They rank their top 10 states: Virginia – North Carolina – Utah – Texas – Tennessee – Georgia – Minnesota – Colorado – Washington – Ohio.
Chief Executive Magazine in April ranked their top 10 states thusly: Texas – Florida – Tennessee – North Carolina – Indiana – South Carolina – Ohio – Nevada – Georgia – Arizona. Virginia comes in at #13 for them.
Congratulations are due the Northam administration. For the second straight year, Virginia ranks No. 1 in CNBC’s list of the top states for business. There are many best-business rankings, but CNBC’s is the most prestigious. Hopefully, the Old Dominion will see increased interest from corporate investors as a result.
Some will say that the No. 1 ranking vindicates the spending and regulatory policies of the Northam administration and Democratic-dominated General Assembly, which we have described as anti-business on this blog. I disagree. Bacon’s Rebellion will explain why shortly.
But I don’t want that discussion to cloud the good news. Let’s spend a moment basking in the PR bonanza.
The Luxembourg-flagged Vole Au Vent is seen here installing one of Dominion Energy’s two experimental wind turbines 27 miles off the Virginia coast last year. Photo credit: Dominion. An American-made vessel will install the next 180 or so turbines.
by James A. Bacon
The primary justification for spending $7.8 billion to build a wind farm off the Virginia coast at a significantly higher cost per kilowatt than other energy sources is to advance Virginia’s goal of achieving a zero-carbon electric grid by 2050. But an important secondary consideration is the hope that the project will jump-start the creation of a new industry in Hampton Roads serving the emerging East Coast offshore wind industry.
Virginia has deep channels, no bridge obstructions, an active maritime community, and perhaps the nation’s largest shipbuilding industry. Dominion Energy’s Coastal Virginia Offshore Wind Project, it is hoped, will catalyze development of a multibillion-dollar offshore wind-energy industry in Virginia.
That case is a little harder to make these days. When Dominion decided to invest $500 million in building an offshore wind-turbine installation vessel, none of Virginia’s shipbuilding companies was interested. All were booked up with Navy contracts. The vessel, named after the mythical Greek sea monster Charybdis, is being constructed in Brownsville, Texas. Continue reading →
Northern Virginia’s population is growing, but not nearly as fast as before. According to a new study by University of Virginia demographer Hamilton Lombard, Northern Virginia accounted for 66.5% of the state’s population growth between 2010 and 2019, but slipped to 33.7% in the last year.
“While Northern Virginia is still growing in population, its recent slowdown is remarkable given how long so much of Virginia’s population growth has been concentrated in Northern Virginia,” Lombard said in an interview with UVA Today. “Since 1980, Northern Virginia has contributed to over half of the commonwealth’s entire population growth. Earlier in the 2010s, over two-thirds of Virginia’s population growth occurred in Northern Virginia.”
“Yet, since the mid-2010s, population growth in Northern Virginia has slowed considerably as more residents have left the region, often moving to other Southern states,” Lombard said. “Some of the initial out-migration may have been driven by the federal budget sequestration and shutdowns, which slowed growth in the region’s economy.”
Northern Virginia has driven demographic, political and economic change in Virginia over the past three or four decades. The region now dominates the state in much the same way that Chicago overshadows the rest of Illinois and New York City runs the Empire State. A marked slowdown in the region’s growth could have momentous consequences for Virginia’s economic prosperity and political economy. Here’s the big question: Was 2020 a transitory blip or does it portend longer-lasting changes? Continue reading →
Greenhouses have been used since the time of the Roman Empire. A couple of Virginia Beach entrepreneurs are planning to use this old technology to harness the sun’s energy in a big way.
Their company, Sunny Farms, plans to invest $60 million to build hydroponic greenhouses on more than 30 acres, about 25 football fields, over three years. It would be one of the largest greenhouse facilities on the East Coast. The goal is to produce fresh vegetables for the big box chain stores in Hampton Roads, as well as for military commissaries. In its first year of operation, the company projects it will grow 10 million plants. Continue reading →
The political wannabes in both parties and the state’s media are continuing to ignore it, but the argument over the proposed motor fuel carbon tax called the Transportation and Climate Initiative rages in comments on the proposal flowing into its advocates.
The Thomas Jefferson Institute has also launched a short video (above), perhaps just the first, to alert the public through more populist means. It features owners of two regional fuel businesses, well known as major local employers and taxpayers. Without doubt, Virginia’s membership in TCI would shrink and perhaps severely damage those businesses.
The video was actually ready to use had the 2021 General Assembly taken up the issue, but Governor Ralph Northam did not ask for legislative permission to join the interstate compact involved. The state remains involved in the planning for the cap and tax and ration scheme, now set for 2023 in the states who agree to the compact.
If put in place, all fuel Virginia wholesalers would need to buy government-issued allowances to sell gasoline or diesel, in effect a carbon tax. The amount of allowances will be frozen to prevent the any growth in fuel sales, and then decline annually to force down consumption, in effect rationing. Continue reading →
Image credit: “Has the Pandemic Changed Cities Forever?”
by James A. Bacon
If you’re looking for a good Sunday read, consider an article by Tim Sablik, “Has the Pandemic Changed Cities Forever?“, in the Richmond Federal Reserve Bank’s Econ Focus. Sablik does a fine job of sketching out the big issues identified by the nation’s leading urbanologists as they ponder the impact of the COVID-19 epidemic on urban development.
In a nutshell, Sablik argues that (a) the epidemic has clobbered the urban cores of American metros as knowledge workers have drastically changed their work habits and personal preferences, (b) that the pendulum will swing back partially as the epidemic subsides, but that (c) things will not go back to the way they were. There are profound implications for cities and counties in Virginia as they plot their futures. Reading Sablik essay is a good place to start any re-evaluation. Continue reading →
The overall effective tax rate on various kinds of businesses in Virginia, and how they rank against the other 50 states. (Lowest = #1) Click for larger view. Source: Tax Foundation and KPMG LLC
by Steve Haner
Virginia is far more tax friendly to established businesses than it is to new ones. That’s one major conclusion of a major state-by-state business tax comparison released today (here) by the Tax Foundation and KPMG LLC.
In neighboring North Carolina, on the other hand, the tax structure encourages new investment with more attractive rates for incoming businesses of several types. It has been a conscious strategy for that state’s political leaders for some time.
Instead of seeking to put an overall ranking on the state’s business tax climate, as has been done in the past or in other studies, the Tax Foundation devised eight imaginary firms in different industries and then calculated their effective tax rate in each of the fifty states. It used tax laws and incentives as they were in force January 1 of this year.
One of the principal authors is a former General Assembly legislative aide well known around our capital, Jared Walczak, now a vice president at Tax Foundation. This approach of comparing how the various states would tax a set of reasonably typical firms is a big step up from previous methods. Continue reading →
The Tobacco Commission (Virginia Tobacco Region and Revitalization Commission) has come up with a program that does not involve pork-barrel grants.
Two of the problems afflicting the area served by the Commission, Southside and Southwest, are a shortage of people to fill certain jobs and a shortage of young adults putting down roots in the area. Its Talent Attraction Program is designed to address both problems. Under it, young graduates working in certain field can get up to $48,000 in student loans paid off.
The program is open to anyone graduating since 2019 with a bachelor’s degree or higher. Each participant must commit to living in the area for 24 months and working in one of the following areas:
Public School Teacher in Science, Math, Technology/Computer Science, or Career and Technical Education (Grades 6-12)
Public School Special Education Teacher (K-12)
Speech Language Pathologist
Industrial or Electrical Engineer
Information Security, Network, or Computer Systems Analyst
I haven’t contributed much to BR lately since I am slammed with non-Virginia work. I did manage to help out on a Podcast about how the General Assembly has changed the state over the last two years as Democrats have gained power.
This Podcast is produced by WTJU, the University of Virginia radio station. I do a weekly talk show on state politics and economics and, on occasion, work on Podcasts.
Joining me is Sally Hudson, a delegate from the Charlottesville area. She is Assistant Professor of Public Policy, Education and Economics. Sally studied at the Massachusetts Institute of Technology and Stanford and is one of the youngest members of the General Assembly.
Virginians with college degrees were far less likely to be laid off during the COVID-19 epidemic, and their occupations are in highest demand during the economic upturn, concludes an analysis written by the Virginia Economic Development Partnership and distributed by the State Council of Higher Education for Virginia (SCHEV).
“In order to ensure an inclusive, resilient, COVID economic recovery and continued growth across Virginia,” writes Pam Harder, managing director-strategic talent initiatives for VEDP, ” now more than ever we need to invest heavily in helping those without four-year-degrees find affordable and accessible pathways to good jobs.”
Harder makes the case that Virginia needs to “invest in education across the entire spectrum — industry certifications, state licensures, apprenticeships and certificates, as well as traditional degree programs.” Continue reading →
According to WJLA-TV7, The Fairfax County Board of Supervisors has approved the next phase in the evolution of the former Lorton landfill off of Interstate 95: It will become a 1,700-foot ski slope. That’s right, a ski resort. In Northern Virginia. Only 10 minutes from my home.
The project, Fairfax Peak, will be a 450,000-square-foot indoor snow sports facility with a 100-room luxury hotel, sky bar, restaurants, and a bunny slope. The first of its kind in the United States, it will have not have only the longest indoor ski slope in North America but one of the longest in the world.
The project will be super-green too. Aside from the obligatory solar panels, the planned facilities will use waste heat from the adjacent county Waste-To-Energy plant. In other words, the incinerator will serve as bona fide co-gen plant.
Interestingly, per a Google search, Landfills-to-Ski Slopes is a global trend. The picture above is an artist rendering of a Denmark power plant that will incinerate trash while using the energy produced to power the city and the ski slope. Continue reading →
An enduring question on this blog is what accounts for the lagging economic performance of the Hampton Roads metropolitan statistical area. Growth in Gross Domestic Product since 2001 has been roughly half that of Virginia’s, while growth in real personal income since 2010 has lagged by 30%. We have explored various explanations on this blog from the necessity of adapting to increased flooding to a cap on natural gas supplies, from restrictions on water usage to excess reliance on the military as an economic foundation.
Ironically, an important reason for the region’s slow growth may be the success of one of its key industries, its ports. Since the introduction of cargo containers, ports have required more land. As ports expand, argues a new paper published by the National Bureau of Economic Research, they literally “drive up land rents and crowd out other economic activity.” Continue reading →
Coal mines as source of geothermal cooling. Shown here: Will Payne, director of InvestSWVA. Credit: Virginia Business.
by James A. Bacon
Six localities in far Southwest Virginia have agreed to offer big tax breaks in a bid to recruit more data centers to the economically depressed region. The Project Oasis initiative will dangle the lower taxes as well as geothermal cooling from old coal mines as enticements that no other region can match.
The localities in the Lonesome Pine Regional Industrial Facilities Authority — Dickenson, Lee, Scott, and Wise counties and the City of Norton — have agreed to tax data-center equipment at a rate of $0.24 per $100, almost half the rate of the $.40 rate, the previous lowest rate in the state, that enabled Henrico County to attract a $1.75 billion Facebook data center.
As a kicker, Project Oasis offers industrial sites located near former coal mines filled with water naturally cooled to a temperature of 51 degrees. Energy consumption for cooling is a major expense for data centers. Project Oasis claims that geothermal cooling could save data centers more than $1 million annually in reduced electric costs and municipal water purchases. Continue reading →
First published in the Fredericksburg Free Lance-Star Feb. 26 then distributed by the Thomas Jefferson Institute for Public Policy.
The lesson of the Texas grid collapse is not just about electricity. Imagine the week Texans would have had if once the power went out and stayed out, they had no gasoline, diesel, propane, or natural gas to fall back on. How much worse would their plight have been without natural gas heating homes and businesses, propane space heaters and grills, and gasoline or diesel-powered cars and trucks to get where they needed to go? Continue reading →
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