2018 labor force participation rates. Source: VEC. Click for larger view.
Laissez les bon temps roulez. Virginia’s strong employment climate is adding a financial spare tire to Virginia’s unemployment trust fund, now above 83 percent solvency by one actuarial measure and exceeding a federal recommended minimum balance on another measure.
The annual unemployment fund status update for a legislative oversight commission Wednesday lasted about 30 minutes, with the chairman, Del. Lee Ware, R-Powhatan, noting it was far shorter and less dramatic than some previous meetings in tight times, adding “it’s a good drama not to have.” The presentation is here.
The projected $1.45 billion fund balance for next December 31 will be another record, said Virginia Employment Commissioner Ellen Marie Hess. The figures used are not adjusted for inflation, however, and the state has been at higher solvency levels in previous periods of prosperity. The funds are just sitting there earning interest and awaiting the next recession, which history deems inevitable.
The previous bottom for the fund came in 2010, and Virginia needed to borrow federal funds in 2010 and 2011 in order to pay unemployment benefits. The fund has been climbing back since 2012, and Hess projected an 86% solvency level and almost $1.6 billion balance for 2020. Will this unexpectedly long expansion reach through 2020? Continue reading
Since we have been discussing manufacturing in Virginia, I want to take the opportunity to recommend this wonderful book. It is the story of how one man fought to maintain his manufacturing operation in Virginia. While the main focus of the story is the problem of Chinese subsidization of companies that were competing with Virginia furniture manufacturers, the story does illuminate many of the other problems facing manufacturers in rural Virginia. In addition, for long-time observers and students of Virginia politics and history, the story of the interlocking family operations- Bassetts, Stanleys, Vaughans, and Lanes–that comprised furniture making in Southside Virginia in the 20th century, is fascinating. (I just discovered to my chagrin that Jim Bacon had a
The subject of Macy’s book, John Bassett, III, has published his own book on how manufacturers can continue to succeed in America. I have not read this one, but, based on his success, he needs to be taken seriously.
Gentlemen may prefer blondes but localities prefer proffers. A proffer is an arrangement between a locality and a land developer whereby the developer offers something of value in order to get a rezoning request approved. Why do developers want land rezoned? For residential development they want to build more homes on the land than the land’s current zoning allows. Why would localities object to these rezoning requests? Theoretically, the locality’s strategic and financial plans are based on providing services at an overall population density dictated by the current zoning. Adding more density increases the locality’s costs for services like public schools. Localities are understandably worried about the unfunded mandates that up-zoning can cause. How do proffers help? Items of value (money, land, astroturf, etc) are given to the locality by the developer in order to fully or partly cover the additional costs to the locality of development at higher density than was planned. These proffers reduce the developer’s profit margin on the project at hand so they are not popular with the development community. 
Blue state blues.
What can Virginia learn from Nashville (Part 2)?
First, a step back. Admiring the rapid growth of Nashville requires a fundamental belief. One has to believe that rapid growth in urban areas is a good thing. This is not a universally held belief, in Virginia or in Tennessee. Thomas Jefferson, for example, was quoted as saying, “When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe.” While I understand the bucolic allure of country living I believe that the economic future of the United States and Virginia will largely be in the cities. I think Virginia should be striving to create an environment conducive to fast growing, safe, livable cities. To that end much can be learned from Nashville as well as Charlotte, Austin, Raleigh, etc. Continue reading →
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Posted in Commentary, Economic development, Economy, General Assembly
Tagged DJ Rippert, Don Rippert, Nashville