The state has given industries $165 million in incentive grants over the past five years to try to entice them to locate in Virginia.

Secretary of Commerce and Trade Patrick O. Gottschalk told the House Appropriations Committee yesterday that the grants have been worth it.

They have generated $696 million in tax revenues during that period and are projected to generate $1.4 billion by fiscal 2011, he said.

Thus for every dollar spent on luring industry, $8 in revenue is realized, Gottschalk said.

The committee had concerns about SRI International, a nonprofit research firm that is locating in Harrisonburg. The proposed budget seeks $5 million in 2009 and $2 million in 2010 in incentive grants.

Legislators wondered whether the incentives, some of which are designed to lure scientists to the project, would guarantee that the scientists stay at SRI and not be lured to another research project. Gottschalk said they would.

Figures presented by Gottschalk show that the largest incentive, $12 million, lured IKEA to hard-pressed Danville. A total of 740 new jobs are expected to be created.

In addition to the SRI incentive, the proposed budget for 2008-2010 includes $10.7 million for the Rolls-Royce aircraft-engine plant that is being built in Prince George County.

Other incentives include $35 million, if the plant meets certain performance goals by 2023, $8.8 million in training grants and $5 million in performance grants if Rolls-Royce brings suppliers who create at least 300 jobs and invest $50 million in Virginia.
Contact Tyler Whitley at (804) 649-6780 or twhitley@timesdispatch.com.