Bernie Niemeier, Publisher
There is a lot going on in state government these days — not only the governor’s race, but also more budget cuts.
Gov. Timothy M. Kaine was expected to announce by early September his latest round of cuts to the state budget. In August, he told General Assembly money committees that Virginia faces a revenue shortfall of $1.5 billion.
Meanwhile, the state is trying to fix problems with one public-private partnership, its technology contract with Northrop Grumman, while it considers the possible benefits of another deal that would outsource the operation of Virginia’s ports.
Needless to say, it’s been a busy summer.
On the national front, health-care reform likely will affect many businesses.
Having sat at the budget table for many years, I can only repeat what every business owner already knows — employee benefits have been the fastest-growing category of expense over much of the past two decades, regardless of whether the economy is up or down.
In my opinion, the current system of health care in the U.S. amounts to nothing more than a tax on business. Premiums paid for insured employees are subsidizing the care of the uninsured and patients covered by Medicare and Medicaid. (Payments from these state and federally funded programs have not kept pace with the rising cost of health care.)
At the local level, our cities and counties are hard hit by higher unemployment, which translates into lower retail sales, lower property values and fewer real estate transactions. All of these translate into fewer dollars on Main Street.
Despite these woes, Virginia continues to pile up accolades as a best state for business. Unfortunately, in the current economy, that means clearing a lower bar, rather than setting a higher standard.
One has to wonder how long Virginia’s vaunted business reputation can last if we aren’t finding funds for transportation, education and economic development.
Can we simply rely on federal contract spending, primarily in traffic-choked Northern Virginia and Hampton Roads, to keep our economy in a perpetual Lake Woebegone status where everything is above average?
At Virginia Business, we tend to think that the status quo is not the way forward.
Looking toward both the governor’s race and next year’s General Assembly session, several thoughts come to mind.
One idea is to steadfastly focus on finding solutions, rather than simply rejecting any change to the current state of affairs.
A second is to apply business principles. If the bottom line isn’t big enough to get the job done, there are only two solutions — raise revenue or cut expenses. Moving money around in a game of musical chairs shows activity but rarely produces results.
Third, embrace bi-partisan approaches. Good business leaders are collaborators, and the best government leaders are, too.
This means setting aside party differences and putting customers first. By customers, we mean the residents of the commonwealth.
This isn’t just about business interests; it is about keeping Virginia at its best for everyone.Tweet
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