that manufacture the infrastructure necessary to support the wind industry.  These companies could create a lot of new jobs for the people of Virginia.

The $800,000 grant we provided to James Madison University will enable us to construct a state of the art wind training facility in Harrisonburg.  This facility will help explore new ways to maximize wind energy production in Virginia, and provide workers with the skills they need to service wind energy businesses that locate in our state.

There is more that we can do to promote wind energy in Virginia and we will be looking for ways to do this in the months to come.  The wind industry will expand greatly in the next decade, and we must act now to put Virginia at the forefront of that growth.

By continuing to invest in our wind energy infrastructure, by streamlining the regulatory approval process for wind energy projects, and by providing more incentives to attract wind energy companies to Virginia, we can take advantage of this growing and important part of the energy sector.