Virginia Lt. Gov. Bill Bolling sat down with Prince William County leaders Tuesday in Manassas to discuss subjects pertinent to conducting business in the Commonwealth during a time of political change and economic uncertainty.
Though Tuesday’s visit was part of his nine-stop,“Reduce The Red Tape” tour—a project purposed to promote business growth at the federal and state level—much time was spent talking about the threat of government sequestration and the sum of its effects.
If sequestration cuts proceed as planned, in January 2013, the federal government will automatically cut $1.2 trillion in spending over a 10-year period: half from the defense budget and the other half from domestic programs.
“We’re obviously concerned about the impact on the Virginia economy,” Bolling told a roundtable of about nine chamber members. “… We view it as a threat … perhaps the single largest eminent economic threat to Virginia today.”
There are about 149 government contractors in county, Prince William County Chamber of Commerce officials said Tuesday.
Bolling said he’s had a lot of roundtable discussions with defense contractors about the sequestration.
There are going to have to be spending cuts at the federal level, but the concern is that defense makes up 20 percent of the budget, but accounts for 50 percent of the proposed cuts, Bolling said.
Virginia, particually Northern Virginia and the Hampton Roads area rely heavily on the U.S. Department of Defense bussiness, he said.
“It hits us (Virginia) disproportionately hard,” he said.
From the Prince William chamber’s perspective, even if its members are creative, it could be the first time post-2008 that Virginia will dip into a recession, Prince William Chamber CEO Rob Clapper said on Tuesday.
Bolling said he's heard it’s the uncertsainty of the sequestration that bothers many contractor.
Sequestration is just one element of three, large looming concerns. The other two are: the expiration of federal tax cuts which could mean a trillion dollars in tax increases and the debt ceiling, Bolling said.
These things could have an impact on the third quarter of 2013, which he fears could push the country back into a recession, Bolling said.
“That’s the light at the end of the tunnel that could very well be a train,” Bolling said.
Cutting the Red Tape
Keeping in line with the main purpose of his visit, Bolling asked how the government could making conducting business easier for small operations by eliminating some of the red tape and bureaucracy.
Clapper asked about streamlining the process for businesses seeking minority status that have already obtained that status through the federal Small Business Administration.
Right now businesses that have obtained the federal status have to go through the process all over again if they want to be recognized as a minority operation at the state level, Clapper said.
Bolling said that seems to be a duplicative process and he would look into it.
Another chamber member asked about the Virginia state taxation website and its layout for business owners.
If he is working with state tax withholdings for his company, but wants to switch and work with unemployment taxation, he has to log out and then log back in, the member said.
He didn’t understand why he had to go through that process, even though he’s working with the same company.
Bolling and another chamber member surmised that the software on the site is layered and was developed at different times, hence the need for the extra steps.
Manassas was Bolling’s fourth stop in the nine-stop tour. Prior to visiting Manassas, he visited Fredericksburg.