It just goes from bad to worse… In 2011 Virginia ranked as the top state for business in the annual CNBC ranking. In the 2015 ranking, the Old Dominion had tumbled to 12th place, the fourth decline in a row.

Metrics deteriorated in many categories:  cost of doing business,  cost of living, infrastructure, economy, quality of life, and technology & innovation. Virginia improved slightly in workforce, education, business friendliness and access to capital.

Virginia’s economic development strategy is obsolete, if not outbroken. Governor Terry McAuliffe is a great salesman, and he’s doing yeoman’s work traveling the globe in search of corporate investment. While the old-fashioned corporate recruitment game will always be a pillar of Virginia’s economic development strategy, it is only one pillar among many. We need to be firing on all cylinders. We’re not.


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21 responses to “Free Fallin’”

  1. CrazyJD Avatar

    The man plays a Gibson; how could he not be free fallin’?

  2. larryg Avatar

    confused. what really has changed in Va over the last few years?

    1. LifeOnTheFallLine Avatar

      One: The sequester
      Two: The McDonnell administration’s terrible decision making regarding the state’s transportation network.

  3. larryg Avatar

    The sequester affects the cost of doing business, cost of living, infrastructure, economy, quality of life, and technology & innovation.?

    Who Knew?

    So Virginia’s status as a top state for doing business is dependent on how much money the Feds spend?


    1. LifeOnTheFallLine Avatar

      It very much impacted the economy – it was a significant loss of business – and without it driving the NoVA IT sector it sucked some of the air out of the technology and innovation businesses in that part of the state.

  4. LifeOnTheFallLine Avatar

    So many of Virginia’s wounds are self-inflicted. A lot of it comes from the bipolar nature of our state’s politics. We operate under a mostly Dillon-rule formula with a lot of centralization but with politicians who generally don’t believe in the power of government and don’t want to be held responsible for any decisions. So, you get…

    – A transportation infrastructure run by a CTB appointed by a governor and funded by politicians from parts of the state who hate the other parts of the state (RoVA: Don’t raise my taxes, but push snow and fix my roads! And screw NoVA and Hampton Roads! ; NoVA: Please, raise our taxes, but for the love of God spend all the money here, who cares about Hampton Roads and RoVA? And why aren’t we our own state yet?; Hampton Roads: Don’t raise our taxes, don’t spend money in NoVA under any circumstances ever because we hate them and build us bridges and tunnels with no tolls!). In a rational world, we would roll DRPT back into VDOT and give at least 85% of the construction budget to expanding VRE and Metro service in NoVA. That’s where the worst congestion is, and anyone who thinks we can solve it by building more roads is ridiculous.

    – A legislature that turned down free federal money for healthcare expansion. I don’t care that its not actually “free” because someone paid taxes for it (including us!) and that it might run out one day. It was on the table and we decided there was nothing we had to spend it on. Agree with Obamacare or not, leaving money on the table is stupid politics. Speaking of stupid politics, any Virginia representative who voted in favor of sequestration who is still in office needs to be drummed on out.

    – Our public college system. We have 16 schools, which is the same amount as the UNC system. They have three engineering schools (NCSU, NCA&T, ECU) and we have nine (VCU, UVA, VT, JMU, NSU, VSU, VMI, GMU, ODU). We have four public medical schools (VCU, UVA, VT, EVMS) and they have two (UNC Chapel Hill and ECU). We have three public law schools (UVA, GMU, W&M) and they have two (UNC Chapel Hill and NCCU).

    They run a much more centralized system, which works in their favor because they don’t have as many public schools competing for the same types of students and teachers, spreading the specialization thin. We run a centralized system in that the GA has to approve certain tuition and fee changes, but doesn’t dictate to the colleges what they can teach. This is absurd. There is absolutely no reason for GMU, VT, UVA, VMI and ODU to all offer complete civil engineering programs. Does GMU’s law school really provide a service not fulfilled at UVA and W&M? Instead of offering academic cooperation and coordination, we force these institutions to compete with each other and don’t allow them to truly specialize in areas that might make the most sense. Honestly, we could probably keep ten schools (in scientific order of excellence: VCU, UVA, VMI, VT, EVMS, GMU, W&M, VSU, JMU, ODU), trim the rest and reinvest that money into keeping tuition down at the rest of the institutions. UVA can keep VCTIR and VCU doesn’t currently have a civil program (although it should since it’s an urban center) but it does have a nuclear engineering program, ODU can keep coastal and aerospace engineering, VT can keep mechanical and GMU is in a prime location to be Virginia’s central university for transportation engineering, as a military institute VMI probably needs a structural engineering component, but the rest should all be on the table. Tech doesn’t need a medical school, but UVA, VCU and EVMS all make sense to keep theirs (and honestly, EVMS should be rolled into ODU, terrible as ODU is). UVA at Wise should be slightly restructured to put an increased emphasis on becoming a premier institution for education, nursing and social services for SW Virginia.

    I can’t think of anything else for now. Anyway, LOTFL for governor.

    1. Cville Resident Avatar
      Cville Resident

      Really good post.

    2. Right on all counts. Let me know where to send my contribution to the LOTFL for Governor campaign fund.

  5. LOTFL, I appreciate with and agree with the need to restructure the state programs to some extent, but the comparison with the NC public system doesn’t ring true with my experience. I’m not sure how deeply the misunderstanding might be, but there are plenty more engineering programs in NC than three. My graduate work was completed at Western Carolina, which has a more robust engineering program than JMU. Now yes, it is part of the UNC system, but it still is a state school. I would consider it more of an engineering school than JMU, but I really wouldn’t count either as such, since they only have Departments of Engineering versus Schools or Colleges of Engineering.

    1. LifeOnTheFallLine Avatar

      I knew I was going to miss something, but to be fair WCU has programs in construction management and engineering technology and is only ABET accredited for EE and two engineering tech programs. JMU is ABET accredited for its engineering BS. That’s still a 4:9 ratio.

      Now, some of the other UNC schools have pre-engineering programs where you do two years at UNC Asheville and then finish out at NCSU.

  6. I accidently posted before finishing. I also think that it would be nice to better leverage our educational system; that has been effective in the Triangle area, but the rest of NC doesn’t have those same resources and yet their economy is bypassing ours. NC also seems to have no problem investing in the infrastructure of rural areas as opposed to dumping the majority of funds into their big three metros. One can simply look at the development of the Interstate system in NC to see that the leadership has a more balanced and better developed infrastructure than VA will ever have. This has provided the backbone for business development that we don’t have in the majority of the state. The entire middle and southern portion of the state is left wanting. Meanwhile NC is pushing forward on another Interstate-level route from Rocky Mount to Tidewater. Maybe NC will have a huge debt that leads to insolvency in the future, but things seem to be working for them. Some research has suggested that NC has generated 30,000 jobs for every 1B in transportation funding.

    1. LifeOnTheFallLine Avatar

      NCDOT is also responsible for operating or overseeing the DMV, Ports, Public Transportation, Aviation and Rail programs with about 14,000 employees (compared to 7,500 for VDOT). Everything transportation is under one roof and so the left hand can talk to right.

      NC also doesn’t appear to have the weird sectionalism that has manifested in Virginia. When I was down there I didn’t notice any real animosity from the people in the mountains towards the people in the interior or from the coastal residents towards everyone else. Here it seems that every region thinks someone else is spending transportation money that is rightfully theirs.

      I know VDOT is supposed to present plans for I-73 to the GA in January to bring another interstate into SW Virginia, but I have little hope it will provide any additional juice to Roanoke or Martinsville (I could always be wrong, though). Bristol is right on I-81 and these days is mostly a collection of old neighborhoods and abandoned strip malls. If we’re going to build a new interstate in Virginia it should be Roanoke-Lynchburg-Charlottesville-66.

  7. Cville Resident Avatar
    Cville Resident

    I will echo something that Peter posted the other day (Are things really that bad?) with a twist…..

    I’ve been to all of the big 3 metros (NoVa, HR, Richmond) in the past calendar year at least for one weekend, if not more. I have a lot of friends/ former colleagues that work in all 3.

    Yes, sequestration has put a strain on NoVa and Hampton Roads. But I just don’t get the sense that things are “caving in.” Slowing down and (as DonR and TMT have posted about NoVa tech) transitioning…..but there’s still a lot of economic vitality in all 3 major metros. Obviously, Charlottesville and Harrisonburg are small, but when you look around both, you see plenty of projects in motion. When I’ve visited Richmond in the past year, I certainly didn’t say to myself, “Gosh, things must be pretty stagnant.” It seemed like plenty of economic activity was visible and when I read Richmond Bizsense online, I don’t get the idea that things are bad.

    So….and I hate to sound like a broken record….how much of Virginia’s “collapse” in this ranking and the 0% GDP growth ranking is “Virginia” and how much of it is rural Virginia being an enormous economic drag that makes all of the macro Virginia indicators lag? Like I posted earlier this week, a friend who is a co-owner of a small tech firm in Virginia Beach recently told me that he’s seeing solid signs of the region emerging from sequestration.

    1. LifeOnTheFallLine Avatar

      My only concern with Richmond is that the local economy might be too tied to the fates of VCU. The past decade has been really good to Virginia’s most awesome university and Richmond has seen a reversal of fortunes. But if enrollment keep dropping and VCU stops building I don’t know that the city economy is diverse enough to keep from stagnating.

      I do wonder if a downturn in federal/defense activity might be a net positive for Hampton Roads. I know the ports down there are uniquely situated for success from just the water depths and I’ve long been curious how much the military presence hems in the ports’ ability to do business.

  8. TooManyTaxes Avatar

    Fairfax County and its neighbors aren’t ready for a big short sale. There remains considerable business here, and government contracting has not ended. But we rode very high in the saddle since 9/11 and, like any horse ride, it had to end. The horse has run away, and we are walking.

    I may stand alone, but I still see our biggest strategic weakness is that the mind- and skill-set is geared to services the federal government – by working for it as employees; navigating its rules, regulations and politics; and by providing goods and services consumed by the feds. After 30 plus years here, I see the people as generally quite bright, hard-working and skilled at what they do. But I don’t see “us” as having the same skill sets needed to become a mecca of business enterprise.

    We also tend to elect stupid people to the General Assembly. Because many believe in taxes, regulation and spending, they tend to vote for bills that achieve those results regardless of the impact on their constituents. Example, Senator Barbara Favola saying that expanding Medicaid could not cause spikes in ER care as occurred in Oregon and Washington because Virginia would adopt a managed care plan despite the fact that both Oregon and Washington have managed care plans quite similar to the proposed Virginia managed care plans. Whether one supports expansion not, Favola’s reasoning is simply wrong and utterly stupid. Yet it was cheered by people with multiple college degrees. I’d rather be represented by a hillbilly who knows how to pick Favola’s constituents’ pockets.

    1. larryg Avatar

      just about every National Defense agency in the govt has found a home in and around the beltway … It’s much more than DOD…

      and the thing is – the GOvt and especially DOD and National Defense agencies are voracious consumers of technology and services the civilian sector wants also – like Drones and database technology.

      and TMT and his Conservative fetish on elected officials and govt programs — despite being shown the Colorado Study on ER use – still prefers to ignore the data and focus only on select data… in which the Oregon “study” was based on “perceptions” no hard data.

      but WHY would ANYONE expect ER use to change overnight to begin with since the problem is decades long and ingrained in many who never had insurance to start with and why would anyone have such a complaint without a ” we should be doing this instead” ?

      The school of ” We have no solutions, we want no solutions, we only want the status quo” is not about enlightenment and education…

      1. TooManyTaxes Avatar

        The reason I go after ER use and Medicaid expansion is because my local elected Democratic officials have told me in public fora that ER use will go down in Virginia if Medicaid is expanded and that managed care will prevent the Washington and Oregon experiences from repeating. They DON’T make the argument that ER use might go up, but it then will go down. They don’t say when ER use will go down. They only argue it will not go up. They don’t say why Virginia’s managed plan will produce different results than Oregon and Washington. I guess I’m supposed to give them a pass. They make bald statements that are not true. But they want to spend taxpayer dollars, so they get a pass.

        I guess I just don’t see that part of the Constitution that says everyone gets free health care coverage. And if you say “it’s the moral thing to do,” does that allow other people, even those monster conservatives, to bring their moral principles to the public forum.

        The ACA is built of lies tied together with falsehoods. If you like your healthcare plan, you can keep it. The ACA will save premium payers $2500.

        1. larryg Avatar

          TMT – what do you think about the objectivity of a website that does not identify who they are?

          and why do you ignore the Colorado study which contradicts the Oregon study?

          it’s not “free healthcare coverage” guy. It’s very much similar to employer-provided , Medicare and Tricare.

          most folks on Ocare have to pay something. That’s better than having everything paid for by taxpayers. Even the MedicAid is means-tested.

          it’s not like the GOp did not and still has – the ability to propose a competitive alternative.

          How long have we been sending folks to ERs? How long would you expect that to change?

          you can’t beat something – with nothing.

          You guys did nothing – and lost.. you deserved to lose.

          You can still do something.. compromise is still an option.

          but the current strategy is an epic fail.

        2. larryg Avatar

          TMT – the Oregon “study” is people’s opinions. It’s not actual data. Have you actually read it?

  9. larryg Avatar

    re: I-73… anyone traveled Rt 29 from Reidsville to Greensboro?

    maybe there’s a plan but the current route is more like 29 in Charlottesville that 29 north and south of Lynchburg. the area around Lynchburg is also not limited-access..

    They got the easier – cheaper parts done and left the harder parts.. which are not going to be cheap nor fast.

    and still don’t know how that helps Virginia commerce.

  10. larryg Avatar

    In terms of higher Ed and a “centralized” coordination of which schools will specialize – or not… I’m agog.

    Lots of thoughts from more than a few about how stifling Dillion’s Rule is.

    but then we want the same Clown Show in Richmond to decide which schools do Law and which do Engineering?

    oh my.

    I’m not dissing the idea. I’m commenting more on the Jekyll/Hyde dynamics of those who rail against govt-direction then beg for it.

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