by James A. Bacon
Virginia’s economy has grown at a sluggish 0.9% compounded annual rate of growth over the past eight years, says Governor-elect Glenn Youngkin, and he wants to get it “really cranked up” to a normalized rate of 2.5%. To accomplish that goal, he tells Virginia Business magazine, he proposes to do three things: (1) cut taxes, (2) bring down the cost of living, and (3) cut regulations.
In practical terms, that includes not shutting down the economy with COVID-19 lockdowns and shutdowns. It means keeping schools open. And it means no vaccine mandates.
Says Youngkin: “Executive orders that mandate that state employees have to get a vaccine and wear a mask, or an executive order that makes children [in] K-12 have to wear a mask — we’ll work with [the new commissioner of health and new Board of Health] to rescind that.”
While Youngkin says he wants to provide tax relief to Virginians, he does not sound like a small-government conservative. Citing the link between K-12 education and workforce development, he touts his plans for “the largest education budget in the history of Virginia” — more money for teacher salaries, for school facilities, and funding of special education programs. The governor-elect also wants to expand mental health programs, high-speed internet access across Virginia, and spending on law enforcement.
Other than the tax cuts, Youngkin’s spending priorities do not differ much from those of outgoing Governor Ralph Northam. But the tone of the incoming administration will be dramatically different. While Northam’s dour social-justice rhetoric emphasized statistical disparities, racial injustice, and racial inequality, Youngkin has embraced a rhetoric of opportunity and improvement. Better jobs for all. Lower taxes and cost of living for all. Higher educational standards for all.
Taxes and Cost of living. “One of the big issues we see in Virginia today is we’ve watched the cost of living really escalate in a runaway fashion,” says Youngkin. “We’re now above the national average, and Virginians are moving away faster than they’re moving here from the other 49 states.”
Youngkin is the first Virginia governor, to my recollection, to focus on the cost of living in his economic-development strategy. It is not clear what data he is drawing from to support his statement about the runaway cost of living, but according to Council for Community and Economic Research data, Arlington has the 5th-highest cost of living of any city in America (although technically Arlington is a county), and Alexandria the eighth highest. The cost of housing in both localities is among the highest in the nation.
In his remarks to Virginia Business, Youngkin does not address housing, the cost of which is heavily influenced by scarcity-creating zoning policies, or energy, the cost of which is driven by the Northam administration’s zero-carbon goals. Rather, he ticks off cost-of-living components affected by taxes. He wants to eliminate the sales tax on groceries, double the standard deduction on the state income tax, and shelter up to $40,000 in veterans’ retirement income. “We’re watching just massive over-taxation of Virginians. We’ve got to be more competitive with the states around us.”
Regulations. Youngkin speaks in generalities about “cutting back the regulatory framework” that is crimping business but provides few details in the interview other than holding the line on COVID restrictions.
“I will declare Virginia open for business, and make it very clear that we’re not going to have lockdowns and shutdowns,” he says. “That’s incredibly important, because no business is going to invest in new facilities and new manufacturing and hiring new employees if they think it’s going to get closed down next week.”
He continues: “There [are] three big principles that I strongly believe in: No. 1, that the vaccine is the best way to keep yourself safe. I’ve gotten the vaccine, my family has gotten the vaccine, but I do not believe that government should mandate that everyone should get the vaccine. Second, I do not believe people should get fired for not getting the vaccine. We can absolutely use other procedures and protocols to keep people safe besides mandating the vaccine.”
Schools. Youngkin does not mention “critical race theory” or “diversity, equity & inclusion” in the interview, but he clearly intends to target a baleful consequence of CRT-inspired educational policy: the erosion of educational standards in the name of “equity.”
“We’ve got to re-establish expectations of excellence in our schools,” he says. “That’s going to start with re-establishing high standards in our schools and then funding … the largest education budget in the history of Virginia.” Schools need more than money, though. Youngkin hints at fundamental changes. “We’re going to have a curriculum that stretches our children. It’s not a watered-down curriculum.”
Youngkin also intends to “push forward aggressively” with a new charter school program. “School choice in our public schools has to be a giant element of K-12 education going forward.” He provides no hint, however, about how he plans to create more chartered schools. Virginia law gives local school districts, not state government, the power to approve or deny charters.
Corporate investment. Virginia has the lowest labor-participation rate since records have been kept but is not in the running for many big economic-development opportunities, Youngkin says. “Even with some of the brand-name wins, we are trailing miserably versus our peer states…. We are not competing. Tennessee, North Carolina, South Carolina, Georgia, Florida, Texas [and] even Maryland are competing substantially better than we are.”
What is to be done? Youngkin does not talk about increasing “incentives,” which give other states much of their competitive advantage. Rather than shower favors on individual corporations, he thinks in terms of reducing the cost of living (which affects the ability to recruit and retain workers), cutting the cost of business, cutting taxes, and cutting regulations.
Bacon’s bottom line. Youngkin’s priorities don’t represent a radical departure from the conventional wisdom, but I see two important changes. One is the focus on cost of living, which directly impacts quality of life. That shift in perspective has promise. But to make good, Youngkin must grapple with the stratospheric cost of housing, which he has not yet indicated he will do, and he must tackle the rising cost of electricity and energy, a topic that goes unaddressed in this interview.
The most important change is the shift in rhetoric. Flagellating ourselves for past racial sins, as we have done for four years now, does nothing to help Virginians improve their lives. By contrast, creating better jobs and educational pathways to qualify for those jobs opens up opportunities for all.
The change in rhetoric also makes Virginia a more enticing place to do business. Who would want to invest in a state run by social-justice ideologues whose greatest selling point is, “Hey, we’re not as racist as we used to be”? Youngkin offers a forward-looking and optimistic vision of shared prosperity for all.
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