Importantly, these VEDP-assisted projects will have a significant impact on local and state revenues across Virginia, increasing the Commonwealth’s ability to fund important needs for our citizens. The estimated new local tax revenue generated by these 201 announcements is $418 million over the next five years and $897 million over the next ten years. New state revenue is estimated at $234 million over five years and $546 million over 10 years.
With the start of the federal government’s 2016 fiscal year on October 1, Virginia faces another year of potential federal spending reduction as well as the cascading negative impact on Virginia’s employment and GDP. As a result of these spending cuts, Virginia has endured slower rates of job growth and the loss of jobs for knowledge workers in occupations such as IT and engineering in the Professional and Business Services sector. Comparing recent employment trends to historical growth rates shows that spending cuts resulted in an estimated 58,000 jobs not being created across the Commonwealth over the past two years, 47,000 of which were in Professional and Business Services. The failure to create these jobs translates into lower levels of tax revenue to support necessary government services.
As highlighted in the last issue of Commerce Quarterly, VEDP is facing a 7 percent budget reduction this coming year. These budget reductions will substantially diminish client contact through our outreach marketing programs. As many of you are aware, we have modified or eliminated our presence at a number of key events and significantly reduced our outreach marketing and lead generation programs.
Although we must do more to build upon these successes, the significant statewide budget reductions, including VEDP’s operating budget, have required us to adjust our forecast and reduce VEDP’s FY2016 investment goal downward to $2.7 billion. The job creation goal remains unchanged at 13,000. However, it is our desire and intent to significantly increase these goals as funding becomes available.
Strengthening VEDP’s operational budget is a top priority as we move into the 2016 legislative cycle. VEDP’s board of directors has created a Legislation and Policy subcommittee to help us deliver our message on the importance of acquiring and maintaining a viable budget to support Virginia’s economic development programs. Your continued assistance with this message is appreciated.
Budget reductions notwithstanding, VEDP continues to aggressively market Virginia’s advantages to target companies across the country and around the world. VEDP’s Governor-led, 11-day European Marketing Mission included 70 meetings and events with global companies. And, we are enhancing our export assistance to Virginia companies via the recently announced Virginia International Trade Alliance program — an initiative to expand participation in our international trade programs through increased partnership with Virginia universities and industry associations.
On behalf of VEDP, I thank all of you for helping to make FY2015 a successful year. We’re off to a strong start, and we look forward to joining with you once again to make FY2016 a great year for Virginia.