“Let’s get the extra large with everything!”
“We can’t afford everything. Just pick two toppings.”
“OK, three then, but no more.”
“I want sausage.”
“I don’t. I’m vegan.”
“Well, you can pick yours off.”
“I don’t even want them touching.”
“Pineapple doesn’t belong on pizza!”
“I don’t think I want pizza. I want a sub.”
Anyone who’s ever tried to get a group of people to agree on what should go on a pizza has some understanding of what it’s like to put together a state budget. Just try getting 140 legislators – or even 14 budget negotiators – to agree on something when they’re divided into two rival camps. And that’s just counting party affiliation; there are also regional interests and other interests at play. All those people complaining about how long it took to produce a budget can fix that problem next year by electing a House and Senate from the same party – and even that isn’t a guarantee.
In any case, we now have a budget that legislators will vote on today. As you might expect when you have a Republican House working with a Democratic Senate, it’s a compromise, which means not everyone got everything they wanted. Republicans who wanted a full repeal of the state taxes on groceries – led by Del. Joe McNamara, R-Roanoke County, and Gov. Glenn Youngkin – will have to settle for a partial repeal. (Here’s where I must dutifully point out that the repeal of that tax used to be a Democratic issue, back in the days of Henry Howell. Funny how things change.) Democrats conceded on a Republican push to raise the standard deduction; Republicans conceded to Democrats on making part of the earned income tax credit refundable for low-income families. That’s how compromises work. You can find plenty to like here and plenty not to like. Deal with it and hope that the 2023 elections go your way.
This budget also includes at least $450 million in direct grants for school construction, with $1.25 billion in total spending, which is said to be capable of leveraging up to $3.2 billion in construction. That’s a major victory for those from both parties who pushed state funding – in our part of the state, that was Del. Israel O’Quinn, R-Washington County – and a major concession from those in both parties who felt that should be purely a local responsibility. Should there be more? Sure. The state has estimated that school construction needs at least $25 billion, and that falls most heavily on the localities least able to afford them, especially rural localities. (We’ve highlighted the leaky roof in Prince Edward County.) But at least this establishes a precedent, which might help make more funding possible in the future. Ideally, state Sen. Bill Stanley, R-Franklin County, follows through on his vow to bring back his proposal for an advisory referendum on a $4 billion bond package.
Back in February, when each chamber produced its own budget, I identified 12 things that would be transformative for Southwest and Southside. To my amazement, at least 10 of those 12 things got funded – including all of the really major ones. This seems historic. Someday we may look back at this budget as the ignition switch for some major economic transformations. For instance:
- The Central Virginia Training Center site in Amherst County. The 350-acre site with a long, sad, tortured history has sat vacant since the center closed two years ago. “Blighted” is a word that often gets used to describe the property. “Opportunity” is another. The site overlooks downtown Lynchburg across the James River and finding a new use for it has been a top priority for the Lynchburg Regional Business Alliance. The catch: The state still owes on the bonds – I’ve seen figures ranging from $18 million to $25 million. State Sen. Steve Newman, R-Bedford County, has pushed for money to “defease” (such a great word) those bonds – and has now gotten it. This budget includes $25 million. To say this is a big deal is to understate the word “big.” This is huge. This is beyond huge. The word transformative is not too small. Lynchburg will no longer have this creepy old ghost of a site looming over its rejuvenated downtown. It helped that there’s plenty of money sloshing around Richmond right now, and that Newman was one of the budget negotiators, but securing this amount of money was, by no means, an easy feat. Local officials should give Newman a parade.
2. Life sciences labs in Roanoke. I’ve written before about how Roanoke (with some help from the New River Valley) is growing a cluster of life sciences businesses, built around the Virginia Tech Carilion School of Medicine and the Fralin Biomedical Research Institute. That institute now draws about $180 million in research funding, more than all of Roanoke’s official peer cities put together. This money will help accelerate that by helping remodel a building on Roanoke’s Jefferson Street – midway between downtown and the biomedical complex, part of the city’s so-called “Innovation Corridor” – for labs for start-up companies. Why is this a big deal? Lab space is at a premium. At a conference last month in Roanoke, John Newby, the CEO of the Virginia Biotechnology Association, said that 98% of all lab space in the “biotech corridor” in neighboring Maryland is already taken. “That’s an opportunity for Virginia,” he said. In other words, the “Field of Dreams” principle seems to apply. If you build it, they will come. “We can attract a lot of companies by investing a modest amount of money in lab space,” he said. This will do that. This was also a bipartisan effort of the entire Roanoke and New River Valley legislative delegation.. Want to know more about this? Read what Cardinal’s Megan Schnabel reports today about the project.
3. Truck research in the New River Valley. The New River Valley is growing a cluster of transportation-related businesses. The biggest – but by no means the only – is the Volvo truck plant in Pulaski County. The trucks of the future will be electric and Volvo has already secured a contract to start producing those. Meanwhile, a coalition led by Virginia Tech is in the running for a $75 million federal grant to accelerate growth of this cluster. This $2.5 million for Tech “to partner with local industries including Volvo Truck, Mack Truck, Torc Robotics (Daimler) and their suppliers to create a unique, world-class future truck research and development center in Southwest Virginia” is intended to help that application.
4. Wind energy supply chain. Dominion Energy is developing offshore wind off the coast of Virginia. (The usual disclosure applies: Dominion is one of our donors, but donors have no say in news decisions. See our policy. You can be a donor and have no say, as well.) The budget includes $2.5 million to help jump-start a Virginia-based supply chain for that offshore wind. Why does this matter to us? Because the InvestSWVA economic development group has targeted the wind energy industry, hoping to get a piece of that supply chain for Southwest Virginia. This indirectly helps that initiative. Somebody will get those jobs. A study commissioned by InvestSWVA identified companies already in Southwest Virginia that are positioned to do some of the work. This seems pretty smart and forward-looking to me.
5. Inland ports. Maybe someday we won’t have to explain what an inland port is but that today is not today. Inland ports are inland facilities where outgoing freight is collected, assembled on trains and shipped to the port, with the idea that it speeds up things on the coast, which helps relieve congestion by creating faster turn-around times for ships. On the import side, inland ports do the same thing in reverse: Cargo can be unloaded onto special trains, with a lot of the paperwork handled at the inland port. Virginia already has one inland port, at Front Royal, and it’s helped create about 6,000 jobs in the region. Distribution centers. Trucking companies. Other states already have inland ports and are building more. Even Winnipeg, out on the Canadian prairie, is building an inland port in a bid to funnel traffic out of the American Midwest and ship to either Vancouver on the west coast or Montreal on the St. Lawrence River. The budget includes $200,000 for a study of another inland port in Virginia. This began as a proposal simply to study Region 2000 around Lynchburg – Amherst County, Appomattox County, Bedford County, Campbell County and Lynchburg. Then it was expanded to include Bristol. The final version also adds in the entire Mount Rogers Planning District, so, working north, Bristol, Washington County, Smyth County, Wythe County, Bland County and then Carroll County, Grayson County and Galax. What catches my eye there is Wythe County, where Interstates 81 and 77 intersect. When then-state Sen. Frank Wagner of Virginia Beach was running for the Republican nomination for governor in 2017, he talked a lot about how Wythe County had failed to capitalize on having this intersection. I suspect Wagner would say an inland port in Wythe County would be a grand thing. Inland ports depend on having dedicated rail traffic. Would an inland port anywhere between Wytheville and Bristol help or hurt those who want to see passenger rail extended to Bristol? It could hurt because railroads prioritize freight over passenger trains – they seem to barely tolerate Amtrak – and this would add more freight trains to work around. On the other hand, maybe it helps because I can see the negotiations now: OK, you want all this extra freight traffic from an inland port? You have to let the passenger train through. Based on Virginia’s experience in Front Royal, wherever a second inland port might go, 6,000 or so jobs might follow. That’s a big deal.
6. Site development. This is boring but big. We have a fresh example of what the lack of site development does: That was apparently one of the factors that led Hyundai to pick a site near Savannah, Georgia, over the Southern Virginia Mega Site at Berry Hill in Pittsylvania County for an electric vehicle battery plant that will employ 8,100 people. The Georgia site was more graded and Hyundai cited “speed-to-market” as one of the deciding factors. Virginia has been running behind on site development. It’s been spending about $5 million a year – Georgia $66 million, North Carolina $80 million. This budget allocates $54.5 million a year for two years – so $109 million, with the possibility of going up to $159 million if revenues allow.
Those are the big six. If you’re thinking in baseball terms, that’s 6 for 6, which is a pretty good batting average. Among the other six transformative items I mentioned, at least four got funded. One of those is “talent pathways” – lingo for attracting and developing a future workforce. (I had an earlier column on why we’re seeing a worker shortage; this is intended to address that.) This is also a big deal; the only reason I don’t list it here as a “big six” is that it can’t be tied to a specific location the way the others above can. Danville Community College gets an aviation maintenance program (which ties in with the aviation program at Averett University). Southwest Virginia planning commissions get money for economic development work. The $125,000 for the wine board to study “developing vinifera-style wine grapes adapted to the Mid-Atlantic region” seems a niche interest but could someday help jump-start a wine industry in former tobacco-growing counties. The only items from my original list I don’t see funded are electric car charging stations in rural Virginia and a study to identify piles of waste coal in Southwest Virginia. The latter seems a particular disappointment but perhaps there are other ways to do that.
Still, this seems a pretty good budget. Someday, if we can look back on this as the budget that spurred school modernization across rural Virginia and the development of the Central Virginia Training Center site in Amherst, the acceleration of a life sciences cluster in Roanoke and a transportation cluster in New River, the development of an offshore wind manufacturing sector in Southwest Virginia and an inland port or two, and made possible the landing of a major employer in Pittsylvania County, we’ll consider it a lot more than just “pretty good.”