Virginia Business - News: Leaving a legacy

Leaving a legacy

McDonnell to focus on transportation, K-12 education in final legislative session
December 29, 2012 4:07 PM
by Jessica Sabbath

News

Bob’s still for jobs. As Gov. Bob McDonnell enters the final year of his gubernatorial term, he continues to push for legislation that will improve the commonwealth’s business climate. This year, two of his key initiatives will be reforming K-12 education and increasing revenue for transportation. He points out that, while Virginia’s unemployment rate has dropped from 7.3 percent when he took office in 2010 to 5.7 percent in October, there’s still room to improve. “It’s still unacceptable,” he told Virginia Business during an interview in mid-December. “We’ve got 200,000-plus Virginians who don’t have jobs who want to have jobs.”

Plans for his final year include regulatory reform and improvements in transportation infrastructure, work-force development and education. “We’re going to retool our work-force development programs about how to make them work better to get people the skills they need,” says McDonnell. “But a big part of job creation, honestly, is education.”

While higher-education reform has been a focus in past sessions, McDonnell says he’ll emphasize on better choice, accountability and teacher professionalism in K-12 education. “I have one simple premise, and that is every young person, regardless of their background, regardless of their ZIP code, ought to have access to a world-class education,” says McDonnell. “And therefore, if we graduate somebody from high school that isn’t career ready or college ready, then we’ve failed.”

Transportation revenue, an ongoing headache for Virginia, will get another major push. McDonnell wants an additional $500 million each year in transportation to go toward road maintenance. “We’ve got to be honest: we have a math problem,” says McDonnell. “I’m going to be insistent that we do something this session to fix it.”

Virginia Business sat down with McDonnell in his Richmond offices. A video and full transcript of the discussion can be found on VirginiaBusiness.com.

Virginia Business: Can you tell me a little bit about your plans to bring in new revenue for transportation?

McDonnell: I’ve proposed a number of things the last couple of years. We’ve invested the largest amount in transportation in a generation because of the bond package that passed in 2011, which was about $3.5 billion of new bonds, and a $400 million infrastructure bank. We’ve got a lot of resources, but these are short-term. They’re things that we’re doing to take advantage of low interest rates and competitive contracting.

But long-term we have a terrible problem with our maintenance deficit. We drain about $400 million a year out of construction just to maintain the current roads. That’s the law. You have to maintain what you have before you can build anything new. And it’s going to get worse because of declines in the gas tax not adjusted for inflation … We’ve got to be honest: we have a math problem, and I would like to do something this session. In fact, I’m going to be insistent that we do something this session to try to fix this. So we’re going to have a package this year that has a variety of components to it that will generate some real new revenue for transportation infrastructure.

VB: What kind of business-related legislation will be the focus this session?

McDonnell: We’re going to retool our work-force development programs, about how to make them work better to get people the skills they need, but a big part of job creation honestly is education. The last two years have put dramatic new revenues into colleges — $350 million of new money into colleges focusing on STEM disciplines. We’ve got the money, we’ve got the reforms. This year we’ll have significant reforms in the K-12 education system to provide better choice.
I have one simple premise, and that is every young person, regardless of their background, regardless of their ZIP code, ought to have access to a world-class education, and therefore, if we graduate somebody from high school this isn’t career ready or college ready, then we’ve failed.

VB: Why do you oppose doing our own state health benefits exchange [as part of the Patient Protection and Affordable Care Act]?

McDonnell: Because it doesn’t make any economic sense right now. And because we have not been provided the information from the federal government that gives us all the information that we need to make a decision … And so what I cannot do is set Virginia up to operate an exchange that really doesn’t have a lot of flexibility, that sticks us with a price tag and that creates burdens in the future for our state. They’ve given us until October 2014 to be able to request some money to be able to build a state-based exchange. So, the way I look at it, if they don’t build it very well, or they can clarify these answers in the future, we always have the option of going back to a state-based or partnership exchange. And we have bigger problems with [the question on whether to expand] Medicaid … The system does not work very well as it is. And I don’t have any confidence that the federal government’s going to be able to keep its commitment to fund 100 percent of the cost for the first three years and then 90 percent after that … Medicaid has grown 1,600 percent in 30 years in Virginia, and that’s pretty much the norm. It’s busting every governor’s budget in the country. It’s 21 percent of our budget. In some states it’s up to 26, 27, 28 percent. That’s before Obamacare, afterwards, who knows?

VB: If you had one issue that you could pin your legacy on it [what would it be], and are there any areas that you wish you could do more?

McDonnell: Governors always want to do more. When you’ve got one term, you’re always in a hurry, you want to get things done, and I think we’ve gotten a number of big things and big reforms done. To me, it’s all about jobs and economic development and opportunity for our people. That is what’s driven me in government. I ran on a “Bob’s for Jobs” platform. I think we’ve had some decent success. Going from 7.3 to 5.7 percent unemployment is positive … It’s not just about creating jobs, it’s all the things that go into that. Significant K-12 and higher education reforms. It’s the improvements to transportation infrastructure that allow you to create jobs. It’s changing the tax and regulatory burdens so it makes it easier for businesses to start up. It’s reducing unfunded pension liabilities like we did last year. It’s balancing a budget three years in a row without raising taxes.
In a tough economy, we’ve managed prudently and been conservative in our estimates. And so all those things together have created a state that’s ranked as one of the top one or two business- friendly states in the country, that’s ranked as one the top-managed states in the country, and that’s why people want to come here to do business ... That is making the state more competitive and focused on the pocketbook issues that create more opportunity to achieve the American dream, and that’s what we’ve been trying to do the last three years.

VB: You are asking for comments on regulations. What do you think of Virginia’s regulatory climate?

McDonnell: It’s one of the top things that you hear businesses complain about, and the reasons they tell you they can’t start or why they can’t expand. It’s because government is just in the way. It’s too big. It’s too burdensome. It’s too expensive. I want to get rid of the stuff that doesn’t make any sense. There are regulations that have been around 20, 30, 40, 50 years. We’ve gone back and said, “Hey, does it still make sense in the year 2013?” Does it still make sense to have this regulation? And I think that’s a really worthwhile endeavor. So we asked businesses around the state to give us their input. Tell us the dumb regulations that you see.

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