Bacon's Rebellion

We’re Number Two! We’re Number Two!

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by

James A. Bacon
in

Will Vehrs at Commonwealth Conservative has picked up on a press release from the Governor’s office touting Virginia’s No. 2 Business Climate ranking in an annual survey by Pollina Corporate Real Estate, a corporate site relocation firm. The press release from the Governor’s office said:

“Virginia’s aggressive and focused economic development efforts together with our positive business climate have earned this high praise,” said Governor Kaine. “Attracting jobs and investment is a top priority of our Administration and we’re proud of this continuing accomplishment.”

The ranking is based on 29 criteria over which states exercise policy control, including taxes, human resources, right-to-work legislation, energy costs, infrastructure spending, workers compensation legislation and jobs lost or gained. Pollina won’t release its report unless you pay for it, and Bacon’s Rebellion is too cheap to fork out the $75 bucks, so we don’t know why Virginia rated so favorably. The Governor’s press release adds only the following vague statement:

While many states are losing ground to global competition due to poor efforts at keeping jobs and attracting businesses, the report praised Virginia’s “pro-business policies that result in job growth,” said Dr. Ronald R. Pollina, the study’s author and president of Pollina Corporate Real Estate.

Vehrs’ caustic response: “You’d think [the Governor] would decline the award, what with the crippling ‘transportation crisis’ and businesses allegedly deserting the state en masse because of it.” (Click here to read the rest of his commentary.)

Touche, Will. Some observers may use the study as ammo to suggest that the 2004 tax increase did Virginia’s economy no harm. My advice: Don’t go there. The 2004 Pollina study ranked Virginia Number One. Virginia fell a notch to Number Two in 2005, the year the taxes went into full effect. Coincidence? I think not. (Virginia’s most noteworthy strength, noted by Pollina in 2005, was the professionalism of its quasi-independent economic development agency.)

Further, I would reiterate my old argument that no single tax hike is big enough, by itself, to put a big dent in a state’s business climate. It’s the cumulative tax policy over a long period of time — many small changes adding up to something big — that make the difference. Combine the 2003 increase in “fees,” plus the 2004 tax hikes, plus the proposed 2006 tax hikes, and you’ve got enough to make a difference. If Gov. Kaine’s tax increase is enacted, let’s see how Virginia ranks next year.

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5 responses to “We’re Number Two! We’re Number Two!”

  1. James Young Avatar
    James Young

    Thank God for Virginia’s strong commitment to the Right to Work law. Perhaps that’s what kept us as high as we remained.

    This was an unpaid political comment.

  2. James Atticus Bowden Avatar
    James Atticus Bowden

    Run the numbers Jim. One big tax hike, like the Chicken Little the Infrastructure is Failing! 04 hike hurts. You have to look at how much capital is sucked out of the economy vs how much is being dumped in with the Federal Government. If more money is coming in than going out, the effect of the hike won’t be felt as universally. It will be felt more acutely where the Federal dollars don’t reach directly.

  3. Reid L. Avatar
    Reid L.

    Who are you trying to kid about the Right to Work Law? There hasn’t been a serious move to change that law in Virginia since the 40’s. All the National Right to Work Committee and its affiliates do is to use it to solicit funds to keep themselves employed. I used to contribute until I figured out that obvious fact. It’s a scam insofar as Virginia is concerned.

  4. Anonymous Avatar
    Anonymous

    Ohmygod — if we raise the gas tax we might slip to number 3! Then it would be all over…Virginia has low unemployment insurance costs, low workers comp costs, the right to work law, few regs that are stronger than required by the feds, a tort system that isn’t run by the plaintiff’s bar, reasonable development costs, low taxes (still) and overall flat tax rates, great state universities, a key location on the east coast, the ports and airports, and a good transportation system that will only stay that way if we stay ahead of the curve. We are always in the top four or five on those things.

  5. James Young Avatar
    James Young

    I don’t work for the Committee, Reid, but during my tenure at the Foundation there have been serious runs against Georgia’s and Nebraska’s. When Gray Davis was elected California Governor, among his first acts was to force state employees and school teachers to pay union dues, thus guaranteeing a permanent flow of money into Democrat Party coffers and an expansion of the pre-existing Democrat campaign workers that union employees (not union-represented workers) become between Labor Day and Election Day. Meanwhile, freedom was expanded by the passage of Oklahoma’s Right to Work law, and I and my Foundation colleagues have full dockets representing the interests of workers who are not protected by Right to Work laws.

    Yours, Reid, is precisely the kind of complacence that union bosses rely upon to attack worker freedom. While I am thankful for your past contributions, those who understand the long-term activities of the far Left also understand that a bulwark for freedom must exist of the field is not to be left clear for successful attacks and more forced union dues for far Left politics.

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