Republican gubernatorial candidate Glenn Youngkin campaigns in Richmond. (Ned Oliver/Virginia Mercury)
Glenn Youngkin, Virginia’s soon-to-be-inaugurated governor, made hay out of several campaign slogans that propelled him to an upset victory in November. The Republican political novice, for instance, often stated he would slash 25 percent of “job-killing regulations” on day one after he takes the oath of office Jan. 15.
There was Youngkin last week, proclaiming to business leaders in Richmond yet again his desire to turbocharge job growth in the commonwealth. Youngkin, a former executive at a private equity firm, said he will implement policies to “start winning big time” in the quest to lure businesses to the state. (It’s reminiscent of a certain Orange-Faced Man’s use of the word “bigly,” but I digress.)
There’s also the nuisance of a General Assembly to contend with, in spite of the grand plans. The Democratic-controlled Senate could throw up roadblocks if legislation is required.
Meanwhile, Youngkin just told a Harrisonburg TV station the state is losing out on commerce “like recent battery plants that have been placed in Kentucky, Tennessee, North Carolina, and Georgia.”
“I want to provide all kinds of opportunities for Virginians,” the governor-elect said. “We’ve got a lot of work to do.”
Really? To borrow a sports metaphor, I hope Youngkin isn’t getting too far over his skis.
You can’t begrudge Youngkin’s desire to take a victory lap in a contest where he overcame long odds. In fact, it often sounds like he’s still running against the hapless Terry McAuliffe, a Democrat.
Now, though, the time for campaigning ends; governance begins. There’s a difference. What are the actual policies?
Youngkin has declined to say just which regulations he plans to chop, or what might be sacrificed with any changes. When I asked Macaulay Porter, a Youngkin spokesperson, about the issue, she cited comments the governor-elect made Wednesday to the Hampton Roads Chamber.
“We need to have a different approach to regulation,” Youngkin said. “On Day One of my administration, we will begin slashing 25 percent of regulations, so employers face fewer obstacles to starting, investing in, and growing a business.
“Where permitting and licensing regulations must remain, decisions need to be accelerated – not at the speed of government, but at the speed of business.”
True, Virginia is near the very bottom of the states for starting a small business, according to one ranking by the Blueprint, which is linked to The Motley Fool financial service.
An impartial observer, though, would note many businesses already receive red-carpet treatment in the state. Would tipping the scales further do more harm to average Virginians?
The commonwealth has long been considered, by the economists and researchers who study these things, a well-managed, business-friendly state – often to the detriment of the workforce. The picture Youngkin paints seems 180 degrees from reality, suggesting a climate that’s much worse for companies considering relocation:
• Amazon, the worldwide behemoth, in 2018 selected Northern Virginia as one of two winners for a new headquarters. It initially received nearly 250 bids. Amazon broke ground in Arlington last year. Yes, the state incentives were lucrative, but Amazon’s selection was a huge win, with an estimated $2.5 billion investment from Jeff Bezos’ baby. It should eventually create 25,000 high-paying jobs. Northern Virginia satisfied Amazon’s criteria, including a highly educated labor pool, proximity to a major population center and a strong university system.
• CNBC has consistently ranked the commonwealth among the best states for business. It was No. 1 this year and in 2019 (CNBC skipped rankings in 2020 because of the pandemic). “Virginia pulls off the repeat performance despite a vastly altered competitive landscape, a testament to the resilience of the state’s business climate,” CNBC.com reported.
• The Virginia Economic Development Partnership, obviously a booster, says the commonwealth already offers “incentives for competitive projects evaluating a Virginia location, providing financial inducements that make good fiscal sense for all parties.” It further notes Virginia “offers stable, low-tax costs for companies, including the benefits of no franchise or net-worth tax, a modest sales tax with a broad range of exemptions, and a 6 percent corporate income tax rate, which has not changed since 1972.”
• The state, in a three-year pilot project the General Assembly passed in 2018, already had been reducing regulations in the departments of Professional and Occupational Regulation and Criminal Justice Services. DPOR covers businesses like contractors, barbers and cosmetologists, and real estate appraisers. “I felt there were a lot of barriers to entry,” Del. Kirk Cox, R-Colonial Heights, told me Wednesday. He was speaker of the House at the time the legislation passed, and he and Gov. Northam lauded the bipartisan agreement. Cox said the project could provide a template for other agencies.
So you might wonder whether the state needs to eliminate even more rules. People who care about the safety of employees, the cleanliness of the air and water and fair pay naturally raise their antennae if you’re considering less oversight.
Vinod Agarwal is a business professor at Old Dominion University and deputy director of its Dragas Center for Economic Analysis and Policy. He told me Wednesday it’s customary for new governors to hammer the need to attract businesses and create jobs.
Streamlining rules is usually a smart thing to do, Agarwal said. But the regulations being considered “will determine whether it is good,” he added.
“There can be some regulations not good for businesses,” the professor said, “but are good for the public and employees.”
Not all requirements are equal, obviously. They should be weighed against what – by most measures – is a prosperous landscape for the business community in Virginia.
I’m sure Youngkin doesn’t want to punt on one of his signature promises during the gubernatorial campaign. But he shouldn’t let an oft-cited pledge supplant common sense and smart policy.
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