When the Reagan administration's budget and tax cuts take effect next month, the states' chief executives will have to decide how to keep their economies up with revenues down.
In Virginia, there won't be a seasoned governor to take the lead because a new leader will be elected in November. Both candidates, however -- Democratic Lt. Gov. Charles S. Robb and Republican Attorney General J. Marshall Coleman -- say they are attempting to develop positions on how to prevent ill effects on the state's economy.
But both candidates and state officials said they don't yet know how much the state will lose because of budget and tax cuts, particularly if the president proposes and Congress approves more program reductions.
"It's unrealistic to see the state make up for losses in federal revenues," Robb said in an interview. The candidate said his choices are to continue administering the same programs on between 65 percent and 75 percent of their previous funds or to reorder priorities. Robb said he would choose the latter option if elected, but because much of the federal money received by the state is earmarked for particular block grants, he said he would have little flexibility.
Coleman said the state cannot fill the financial void left by the federal reductions, but "expectations about budget cuts are overdrawn."
Coleman said he would try to use the services of volunteer organizations, such as retired business executives who counsel small business owners, to make up for some services lost in federal budget cuts.
The two candidates don't differ very much on many other business issues. Both Coleman and Robb said if elected they would maintain the state's right-to-work laws. Robb said he would "work vigorously against any alteration in the present character of the right-to-work law."
"If the General Assembly were to repeal the right-to-work law, I would veto that repeal," Coleman said in a telephone interview.
Both said they would promote coal production and exports and push more tourism. Robb suggested encouraging more tourist business in the Washington-Richmond-Tidewater axis by urging Amtrak to continue train service between Washington and Newport News and by improving bus routes between those cities.
Coleman and Robb said they would reduce burdensome regulations and also attempt to lure more high-growth industries, such as data proccessing, to the state. "A new, fast-growing major Virginia industry that deserves special attention is the data processing industry centered in Northern Virginia," Coleman said. "I envision a special program of the Virginia Division of Industrial Development to encourage this trend and to promote use of the facilities by the federal government." Coleman said federal agencies should use private industries' data processing, for example, to keep federal immigration records.
On the tax issue, Coleman ruled out increases in business and persnonal taxes. "A commitment not to increase taxes will be a basic precept of Virginia government over the next four years," Coleman said in a business development position paper. Robb said the state should coordinate with local governments on the taxes they impose because local taxes in some cases have increased more rapidly than equivalent state taxes.
Robb also rejected tax incentives for business as "giveaways" and "other ill-conceived schemes designed to benefit one taxpaying class at the expense of another." Coleman said "the more incentives the better" but added he hadn't yet developed specific positions on that issue.
Coleman said he is interested in enterprise zones, which offer special business incentives in depressed economic areas. But he said that program requires, for example, reductions in property taxes in the target areas that are contrary to the Virginia Constitution's requirement that real preperty be uniformly taxed. Coleman said he will work with the Reagan administration, which is advancing the concept, to help economically depressed areas.
On the same subject, Robb said the enterprise zone concept "is the most attractive option available to entice business to do for those areas and their inhabitants what government has to date been unable to achieve." He said the idea should be studied.
On the subject of small business, Coleman said he would start a Small Business Working Group to meet with him monthly. "This group would be the vehicle to insure that the special needs of this business community do not go unnoticed," Coleman said in a position paper.
Robb said under his administration, state agencies, where possible, would provide a one-stop licensing and information service for small businesses and develop a small-business economic data base. He also said he would establish an interagency task force of state government officials and an advisory council composed of small business representatives, which would at times meet with each other.
Coleman, calling on his background as attorney general, also said he is concerned that crime in the state may keep businesses away. "One reason jobs and industries choose to leave or not to expand up North is the severe crime waves that threaten the families of workers," Coleman said in a business development position paper. "Virginia has too much crime and we need to take a tougher line."
"In fact, nothing would be more helpful in attracting both tourists and jobs than a reputation for putting dangerous criminals behind bars and making certain they serve their full terms," Coleman said.
Robb, who as lieutenant governor regularly attended business openings and state economic presentations, has proposed improving the Virginia Industrial Development Corp., established in 1961 to supply long-term capital to new business ventures. "In recent years the VIDC has failed to fulfill the funcion envisioned by its founders," Robb said. "The need for the VIDC or an organiztion of similar purpose is more acute now than it was in 1961."
Robb also proposed a review to determine whether state laws and regulations "impose unreasonable limitations" on unconventional and venture capital investment in small, high potential firms.