We don’t know much yet about how either candidate for governor would run the state if she were elected, although we’re learning more about what Democrat Abigail Spanberger would do than we are about Republican Winsome Earle-Sears.
Once the candidates were confirmed as their party nominees in early April, I contacted both campaigns to seek an interview on various aspects of policy, starting with energy. Spanberger’s campaign called the next day; an interview was set up for later that month and my interview with her about energy policy published May 5. More than a dozen requests for interviews with Earle-Sears have yet to net an interview. We did have one scheduled in late May; 15 minutes before it was supposed to start, her campaign said that she’d have to cancel because of “logistical issues” and that the interview would be rescheduled. It has not been.
In the meantime, I sought a second interview with Spanberger, this time to talk about economic development, and one was scheduled promptly. My goal is that over the course of the campaign I talk with both candidates about policy issues the next governor will face, although so far only one of them is talking.
What struck me about my conversation with Spanberger about economic development is how closely it resembled our conversation about energy issues.
On energy, one of the key questions was solar energy, which has become a touchy issue in many rural counties that sometimes see solar farms as ugly industrial blight that’s changing the rural character of the community. Spanberger said she was against mandating that rural counties accept solar farms. Instead, she wanted to set up a central place where counties could get information on what they should know when negotiating with solar developers so they could make more informed decisions, one way or another.
Our conversation about economic development began with a related issue: data centers, which have also become a touchy issue in some communities, while others have been eager to secure them. (See Botetourt County, which recently sold 312 acres in its industrial park to Google for a data center complex.)
Data centers: State should provide localities with more information
Spanberger’s answer on data centers was essentially the same as it was with solar: Whether localities accept or reject data centers is up to them, but they ought to be able to go to the state to get information on what they can bargain for if they wish.
“I think the governor’s office should really lead an effort to have a statewide strategy,” Spanberger said. “Not a mandate dictating where they should or should not go, but as I view it more of an on-ramp for localities who want to bring data centers to their communities. Certainly if a data center comes calling, that’s a decision for local communities and local leadership. But some localities really want data centers but don’t know how to raise their hands, but then there are many communities who would consider data centers but don’t know what to ask.”
As with solar, Spanberger sees a state government that can be an information resource for what a locality should be taking into consideration and what a locality could reasonably ask for in negotiations. “There are some communities who want it and some who don’t, and there are just a lot of concerns and unknowns,” she said. Having a state information bank could be helpful to rural localities in particular. she said. “It’s localities that don’t have a staff of [that] many people who can do the research and dig into the issues the way much larger communities can.” She foresees a system where small localities in particular can turn to the state. “If the state can be a partner — ‘These are the things you can ask for,’ ‘These are the priorities your community should look for in any investments that want to come’ — [then we] just make sure that when a small community board of supervisors or a big community board of supervisors votes yes or no on a project, they can explain, based on the best practices put out by the governor, this just isn’t a good deal for us.”
The current system, Spanberger said, leaves localities on their own to figure out what they can and can’t insist on, and some are better positioned than others to do that. “It shouldn’t be reinventing the wheel every time,” she said.
Data centers: Open to extending tax break but wants more study
Setting up a clearinghouse to give localities more information for negotiations with data centers, though, doesn’t address a bigger question: Should the state be encouraging more data centers? The main way it does that is through a tax break that is set to expire in 2035. A move in the most recent General Assembly session to extend that to 2050 was defeated. A study by the General Assembly’s research arm, the Joint Legislative Audit and Review Commission, found that the tax break saved data centers $928 million in fiscal year 2023 — another way of saying that the state passed up $928 million in tax revenue to help attract the facilities.
That same report also found that data centers in Virginia account for 74,000 jobs, $5.5 billion in labor income and $9.1 billion in gross domestic product, so the policy question for Virginia is whether that $928 million tax break is a good tradeoff to secure that amount of employment and income — but also the increased energy demands that come with data centers. Related: Would data centers still flock to Virginia if the incentive were reduced or eliminated? Changing the tax incentive might reduce the power demand but also the number of jobs and the tax revenue they create.
While that 2035 expiration date on the tax breaks may still be a decade away, data center companies need to know the long-term financials before they make siting decisions, so 2035 isn’t as far away as it seems. There are also regional politics at play here: While some in Northern Virginia may have had their fill of data centers and think that axing those tax incentives is a good way to slow down their growth, there are those in rural Virginia who might think exactly the opposite: Just as data centers are starting to branch out to other areas, some want to shut down the tax incentives? That would come across in many rural areas as a case of Northern Virginia saying, “We’ve got ours, but you can’t have yours.”
Spanberger said she’s open-minded about the tax breaks data centers get. “I’m open to extending them philosophically, but I do think we need to comprehensively evaluate what they bring to communities,” she said. “I have no opposition to the fact that the exemption was put in place initially but, like any policy, is it getting the full, desired impact? If it’s getting the full, desired impact, then we can continue the incentive. … If it’s not, then the answer doesn’t have to be ‘No, it’s not getting the full measure of benefit, therefore we need to do away with it.’ There are any variety of paths forward, but it needs to be based on that comprehensive evaluation.”
Inland port in Washington County: ‘Transformational’
Virginia has one inland port already, near Front Royal. For outbound cargo, the inland port serves to divert that traffic away from rival ports in Baltimore and Philadelphia and instead direct it to Hampton Roads. For inbound cargo, it serves to speed up turnaround time at Hampton Roads; that freight can be unloaded, shipped by train to Front Royal and then processed there. The inland port itself has very few jobs, but it has spurred the creation of thousands of trucking and warehousing jobs in the northern Shenandoah Valley.
Legislators in Southwest Virginia — led by state Sen. Todd Pillion, R-Washington County — have pushed for a second inland port, this one in their part of the state. Washington County has offered land in the Oak Park Center for Business and Industry, which is near both Interstate 81 and a Norfolk Southern rail line. An early study estimated it might cost $55 million to build a “modest-sized” inland port that would generate $1.75 billion in economic benefits over 20 years. The Virginia Port Authority is currently conducting a more detailed study but funding to build an inland port is yet to come, and our next governor will have a lot to say about whether that funding is forthcoming.
Where does Spanberger stand? She’s in favor and hopes that “we’ll have a lot more clarity” on cost once the port authority study is done. She also says she understands that there are some possible changes in “configuration” taking place that could hold those costs down. “As a general issue of principle,” she said, an inland port in Southwest Virginia “could be absolutely transformational” and she praised Pillion “for being an extraordinary advocate” for the facility.
Spanberger said her service in Congress on the House Agriculture Committee had acquainted her with the cost of shipping farm products. “I know there’s a lot of talk within the ag space” about high shipping costs, she said, and an inland port could help reduce those. She also noted that some roads and bridges are “not always as strong as they should be” and that transferring some heavy loads of fertilizer and grain to rail could reduce stress on that infrastructure.
Improvements to U.S. 220 in Henry County are ‘vital’
In the course of discussing economic development, Spanberger made a critical reference to Smart Scale, the process the Virginia Department of Transportation uses to score potential transportation projects. “It makes sense as a matter of principle but once you’re always looking at population numbers, and you prioritize that, you’re always going to be overlooking” rural communities, she said.
By that point, our allotted time was running out, so I followed up later about two road projects that don’t score well in terms of serving lots of people but are much desired by local community leaders for their economic development potential: improving U.S. 220 through Henry County to straighten a winding road and the proposed Coalfields Expressway in Buchanan and Dickenson counties that could open those counties to more development. Spanberger’s written response: “Both of the projects you mention are good examples of the important role physical infrastructure plays in economic development. I’ve heard directly from local leaders and community members in Southside Virginia about just how vital improvements to 220 would be in particular to further development in the region, including bringing in more local advanced manufacturing and supporting the Blue Ridge Innovation Corridor. We can’t ignore the nuts and bolts required to make new opportunities happen.”
What catches my eye there is the reference to the Blue Ridge Innovation Corridor, a relatively new initiative of business leaders aimed at tying that part of Southside with the Roanoke and New River valleys.
Our 23-minute conversation was, by no means, a full inquiry about Spanberger’s views on economic development. I’m hoping to continue this conversation with follow-up interviews on other policy issues that will face the next governor. And, of course, I’m still hoping I’ll have an opportunity to ask these same questions of Earle-Sears.
In addition to these interviews, we submitted questions to all the statewide candidates. Some have answered, some haven’t (yet). You can read their replies (or lack thereof) on our Voter Guide.
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