Virginia has a history of approving big-time incentives packages for corporate industry. The $1.1 billion semiconductor manufacturing expansion announced by Infineon Technologies last December in Henrico County was made possible by a state and local incentives package that could
total $60 million.

      Whether the state can continue to make commitments that large remains to be seen. Gov. Gilmore announced in August that Virginia missed its June 30 revenue forecast by $52.4 million, -- due in large part to the slowing economy. The actual shortfall would have been twice as large if there hadn't been delays in refunding income taxes.
      Some Virginia politicians blame the governor's much-publicized car-tax reduction for the shortfall. State Sen. Kenneth W. Stolle, R-Virginia Beach, who opposed Gilmore's plan to continue the car-tax phaseout, said, "Make no mistake about it, the car tax is what is driving this whole debacle."
      While not everyone agrees that the car-tax reduction is to blame for the revenue shortfall, most economic developers in Virginia privately say that the car-tax phaseout is hurting their ability to fully fund all of the development efforts they need to keep the state competitive. They are particularly concerned about the state's ongoing ability to incentivize major corporate plant expansion.
      "State incentives are a very important part of what we do," says Greg Wingfield, president of the Greater Richmond Partnership, which in May was named one of Site Selection magazine's Top Ten Economic Development Groups of the Year. "In the case of Infineon, the company will be reimbursed on a per-chip basis. Also, Henrico County was instrumental in investing $40 million into the White Oak Semiconductor Park, which has since attracted Hewlett-Packard."
      Today, some 65 semiconductor manufacturers and equipment suppliers call the Greater Richmond area home. Comprised of the City of Richmond and the counties of Hanover, Henrico and Chesterfield, the Greater Richmond Partnership secured more than 11,000 jobs and nearly $2 billion in capital investment during its 2000-2001 fiscal year. After Infineon, the largest investments came from Capital One ($700 million), First Union Securities ($120 million), ERNI Components ($98.4 million) and Maruchan Virginia ($31 million).
      Recruiting biotechnology and pharmaceutical companies is the next major initiative for the GRP -- and the partnership has already achieved some success. Germany-based Boehringer Ingelheim, a world leader in the pharmaceutical industry, announced that it will expand its Virginia operations for the second time since March 2000. The firm will establish a drug synthesis laboratory in the Virginia Biotechnology Research Park in Richmond. The company will invest $2.5 million over the next five years in the lab.
      The Biotechnology Research Park is a huge success story for the state. Built with bond money approved by the voters of Virginia, the seven-building complex next to the campus of Virginia Commonwealth University now has 766 workers occupying nearly 500,000 sq. ft. (46,450 sq. m.) of incubator and R&D space. All existing buildings are full, with buildout estimated at 1.5 million sq. ft. (139,350 sq. m.).