Tale of the tape

As Virginians decide whether to go with the known — Democratic former Gov. Terry McAuliffe — or the unknown — first-time candidate Glenn Youngkin, a Republican — Virginia Business checks in with the two major contenders to be the commonwealth’s 74th governor. In exclusive interviews, the candidates lay out their plans to create more jobs, encourage entrepreneurs and expand broadband access to all parts of the state. We also see where they differ philosophically on how to build an environment for flourishing business growth and economic development.

McAuliffe: Economic development, broadband are keys to success

Virginia Business: What would be your top priority as governor?

Gov. Terry McAuliffe: Clearly, the most important issue for me is building a great economy. We’ve made great progress. We got to build a really stronger post-COVID economy.

Last time I [was] in office, with the Great Recession and sequestration, Virginia was too dependent on the federal government outlays and defense spending. We needed to diversify. That’s what I did.   

I was the architect of the new Virginia economy. We retooled workforce development, became a leader in the country on that. We redid all of our schools to better align the workforce gaps to make sure we’re teaching our students the skills they need to meet those jobs of the 21st century.

I leaned in before on this: 200,000 new jobs, 1,100 economic development projects, a record $20 billion of new capital, personal income went up 14%. It worked.

As governor, I’ll continue to travel. We’ll have a great ally with Joe Biden as president now to assist us. The resources, the federal government will be very helpful to us to build this new Virginia economy again and continue to diversify and continue to bring in all those great-paying jobs. I led the nation on our public-private partnerships. We’ll do it again.

I want to make us a leader in clean energy. I was the governor to sign the first offshore wind turbine lease [with the U.S. Bureau of Ocean Energy Management]. We now have two turbines out there.

I want to see us lead the country in building a trained workforce and creating more streamlined pathways from our public schools into our workforce, working with our career and technical [schools], working with our community colleges. 

Working with my wife, [we had] 13 million more school meals served. We led on getting pre-K [education] to tens of thousands of our Virginia students.

There’s over 550,000 Virginians today that actually have health coverage now [through Medicaid] — including 13,000 [cancer patients] today [who] get radiation [treatment] … who would not have had it. That’s a big deal for me. 

I [also] wrote the bid for Amazon [HQ2], submitted it before I left the office.

VB: If the federal infrastructure package passes, what should be the priorities for Virginia?

McAuliffe: Transportation — huge for Virginians. I did $10 billion worth of infrastructure, unlocked Hampton Roads, which had been a mess. [I] canceled [the U.S.] Route 460 [toll road], on which the prior administration had wasted $200 million of our great taxpayer money. I saved the Port of Virginia, [which] lost $120 million [during] the five years before I took office. [It’s] now one of the most successful ports on the East Coast. I did the Atlantic Gateway rail project, added 18 miles to I-95. I did the I-66 Project —
$3.7 billion project, no state money involved — and it will be a game-changer for the folks up here in Northern Virginia.

I think with the infrastructure money, obviously, we have thousands of bridges and roads that are in disrepair. [One priority is] fixing that infrastructure to get us where we need to be to have a world-class transportation system. We need to continue to lean in on the rail capacity here, and [Gov.] Ralph [Northam] has done a great job on that.

We need increased passenger rail, trying to get people out of cars and getting them into [the] Metro, building more bus lanes and issues like that. As I say, we did the Atlantic Gateway, which opens up [the port’s Norfolk International Terminal]. Now they can get their goods out of the port quickly into the breadbasket of America and all over. Our [agriculture] and forestry businesses can thrive here. I’m all about transportation. I did it before. We did some of the most complex deals, and we are a different state today.

I’ve been friends with Joe Biden for 40 years. When he was vice president, he helped me get the largest transportation loan, called TIFIA [Transportation Infrastructure Finance and Innovation Act]. He helped me with the [Port of Virginia]. [Editor’s note: Virginia secured a $1.2 billion TIFIA loan in 2017 for the construction of toll lanes on Interstate 66.]

We [also] unveiled a $25 million cyber-security initiative at our HBCUs [historically black colleges and universities].

I’m very excited to have the president. I love the other 49 states, but I’m going to do everything I can as governor to leverage that relationship to make sure that we are getting a majority of that money right here to Virginia.

VB: How can rural Virginia’s lagging economies — areas previously dependent on coal, tobacco and textiles —catch up with the more prosperous parts of the commonwealth?

McAuliffe: If you read [my] plan, and this is important, I have 18 policy plans — 153 pages as of now — of very serious policy proposals. I have a whole section on raising rural Virginia. When I was governor, I reduced unemployment … from 5.7% [to 2.6%]. We were practically full employment when I left office, and we’ve reduced unemployment in every city and county in Virginia. Nearly every rural county saw a reduction of nearly 50%.

I leaned in. I traveled the globe. I think I was the most-traveled governor in U.S. history in four years: 35 trade missions, five continents, dozens of countries, and [we] brought companies back from all over the globe and many of those [invested in] our rural communities. [Another priority is] continuing to be a great ambassador for Virginia to sell our agriculture and forestry abroad, and to leverage relationships and bring companies here to Virginia. I did it before, I’ll do it again.

In addition, a huge priority for me is broadband. I promise you that within two years, we will get broadband access to everywhere. We have over 300,000 homes today that do not have any broadband access — 14% of our

children did not have broadband access last year.

Think of that during COVID — how really damaging that is for children who are online learning and yet they couldn’t online-learn because they didn’t have any internet capacity. They go to McDonald’s to a Wi-Fi hotspot. That is unfair. The first thing we need to do is get the broadband access all over rural [Virginia], but in addition, of the 14% [who did not have access], 40% were urban. [We need to make] sure that everybody has that broadband access.

I called for raising the teacher pay above the national average for the first time in Virginia history, because today we rank 50th out of 50 states. [Editor’s note: This comes from a 2020 business.org report on average teacher salaries compiled by the National Center for Education Statistics.]

When you compare [teachers’] average pay to the average pay of our citizens, we’re last in the country. It’s really disgraceful for the 10th-wealthiest state in America.

It’s not fair that rural parts of our state have substitute teachers [instead of permanent teachers]. Let’s pay our teachers. Let’s keep the best quality teachers in Virginia, who today are leaving to go to Maryland, Pennsylvania, Delaware because they can … [make] $10,000 to $24,000 more.

In addition, we need to build the infrastructure of our schools. Fifty percent of our schools are 50 years or older. I was just down in Bristol the other day, at Highland View, an [83]-year-old [elementary] school. They have rats, they have bats. They had a fire recently because of the old wiring that they had down there. That’s not fair. They have one bathroom for the entire … school — one stall for teachers, one stall for students. [Editor’s Note: Highland View actually has two bathrooms but McAuliffe is essentially correct, says Bristol Superintendent of Schools Keith Perrigan, noting that the school also has asbestos and air quality problems and isn’t accessible for people with disabilities.]

Education is the main reason I’m running — to rebuild our education system so I can build the greatest workforce in the United States of America. It’s not talk for me. I did it. I brought a record amount of jobs to rural parts of our state, and we can take it to the next level.

VB: CNBC just ranked Virginia as its Top State for Business again.

McAuliffe: We’re No. 1 again, the only state to get it two times in a row. Very, very important for us to continue that pro-business climate that we have here. I was a very pro-business, pro-jobs, socially progressive Democrat, making sure our state’s open and welcoming.

VB: Virginia just legalized marijuana. Do you support that?

McAuliffe: I support it. It’s very important for us. Once we get it up and running, we’re going to see about $330 million added to our economy [annually]. It’ll create tremendous new business opportunities all across the commonwealth. By 2023, businesses are going to be able to apply for licenses, and the retail market should be fully functional by 2024.

This is a whole new avenue, as is casino gaming, which I’m a proponent of. We’re doing great in Virginia. We have five approved [casino] projects. They’re all working their way through their respective approval process. That’s going to generate another $360 million for the commonwealth of Virginia. I’m excited. I’m very bullish. [Editor’s note: Voters passed local referendums allowing casinos in Bristol, Danville, Norfolk and Portsmouth, while Richmond residents are voting on their casino referendum this fall.]

[Northam] just announced a big budget surplus, much different [from] when I went into office. … I do want to thank President Biden [for] the American Rescue Plan, because that has been so helpful to the commonwealth of Virginia. We got $70 million off of that, just for vaccinations. Think of that. We have a million-and-a-half children who have been able to benefit. Seven million Virginians have seen relief checks [totaling] $9 billion.

I was up in Winchester and met with small business leaders. Most of the people in that room told me that, had they not been able to get the rescue fund money, [Paycheck Protection Program loans] and other [support], they would not be in business today. I’m a huge advocate of all of this.

If you thought the last eight years were great in Virginia, which they were, I remind you when I took office, our economy was in a crisis. People were laughing at Virginia because of the anti-women bills that had been passed. We are a different state today. We are poised now with Joe Biden in the White House. This state is going to take off like a booster rocket.

VB: Youngkin has said you’ll repeal Virginia’s right-to-work law if given the opportunity. Is that the case?

McAuliffe: In my four years as governor, I learned that the best way to make progress for Virginians is to focus on where we can get things done and deliver real results, like creating good jobs, expanding access to health care and investing in education. As I say on issue after issue, I support things that can get passed and I am focused on creating good-paying jobs, raising our minimum wage to $15 by 2024, and getting every Virginian access to paid sick days and paid family medical leave. This is the type of progress we need to be focused on, and they will be my priorities as governor.

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Youngkin: Va. needs more jobs, higher wages, site readiness

Virginia Business: What will be your top priority if you’re elected governor?

Youngkin: This is about growth and jobs. This is what it boils down to: growth and jobs. That’s going to require us to fundamentally rethink how we’re growing, how we’re creating jobs, how we’re preparing people to take those jobs.

Career preparation and talent pipeline is critical. In order to facilitate that, we’re going to fundamentally need to make changes in our business environment. That’s going to enable what we need to get done.

Over the course of the last eight years under [Govs.] Terry McAuliffe and Ralph Northam, Virginia’s economy has just stalled out. Real GDP in the commonwealth of Virginia has been outpaced over the last eight years by Maryland, Tennessee, North Carolina, South Carolina and Georgia — states we compete against head-on. Just those states we compete directly with for companies and for families, Virginia’s GDP has grown 70% slower.

Over that same eight-year period, we’ve had net-zero job growth. We’re 33rd in the country on job growth. As we’ve come out of this pandemic, we’re 45th in job recovery. [Editor’s note: As of August, Virginia ranked 34th in job growth for the previous 12 months, according to Bureau of Labor Statistics data. And Virginia ranked 49th in percentage of jobs recovered, having regained 55% of jobs lost since the pandemic began. However, the state’s unemployment rate in August was 4%, significantly below the national rate of 5.2%.]

All of that actually points to opportunity. Opportunity is voted on every day by Virginians. What’s happened again, over the same eight-year time period, is we’ve watched people vote with their feet; 600,000 Virginians have moved [to] these competitor states. The sad thing is, the biggest group are people between the ages of 26 and 35, people who are really starting life. [Editor’s note: Demographers with the Weldon Cooper Center for Public Service at the University of Virginia cite affordable housing and job opportunities as top factors for out-migration.]

The net of this is that we’ve got to get moving. We’ve got to find growth, we’ve got to create jobs, and we have to create opportunity, so that people stay here as opposed to moving away. That’s the framing of where we stand right now. It’s not a pleasant thing to actually identify, but [I] spent my whole career actually studying things like this. This is the performance of Virginia, the scorecard of Virginia.

The highest priority that we have when it comes to economic topics has to be reenergizing growth, reinvigorating the job machine, and restoring opportunity for folks by getting trained and prepared to take these jobs.

I want Virginia to win. Virginia hasn’t been winning over the last eight years, and it’s time for Virginia to win again.

VB: CNBC just named Virginia its Top State for Business again. What would you change?

Youngkin: Let me just comment on the CNBC ranking. I am thrilled to death that Virginia gets accolades. I am a proud, proud Virginian, and I want Virginia to get accolades. Unfortunately, Virginia isn’t performing like the No. 1 state to do business in. It’s not. In fact, some of the underpinnings to that ranking actually shine a bright light on the challenge as why we’re not performing. The cost of living in Virginia — gosh, we’re ranked 32nd, and the cost of doing business, where we’re ranked 26th, and the quality of our infrastructure, where we’re ranked 24th. [Editor’s note: These rankings come from CNBC’s 2021 Top States for Business report.]

We get ranked really highly on the quality of our higher education. That’s great, because we have great colleges, but unfortunately, they’re not accessible and affordable [for] Virginians.

We absolutely have to get our business environment and our business-friendly quotient moving in a completely different direction. Right-to-work is critical to Virginia’s future. Critical. In fact, in business-friendly rankings, it is the No. 1 [criterion] in business-friendly rankings.

The first thing we have to do is preserve [Virginia’s] right-to-work [law]. The second thing we have to do is, we have to get the cost of business down. The way we’re going to get cost of business down is we got to carve back the amount of red tape that’s been piled on businesses.

I was just speaking with the owner of a small business. She told me she spends between two and three hours a day filling out paperwork for Virginia. A day. This is just almost debilitating for small businesses right now. We’ve got to carve back the regulatory burden that’s been placed on so many businesses. It doesn’t mean we’re going to let them do anything they want. It’s just become so cumbersome, that they can’t even do their business.

The second thing we have to do is increase the cycle time for [permitting]. The cycle time to get a permit is so long today in order to build something. We actually have to have set timeframes, and we absolutely have to give people clear criteria, because we know that when there’s an extended permitting process, we’re not going to get things done. 

Third, we have to create sites across Virginia that are ready for businesses to develop, and we do not have any Tier 4,
Tier 5 sites that are shovel-ready for businesses to get going. [Editor’s note: While Virginia has a few dozen shovel-ready, Tier 4 or Tier 5 industrial sites, only a few are large enough for 500-acre or larger mega-projects, and those sites would require additional infrastructure to accommodate such projects, according to the Virginia Economic Development Partnership.] 

I recommended that we include up to $200 million out of the American Rescue Plan money to be put forth to site readiness across Virginia so that companies can move here.

Finally, we have to change Virginia’s culture into an innovation state. New business formation, new business starts in Virginia have basically been zero, and Virginia was ranked 49th in the country [for] best place to start a business. [Editor’s note: This ranking comes from The Blueprint’s January 2021 ranking of best places to start a new small business.]

We don’t have any innovation going on, and we know that in order to have robust job growth and economic development, you have to have new business starts, and you have to be viewed as a good place to innovate and start a company.

That’s a very succinct list of things we’ve got to go get done, and that’s what I’m going to be really focused on in order to fundamentally change our business environment. There [are] some short-term things we have to do. I called for a 12-month tax holiday for small businesses that have less than $250,000 in net income. Those businesses deserve a chance to get back on their feet as we come out of this pandemic, because they need to get going.

VB: Does Virginia strike the right balance between workers and businesses? Do you support the recent changes to minimum wage and overtime laws?

Youngkin: They’ve been passed, they’re in place, and we’re going to grow an economy to support it. Sometimes I’m a little more practical than philosophical. One of my goals, in fact, is to get Virginia’s economy growing at a pace that will support job growth and wages that in fact will lift up all Virginians.

Quick side note: I don’t believe that minimum wage is lifetime maximum wage. I think it’s a place to start. Therefore, we want to build an economy that in fact has economic growth … [that’s] 2.5% to 3% [growth] vs. the 1.2% that we’ve seen under Terry McAuliffe and Ralph Northam. That’s real GDP growth, and we’ve got to get moving at least twice the pace we’ve had.

When I’m governor and we get this economy moving at 2.5% to 3%, we’re going to create 400,000 jobs during that period, not 175,000. By the way, we have a stretch target to create 500,000 jobs. We’re going to have 10,000 new businesses that get started. We’re going to reinvigorate Virginia as a great place to start a business and to innovate. That will create opportunities across Virginia and lift up all Virginians, not for minimum wage jobs only, but for all jobs.

VB: If the federal infrastructure package passes, what would be your priorities for Virginia?

Youngkin: Our infrastructure, again by CNBC’s poll, was ranked 24th in the country, and we must be at least [in the] top 15. Given the natural infrastructure that gives us such an advantage with the Port [of Virginia] in Hampton Roads, with our highway infrastructure, our location, we should absolutely be a top player with infrastructure offerings to business and to Virginians.

First place that we need to invest in is high-speed internet access for rural Virginia. I agree with the Northam administration: $700 million is a good number to invest in order to get that done, but I think their pace is way too slow. Terry McAuliffe was talking about broadband internet access when he was running for governor in 2009, and then when he was actually elected governor in 2013, he didn’t get it done.

We actually have to finish all the work around our port. In fact, there’s some final dredging that needs to get done in order to get it to the right depths.

I think one of the great opportunities is to invest in our highway system. Yes, we are finishing up the [Hampton Roads Bridge-Tunnel] expansion … and there’s a widening on [Interstate] 64. We need to finish that widening all the way up into Richmond, but there is a tremendous opportunity for us to invest in [U.S. Route] 58. We can create along Highway 58 an industrial and logistics center because it connects right into the port. It connects to all of our major interstates, and it actually runs through incredibly available space for economic development.

Finally, I do think we need to invest in our airports. We need to expand cargo capacity in Dulles, and we need to invest in flights and connectivity in our other airports around Virginia.

VB: Do you think Donald Trump won the 2020 election, and how does this affect your ability to work with the White House?

Youngkin: I have absolutely been clear that Joe Biden was legitimately elected our president.

VB: How can lagging economies in rural Virginia catch up to our more prosperous metro areas?

Youngkin: Through focus [and] a governor who understands how to get things done and keeps his promises.

With Southwest Virginia, there [are] some incredible opportunities. The enabler is high-speed broadband internet. We have to get that done. We’ve got to get it done fast, but then you begin to look across industries that should — and will in fact — have a great footprint in these areas vs. logistics. We should absolutely have logistics hubs that are connected via road and rail.

Second is manufacturing. When we invest in site development and have 500-acre Tier 4 sites available, then big manufacturing will come. We [also] have to maintain our right- to-work status. We have to get our cost of doing business down.

Finally, there’s no reason why we shouldn’t be drawing into Virginia agricultural processing opportunities. In the meat processing business, in the dairy milk processing business, in lumber.

There are real opportunities for us to press forward in Southwest Virginia and Southside Virginia around sectors that we can attract and build. We must prepare our workforce for these opportunities as well. Today, we’ve seen the sad reality that across Virginia we’ve lost our focus on career and technical education.   

I think it’s important to point out the discrepancy in our education system right now. All but one Virginia university offers sociology degrees, and only two offer systems engineering degrees. We’ve got to rethink how we’re preparing people to take these jobs of the future that are going to present themselves. This is an opportunity for us to rethink our K-12 education and also higher education.  

Related: The 2021 Virginia gubernatorial race is on!