After topping CNBC’s list of the best states for business two consecutive years, Virginia slipped to third place in the latest version of that much ballyhooed report card, which was issued this week.
The tumble immediately became fodder for criticism of Gov. Glenn Youngkin and his administration, but that is unfair to a governor in office for less than six months. It is also shortsighted since the business climate should be the product of cooperative effort developed and implemented over many years.
The fact is Virginia remains an exceptional place for businesses to launch, locate and prosper, and it’s vital that officials on both sides of the aisle use this as motivation for improvement.
CNBC’s annual rankings assess the business climate in each of the 50 states, examining 88 metrics across 10 broad categories. Workforce, infrastructure and the cost of doing business are among the most heavily weighted measures, while education, cost of living and access to capital are considered comparatively less important.
In 2021, Virginia earned the distinction of being the top state for business, the first state to lead the rankings two consecutive years. The commonwealth was also No. 1 in 2007, 2009 and 2011, making it the only five-time winner.
This year, however, Virginia finished in third place, behind neighboring North Carolina and Washington state. The CNBC evaluators noted improvement in Virginia’s infrastructure, business friendliness, access to capital and cost of living, but downgraded the commonwealth’s marks for workforce, economy and “life, health and inclusion.”
Context is important. While a drop is concerning, a No. 3 ranking is still the envy of 47 other states. The sky is not falling, nor is Virginia in a ditch, as Youngkin famously described the state’s economy while running for office.
There is room for improvement, but Virginia need not abandon its principles or bend over backwards to lure new employers here. Thoughtful regulation and sustainable tax policy, along with substantial investment in education (K-12, community colleges, public universities) and social safety net programs have proven sufficient to cultivate a high quality of life for residents and a climate conducive to business growth.
Like other states, Virginia makes operating here more attractive through targeted tax credits, infrastructure development, higher ed programs and partnerships with employers to ensure their success. The commonwealth isn’t excessive in any of these, but generally acts responsibly in how it forges partnerships with businesses.