Diversifying Downward

By

June 26, 2014

Whether Republican or Democrat, it has been an annual rite for the Governor to trumpet Virginia’s ranking as one of the top states for business in America. There are press releases and a flurry of television and radio interviews showing how the Virginia way works best. It is a potent weapon used to lure businesses to Virginia rather than Maryland, Washington D.C., West Virginia or North Carolina. Our elected political leaders bask in the glory of the Commonwealth’s AAA bond rating and cite the exceptional quality of life available to its citizens.

Earlier this week, CNBC listed its top states for business. Its report was generally greeted by silence from the McAuliffe administration. There were no celebratory press releases, no national interviews and the few comments were terse excuses to press inquiries. Perhaps the Governor did not want to commemorate the Old Dominion’s fall to a tie for number eight on the list of best states to do business. Maybe he was concerned that our neighbor to the South, North Carolina, has passed the Commonwealth in the rankings. I know it is hard to believe, but is it possible that Governor McAuliffe is embarrassed that in six short months of his leadership, Virginia’s business climate has deteriorated?

Governor McAuliffe has started using the phrase “diversifying Virginia’s economy” as the focus of the administration. This ties into his excuse for Virginia’s ranking decline, that the Commonwealth’s economy is too closely linked to the Federal government. While blaming Virginia’s ranking on the federal government is a good sound bite, we need to remember that federal spending continues to increase, albeit at a slower pace. Just wait, Governor McAuliffe will almost certainly blame the rankings on the Commonwealth’s failure to expand Medicaid.

A more plausible explanation for our ranking decline seems obvious. The McAuliffe administration is seeking to expand government by committing Virginia to the long-term costs of Medicaid expansion that will almost certainly break the budget. He and the Attorney General seem to be almost singularly focused on creating a liberal utopia of same sex marriage and abortion on demand. And let’s not forget that Governor McAuliffe’s administration sent cease and desist orders to Uber and Lyft ride sharing programs, which clearly signals that Virginia is closed to business innovation.

Over-regulation, bloated government and a liberal social utopia sounds like a northeastern state. If Governor McAuliffe wishes to govern as if he were the Governor of Massachusetts, Maryland, or Vermont, then he shouldn’t be surprised when our business ranking heads in the direction of those states.

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