More than seven years after its inception, the Growth and Opportunity for Virginia regional economic development program appears to be improving regional collaboration, and many projects have had positive regional economic impacts, a new study by the Joint Legislative Audit and Review Commission found.
The General Assembly created GO Virginia in 2016 with the goal to advance regional economic growth and diversification by providing economic and workforce development grants. The grants must involve the participation of at least two local governments, school divisions or regional organizations, and all projects in a sample reviewed by JLARC met or exceeded this requirement, staff revealed at the commission’s meeting in Richmond on Monday.
However, because GO Virginia is a fairly recent program that focuses on long-term projects, the collection and evaluation of post-grant outcomes remains limited.
“We found that GO Virginia is likely improving regional collaboration and having positive economic impacts, but the program’s economic impact cannot be determined because project outcomes are not reliably reported,” Mark Gribbin, chief legislative analyst at JLARC, told the panel.
According to the study, the outcomes data reported for many projects is “unclear, inaccurate, or misleading.” For example, JLARC staff found that several projects reported jobs that are not attributable to their project activity, and the program’s outcome measure for jobs also combines two distinct activities with different economic benefits — number of jobs created and number of jobs filled — into a single measure.
The Virginia Department of Housing and Community Development staff, which oversees the program’s administrative side, said that projects should only count actual jobs created or filled for the measure, but in practice, several projects reported estimates of jobs that might have been created or filled, the study found. Consequently, only about 10% of the reported jobs created or filled by the sample of projects JLARC reviewed could reasonably be attributed to GO Virginia projects.
But despite these issues, the program is generally working well, “although we did find some eligibility and application requirements aren’t necessarily restrictive,” Gribbin said. “GO Virginia’s administration and governance structure makes sense for the program, moreover GO Virginia’s efforts do not duplicate other state programs.”
However, GO Virginia appropriations could be reduced if changes are not implemented and funds continue to go unused, Gribbin said.
The study found that only 74% of regional per-capita funds and 42% of statewide competitive funds have been used since the program began, although the use of funds, particularly regional per-capita funds, has increased in recent years.
The low utilization of funds has led the General Assembly to recapture funds twice since the program began, the study found, prompting JLARC staff to recommend changes to the match requirements, improved access to statewide competitive funds, and changes to other eligibility requirements that they said could result in an increase in the program funds used.
A majority of the projects reviewed by JLARC staff — 82% — involved additional collaboration with local entities, mainly local nonprofits or private businesses. GO Virginia also brought together key stakeholders to develop regional growth and diversification plans, which are required by the program, the study found.
Between fiscal 2018 and 2023, GO Virginia has awarded 266 grants totalling $110 million, averaging $140,000. Grants go to public organizations (67%) or nonprofits (33%) and cannot be used to benefit or attract any specific business. Spanning over two years, these short-term grants also cannot backfill funding for existing efforts.
The grants go to projects in specific target industries, such as advanced manufacturing, pharmaceuticals, green energy, cybersecurity and food processing, which are established in regional growth and diversification plans.
The program divides Virginia into nine geographic regions. “This allows, for example, Northern Virginia to focus on industries like information technology and life sciences, while more rural regions can put more emphasis on things like manufacturing and agriculture,” Gribbin said.
Nancy Agee, CEO of Carilion Clinic in Roanoke and chair of the Virginia Growth and Opportunity Board, which oversees GO Virginia, said in a statement Monday that the JLARC study confirms that the program is “achieving its intended purpose of encouraging greater collaboration to grow and diversify” the economy of every region in the commonwealth.
[Disclosure: Carilion Clinic is one of our donors, but donors have no say in news decisions; see our policy.]
“The report strongly validates the GO concept and suggests that the monies allocated to the program should be deployed even faster to help each region seize its economic and workforce development opportunities,” Agee said.
Most recently, Gov. Glenn Youngkin in September announced more than $3.7 million in GO Virginia grant awards for 11 projects, including two in Southwest Virginia: Strengthening Entrepreneurs’ Impact, a project of Roanoke-based Verge, received $577,800, and the Region 2 Talent Pathways Initiative Planning Application, a project of the Virginia Tech Center for Economic and Community Engagement, received $250,000 in state funds. [Disclosure: Verge is one of our donors, but donors have no say in news decisions; see our policy.]
“By investing in talent, bolstering entrepreneurial innovation and cultivating the conditions for startup success, we are actively shaping the future of our workforce and positioning Virginia as a hub for innovation and opportunity,” Youngkin said at the time.
