McDonnell: Focus on Transportation, Education to Strengthen Economy

Posted: Updated: Jan 4, 2013 05:46 PM EST

The Virginia economy fared pretty well in 2012.

"We'll look back on 2012 as probably the first turning point since the financial crisis in 2008," said Bruce Whitehurst, president and CEO of Virginia Bankers Association.

But the financial forecast is less rosy for 2013, as lawmakers in Richmond grapple with continued uncertainty in Washington.

In front of about 700 business leaders Friday, Governor Bob McDonnell made his case for how he thinks Virginia can strengthen its economy, starting with a two-pronged focus on education and workforce development, and improving transportation.

The governor has announced two parts of a major education reform package, and will announce his transportation plan next week.

But those are long-term goals; the biggest issue facing Virginia is just ahead. If Congress doesn't avoid across-the-board spending cuts scheduled for March 1, economists say Virginia is heading for another recession.

"So I think we all have to realize that to some degree we're kind of held captive to what the federal government does or doesn't do," McDonnell said. "The best thing to do is just be conservative. Be cautious."

He was quite cautious in his budget proposals last month. In light of uncertainty in Washington, he recommended increasing the rainy day fund to $740 million, and maintaining a conservative outlook for 2013.

But of course, the financial future of the state depends on what happens during the course of the next three months.