Virginia’s Economy Ranks 3rd in the U.S.

by Charles Couch
Capital News Service

Despite a long recession, Virginia ranks among the top five states with the best economic climates, according to a national lobbying organization.

Virginia placed third in the 2012 “Rich States, Poor States” report – a survey conducted annually by the American Legislative Exchange Council. ALEC lobbies for free market and limited government policies at the state and national level.

“Too many times we talk about how states are on a decline and how states are suffering since the Great Recession hit,” said Jonathan Williams, ALEC’s director of tax and fiscal policy and co-author of the report. “But I think states like Virginia provide states across the country with a great example that states can do great even in the midst of an economic downturn.”

The report ranked Utah first, South Dakota second and Virginia third. Williams said the “Rich States, Poor States” rankings were based 15 equally weighted factors including:

  • Individual and corporate income tax rates
  • Property and sales tax burdens
  • Whether the state has an estate or inheritance tax
  • The government’s debt service as a share of tax revenue
  • Public employees per 1,000 residents
  • Workers’ compensation costs
  • The state’s minimum wage
  • Whether the state is a “right to work” state

“It’s because of Virginia’s tried and true approach to fiscal, conservative ideals of low taxes, limited government and individual liberty that has kept Virginia in the top tier of states,” Williams said during a press conference last week at the Virginia Capitol.

Barry DuVal, president of the Virginia Chamber of Commerce, said four major factors in have helped Virginia maintain economic stability.

First, he said, Virginia’s transportation system extends both nationally and internationally thanks to the Richmond International Airport and the Hampton Roads harbor. “Both assets allow us to move products and people very efficiently around the world,” DuVal said.

The second factor is the state’s workforce, which DuVal said “is second to none, and it can compete at manufacturing. It can compete with service and financial industry. It can compete in any industry, and it’s recognized around the world.”

The third factor is Virginia’s “intellectual capacity,” which allows the state to compete in a “knowledge-based economy,” DuVal said.

The fourth factor, he said, is public officials who support the business environment.

DuVal said other states may invest in education or transportation. “But those states don’t compete with Virginia because they don’t have what we’re being recognized for here today, and that is pro-business legislators and pro-business governors that actually impact the climate in which business is done.”

Not everyone agrees.

A liberal citizens’ group, ProgressVA, has blasted the partnership between ALEC and state legislators, saying the council promotes tax breaks for the wealthiest citizens and cuts to high-paying middle class jobs.

During the “Rich States, Poor States” press conference, ProgressVA Executive Director Anna Scholl distributed a news release saying that seven major entities – Pepsi, Coca-Cola, Kraft Foods, Intuit, McDonald’s, Wendy’s and the Bill and Melinda Gates Foundation – recently terminated their ALEC memberships.

The corporations did so because of ALEC’s support of “ ‘Kill at Will’ laws like the one at the center of the Trayvon Martin shooting,” the press release said.

“These rankings are nothing more than a report card for ALEC’s anti-middle-class agenda,” Scholl said. “Now even corporate members are backing away from ALEC’s agenda of low minimum wages, fewer high-paying jobs and millionaires not paying their fair share.”

Virginia House Speaker William Howell, a member of ALEC’s board of directors, criticized ProgressVA and similar groups, such as the Occupy Movement. He said they have been making attacks on ALEC for the past six months.

“I think that’s just a reflection of the fact that ALEC has been quite successful,” Howell said at the news conference. “ALEC does a good job of promoting free market exchange all throughout the country.”

In contrast to ALEC’s ideology, Howell said, ProgressVA and other critics want a government-monitored economy. According to Howell, these groups’ threat of boycotts has led some corporations to drop their ALEC memberships.

“ALEC is going to continue to survive,” Howell said. “The charges that are being made against the organization, I think, are completely frivolous.”

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