Northern Virginia and the Richmond exurbs subsidize the rest of the state. Here’s the math.

Those of us who live in rural areas like to think of ourselves as independent people who don’t need any help, least of all from the government. 

The great philosopher Hank Williams Jr. summed this up in his treatise, “A Country Boy Can Survive.”

That, however, is all a myth. The annual State of the Commonwealth report by Old Dominion University spells out just how big a myth it is: Twenty-two localities in Virginia subsidize the other 111. 

Those 22 are mostly in Northern Virginia and the Richmond exurbs. 

Eight of the 10 localities that are the biggest “givers” to state government are in or near Northern Virginia; nine of the 10 that are the biggest “takers” are in Southwest and Southside.

After every election that doesn’t go their way (which, increasingly, are most of them), I see people from rural Virginia muse how the state would be better off without all those blue-voting people in Northern Virginia. Think what you will politically, but, economically, Northern Virginia (with some help from the Richmond exurbs and a few other places) is subsidizing the rest of the state. We are the ones who are on the dole. The ODU report spells out in excruciating detail just how much. 

Here are just a few numbers to tease you with before we dive in:

Fairfax city depends on the state for just 13.1% of its local government revenue. Economically speaking, it’s the locality least dependent on the state. And the feds, too. Just 0.3% of its funding comes from across the Potomac. By contrast, Henry County is the most dependent: 65.4% of its funding comes from the state. Henry County is practically a ward of the state. Add in the federal government, and 85.4% of the county’s funding comes from somewhere else. 

On a per-capita basis, every resident of Falls Church sends $3,799 to the state government and gets back $1,123 in services. That’s a net loss of $2,676 per resident, if you want to think of it that way. So where does that remaining $2,676 go?

Downstate, especially to Southwest and Southside. 

Each resident of Norton sends $628 to the state on a per-capita basis, but gets back $3,153 in services. Put another way, each resident of Norton is subsidized to a net balance of $2,526. 

That’s where some of Falls Church’s money goes. Norton residents may not feel subsidized, but without funding from the state (by which we mostly mean Northern Virginia and the Richmond exurbs), Norton wouldn’t be able to pay for its schools or other local government services.

All this data comes from a blandly titled but eye-popping section of the ODU report entitled “A Fiscal Incidence Analysis of Intergovernmental Fiscal Transfers in Virginia.” I might have taken my editor’s pen, scratched out and titled it: “Who’s Propping Up Whom.” Or maybe: “Here’s a list of all the Virginia localities that are mooching off Northern Virginia.” Or whatever the headline on this column winds up being.

And now, for the numbers.

Northern Virginia and the Richmond exurbs subsidize the rest of the state

These charts show, on a per-capita basis, how much residents are giving and receiving from the state government — this is what shows that 22 localities subsidize the other 111. (To save space, I’ve put them in slideshow form, so you can click through. The localities are listed in order, with Falls Church giving the most and Norton taking the most.)

If all those numbers are too mind-numbing for you, perhaps you’d like a nice interactive map instead that you can hover over to get the figures for each locality:

Here’s where we can see the geographical concentration in Northern Virginia and the outer suburbs of Richmond, plus a few other places. 

Some notable ones: Two rural counties along the Chesapeake Bay — Lancaster and Northumberland — make the list. Those are also two counties that have seen a lot of affluent newcomers, many retirees, so their income taxes help put those two counties into the “givers” category. 

Two counties in the western part of the state also make the list of 22, although admittedly near the bottom: Bedford and Montgomery. Bedford is experiencing population growth from three sides: Lynchburg to the east, Smith Mountain Lake to the south and Roanoke to the west. Montgomery is, of course, home to Virginia Tech and the economic growth spinning out of the Virginia Tech Corporate Research Center. 

Also notable: the complete absence of any locality in Hampton Roads. Everything east of Williamsburg and James City County is a “taker.”

Even many of the localities that I think of as “affluent” or “prosperous” or “growing” show up as takers: New Kent County, Prince William County, Spotsylvania County and Stafford County, all of which have median household incomes in the six figures. Affluence, though, does not eliminate pockets of poverty, or other needs, such as roads.

Here are two other ways to visualize this data. This shows, on a per capita basis, the five localities that get the most from the state and the five that get the least.

This chart factors in the “balance of payments,” how much each locality gives and how much it receives, all on a per capita basis.

19 of 133 localities get most of their money from the state 

Here are some more charts that show what percentage of each local government’s funding comes from other governments. If you don’t want to scroll through, here are the 19 that get a majority of their funding from the state government (which, as we’ve seen, gets much of it from Northern Virginia): the counties of Alleghany, Appomattox, Craig, Giles, Greensville, Halifax, Henry, Lee, Lunenburg, New Kent, Nottoway, Patrick, Pittsylvania, Russell, Tazewell, Wise and Wythe, and the cities of Buena Vista and Radford. Of those 19, all but one (New Kent) are in Southwest or Southside. (I guess this depends on how you categorize Alleghany, but a former supervisor there once told me that county should be considered part of Southwest, so who am I to argue with someone who lives there?)

If you’d rather see this in map form, here you go:

You’ll see how much Henry County pops out. It gets 65.4% of its funding from the state. No other locality in Virginia is so dependent on the state government. Craig County comes in second, at 58.6%. You’ll see Bath County stands out, too, in the other direction. That’s the result of having two big things to tax: the Omni Homestead resort and the Dominion Energy hydroelectric pumped storage project.

About two-thirds of the local governments in Virginia get most of their funding from the state and federal governments

These range from the two examples I cited at the beginning — from Fairfax city, which gets only 13.4% of its funding from other governments, to Henry County, which depends on others for 85.4%. Or, if you want to flip that around, Fairfax city supplies 86.6% of its own funding while Henry taxpayers supply just 14.6% of their county’s funding. They may think their local taxes are too high, but taxpayers elsewhere are paying most of the county’s bills. 

You saw the figures in the slideshow above, so here’s a map that shows the combined dependence on the state and federal governments. Where Henry County stood alone in dark green on the state funding map, now it’s joined by Craig and Lee counties, but remains tops in Virginia for its combined dependence on state and federal funding.

This is why we need to pay attention to the Northern Virginia economy

We’ve seen lots of data now about how the Northern Virginia economy is slowing down; the ODU report says that over the past year, the region has lost jobs. It’s easy for people in rural, Republican-voting areas to sneer at Democratic-voting Northern Virginia, but the fiscal reality is that those rural areas need Northern Virginia to do well economically — so rural Virginia is tied economically to Northern Virginia even if it doesn’t like the region’s politics. 

All these charts show just how tight those ties are.