As the Virginia General Assembly prepares to return for a Special Session on Aug. 2 to appropriate American Rescue Plan funds made available to the Commonwealth, we learned that Virginia will also enter the new fiscal year with a substantial surplus in state revenue.
Some of that excess revenue is required to be put set aside in our rainy day and other reserve funds under the Virginia Constitution, and some of it will be available to spend on non-recurring items in the upcoming year.
The Virginia economy is recovering well from the pandemic as vaccination rates continue to climb. Nevertheless, the recovery is uneven, and we will need these one-time funds to ensure our state social safety net is there for our neighbors who won’t be able to bounce back as quickly or suffered more significant hardships during the pandemic.
Given the generally rosy budget outlook, we probably shouldn’t have been surprised that Virginia maintained its rating as the number one state to do business according to CNBC’s long running state business rankings. Virginia is the first state to win the title “Top State for Business” twice in a row (CNBC didn’t issue rankings in 2020 because of the pandemic).
Virginia has ranked #1 five times since the rankings began in 2007– more than any other state.
Now, I haven’t always been one to tout Virginia’s ranking for business friendliness as the most important metric for determining the relative success of state government. To the extent these rankings have, historically, rewarded states with low wages, lots of corporate giveaways, anti-worker policies, weak environmental policies, and limited legal options for consumers, you almost want to be suspicious of states that rank too high.
Since the last set of rankings came out, though, Virginia passed the Clean Economy Act, raised the minimum wage, kicked car-title and payday lenders out of the Commonwealth, gave unions more rights to bargain collectively, passed the Virginia Values Act which includes employee protections from all sorts of discrimination, and made it easier for workers to sue their employers for things like worker misclassification.
So how are we still #1? Let’s dig in a little behind the numbers.
CNBC’s rankings included 85 distinct metrics across 10 competitiveness categories. Some of them are what you’d probably expect: cost of doing business, infrastructure, workforce, access to capital, cost of living, etc.
This year, though, they added some new criteria to reflect what businesses in 2021 care about.
Earlier this week many of us tuned in to watch Major League Baseball’s Home Run Derby and All Star game live from…Denver, Colorado. Seem like a non-sequitur?
All Star Week was originally scheduled for Atlanta, Georgia this year. The MLB pulled out of Georgia earlier this year when players and other stakeholders protested over Georgia’s passing restrictive voting laws.
In announcing their rankings, CNBC made a point of highlighting Virginia’s education system, which helps us to attract and retain an exceptionally talented workforce, and commitment to equity and inclusion. Clearly that was our number one attribute.
They also noted that companies, like Major League Baseball teams, are increasingly vocal in their demands for inclusiveness in the states where they do business, leading to an increase in the importance of this in CNBC’s 2021 competitiveness study, as well as adding metrics on diversity, sustainability, and connectivity.
So, we were able to stay ahead of other states even in a pandemic not only because of our competitive business climate, but also because of progressive legislation that we’ve enacted over the past few years. We’re the first southern state to enact a Voting Rights Act to expand voting rights and access to the polls as well as the Virginia Values Act that ensures comprehensive anti-discrimination laws protect the LGBTQ+ community.
And we didn’t stop there.
We invested in public education and workforce development so that Virginia businesses can recruit workers in Virginia. Since Governor Northam took office, nearly 90,000 new jobs have been created and we’ve invested over $45 billion.