Gov.-elect Abigail Spanberger has staked her claim to “affordability,” which has now become a buzzword nationwide (although President Donald Trump has called “affordability” a hoax).
Affordability may turn out to be an easy campaign slogan, but a harder thing to accomplish through governance, particularly in Virginia.
Some of the key initiatives that many Virginia Democrats would like to pursue run the risk of making things less affordable, not more so.
What do we mean by “affordability”? Here’s how I’d define it: Either people have more money to buy things or the prices of those things come down (or, ideally, both!).
Now, let’s look at some of the challenges to accomplishing either.
Wages
Virginia Democrats want to raise the minimum wage, which is currently $12.41 per hour. It’s set to rise to $12.77 on Jan. 1. The figure often discussed is $15 per hour, although during the campaign, Ghazala Hashmi, now lieutenant governor-elect, said she supports $20.
I’ve been unable to determine what percentage of Virginia workers are working for minimum wage, but a study last year by Oxfam, a global income equality advocacy nonprofit, found that 21.6% of Virginia workers are making less than $17 per hour. Oxfam calculated that’s 989,753 workers who would benefit from an increase to $17 per hour in the minimum wage.
Don’t think that these are teenagers, either. Oxfam says only 12.7% of those are teenagers; the rest are adults. The single biggest beneficiary of an increase in the minimum wage would be single parents; 43.5% of single parents in Virginia are working for less than $17 per hour, Oxfam says.
On the plus side: That’s a lot of people who would have some extra spending money with which to fuel the economy. How many other social problems, for which taxpayers have to foot the bill, could be solved if people could simply make more money? Not all, but certainly some. There are other advantages to a higher minimum wage, detailed here.
Now, on the other side: I hate to sound like a hard-hearted capitalist, but where, exactly, is that money going to come from? Employers, obviously. How many can afford to pay higher wages, though? Some sure can. Squeeze Jeff Bezos for all he’s worth, as far as I’m concerned. Most people don’t work for billionaires, though. They work for much smaller employers. At last month’s state Senate Finance Committee meeting in Radford, senators saw a presentation from the Federal Reserve that should have gotten their attention: Small firms (one to 49 employees) and medium-sized firms (50-499 employees) are now reducing payroll; it’s the larger firms that are increasing employment. It’s those larger firms that can probably afford a minimum wage increase, but what about those small and medium-sized firms that are reducing their workforce? What impact would a minimum wage increase have there? It’s hard to see how increased costs would prompt them to hire more people.
I’m not saying we shouldn’t raise the minimum wage; I’m just pointing out that there are consequences to every action that we need to be aware of and take into account. Businesses may not pass on every increased cost to consumers, but they do tend to pass on some. Wage growth does play some role in inflation. Employers may conclude they need to retain all their employees and just pay the higher minimum wage, but they may also be more reluctant to create additional jobs. It’s all a tricky economic balancing act that doesn’t fit easily into a campaign slogan. We may see other consequences: Employers start weighing the cost of a human employee against a non-human one. This is why, when you go to McDonald’s, there’s no longer a clerk to take your order; you have to use a touchscreen computer.
Energy
Energy costs are front and center in Virginia (and elsewhere) right now. We’re seeing rising demand, and economics 101 tells us what happens when demand exceeds supply: Prices go up.
Virginia’s world-leading concentration of data centers is to blame for virtually all of that rising demand, but making data centers pay more doesn’t necessarily bring down the price of power by as much as some think it might. Why not? Well …
Critics of the Virginia Clean Economy Act say that its mandate that the state’s biggest utilities go carbon-free by 2050 is driving up the cost of power; advocates say that’s not so. Both sides have a point. Solar power (the primary form of renewable energy being deployed in Virginia) is generally the cheapest form of energy. On the other hand, state regulators recently allowed Appalachian Power to raise power bills to recover costs from renewable energy projects — $69 million, or about $4.36 per month for every residential customer. Solar power is cheaper, but facilities must also be built. If we somehow magically got all our power from the sun or the wind — both free natural resources — we would pay less for power, but we still have to build all the infrastructure to make that possible.
This isn’t just a solar and wind issue. Regulators recently gave the OK for Appalachian to incur costs associated with developing a proposed small nuclear plant in Campbell County. They also gave Dominion Energy the green light to build a natural gas plant in Chesterfield County. (Disclosure: Dominion is one of our donors, but donors have no say in news decisions; see our policy.) It’s not as if we can just say, “Forget about carbon emissions, let’s just keep burning coal.” Many of those facilities are aging and would need to be replaced, or updated, to stay in operation — and somebody would have to pay those costs, too. The Trump administration has ordered some coal-fired plants about to be retired in other states to stay in operation; one of the criticisms of that is that Trump is maintaining expensive power (from a source he likes) when what we need is less-expensive power (but some of that might come from sources he doesn’t like).
What about natural gas? The Trump administration (and others) have cited natural gas as an ideal energy source — it’s domestic and reliable. (The criticism is that it’s also a fossil fuel.) However, the price of natural gas fluctuates. Natural gas can also be exported, which helps with trade imbalances.
Here’s the catch: Natural gas is intended to bring down costs, but a report this week by Public Citizen, a nonprofit consumer advocacy group, warns that U.S exports of liquefied natural gas are actually driving up the cost of natural gas for U.S. consumers. Inside Climate News reported: “The analysis, based on data from the U.S. Energy Information Administration, found that Americans paid $12 billion more for natural gas between January and September 2025 than they did over the same period last year. Because natural gas is used to heat homes directly and to power the electric grid, its price has an outsized impact on Americans’ utility bills. Higher exports leave Americans more exposed to swings in the global market.”
Meanwhile, regardless of what kind of power we use, we need transmission lines — and the U.S. electrical grid is old. Futurism recently reported: “A recent report by Bank of America found that nearly a third of transmission infrastructure, like high voltage transmission lines or substations, is already near or beyond its useful life span. Meanwhile, a whopping 46 percent of US distribution infrastructure, including utility poles and power line transformers, was found to be in a similar state.” All that needs to be replaced, but somebody’s going to have to pay for it. Futurism’s conclusion: “Electricity Is Becoming Unbelievably Expensive as the US Power Grid Decays Into Ruin.” That might be hyperbolic; grid upgrades are very much underway, but there are still costs — costs that get passed on, in some way, to ratepayers.
Then there’s the Democratic desire to return Virginia to the regional greenhouse gas compact that Youngkin withdrew from — RGGI, the Regional Greenhouse Gas Initiative. That’s intended to make carbon emissions more expensive and encourage the development of more renewables. That might well lower prices over the long term, but if those costs get passed on to consumers now, that raises prices. (Consumers may also see that listed on their bills, while other costs — or savings — might be harder to identify.)
If you’re thinking that just about anything we do with power will make it more expensive, you might be right. It’s not as if the governor, or any government official, can just snap their fingers and order power rates to come down. It’s a lot more complicated than that.
Housing
Housing prices are more susceptible to boom-and-bust cycles, so high housing prices are something that might be more easily addressed than energy prices. This is a more straightforward matter of supply and demand: If we build more houses, the prices should come down — or at least not increase so much. However, the government doesn’t build houses; private developers do. The state government isn’t the entity approving or rejecting those plans; that’s local government. Local governments aren’t under pressure to address macro problems such as housing affordability; they’re usually under pressure from neighborhood groups that don’t want a specific project near them. How many county supervisors or city council members are going to tell a neighborhood group, “Sorry, but you have to pay the local price so we can help solve this national problem?” More likely, it’s, “Yes, we need more housing, but Cul-de-Sac Corner is not the place for this big townhouse project.” In Roanoke, just look at the controversy over whether the city should allow development of the Evans Spring property and, if so, what kind. If that were purely a housing decision, there would have been an easy vote for development. Instead, there was a more complicated debate over the environment and other considerations.
There may well be things a governor can do to encourage more housing to be built, but the point is that whatever those things are, they’re more indirect. The governor can’t order a locality to change its zoning rules or approve specific developments. Those are the things that would most directly lead to more housing.
Taxes
Something that would directly put more money into people’s pockets is to cut taxes. That’s not something Democrats are generally inclined to do. The state tax on groceries (something that Democrat Henry Howell campaigned vociferously against in the ’60s and ’70s) is gone, but the local tax remains. State Sen. David Suetterlein, R-Roanoke County, has filed legislation to repeal it. He’s also filed legislation to make permanent the standard tax deduction of $8,750 for single individuals and $17,500 for married couples filing jointly on state income taxes; those rates are currently set to decrease in 2027. Outgoing Gov. Glenn Youngkin has proposed the same in his final budget; we’ll see whether that stays there.
Democrats have also pushed to give all localities the right to hold a referendum on whether to raise the local sales tax to help fund schools. Currently, nine of the state’s 133 localities have that power. On the pro side: Schools need more money, and localities ought to be able to decide for themselves what to do. On the con side: Sales taxes are inherently regressive, meaning they fall heaviest on those on the lower end of the income scale.
Thought experiment: Does it make sense to raise the pay of minimum wage workers if localities simultaneously raise the local sales tax? Somebody with more math power than me could calculate how all that works out.
The argument against any tax cut is that the state could do more good with that money collectively than individuals could. Collectively, we might be able to fund a new road or a new school or some other public project. Individually, I might squander the money on buying the dolls and pencils that Trump says we don’t need so many of anyway. (I never thought I’d see a Republican telling Americans they need to lower their expectations.)
The argument in favor is that tax cuts do put more money in people’s pockets, and if I use it to buy dolls and pencils, that’s my business.
Mandatory student fees for athletics
While some of these categories are beyond the direct control of the governor, there is one category in which the governor could be quite influential, if she so chose: She could push for state colleges to eliminate their mandatory student fees for intercollegiate athletics, whereby students are forced to help subsidize what amounts these days to professional sports teams. At some schools — my alma mater, James Madison University, as well as Longwood University — these fees top $3,000 per year. At Virginia Military Institute, they top $4,000 per year. My Monday column on these fees showed how some colleges across the country with big-name sports programs don’t charge any such fees. Some of those schools may hide such fees under other accounting lines, but my Thursday column showed how many college athletic programs around the country get no “institutional support” of any kind. They rely entirely on donors and the free market — ticket sales, TV revenues, corporate sponsorships. The more prominent the school is on the football field, the less it relies on any institutional support or mandatory fee because it can generate enough money through other means. Of the 12 schools in this year’s College Football Playoff, three report that they get no institutional support or student fees, and four others say those revenues account for just 1% or 2% of their total athletic revenue. JMU is the second most-subsidized athletic program in the country — 75% of its revenue comes from either fees (73%) or institutional support (2%).
Virginia is an outlier. Statewide, these mandatory fees average 6.8% of a student’s total payment for tuition, fees, room and board. With one fell swoop (well, procedurally a lot of swoops), Spanberger could take credit for reducing the cost of attending a state college by 6.8% without touching a dime of money going to academic programs.
On Thursday, Spanberger rolled out a legislative agenda that she said is “focused on lowering housing, healthcare, and energy costs.” Elizabeth Beyer, Cardinal’s Richmond-based reporter, has coverage of what she proposed. Maybe some of her ideas will work, but these are not simple problems to solve, whether you’re President Trump or soon-to-be Gov. Spanberger.
Those who have seen or listened to the musical “Hamilton” remember the scene where George Washington counseled the impatient Alexander Hamilton: “Ah, winning was easy, young man,
governing’s harder.” Ol’ George was right.
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