Commentary
New administration needs to address trouble spots

by Hugh D. Keogh
for Virginia Business
January 2006

What seemed like an endless political campaign season is mercifully behind us. Virginia now is preparing for its unique quadrennial changing of the guard in the executive branch and the 2006 session of the General Assembly. A new administration in its first year can sometimes be troublesome for business, so it might be wise to step back and take stock of the business and political landscape in our commonwealth.

The first and overarching observation is this: Virginia is in very good shape. Our unemployment rate in recent months generally has been in the range of 3.5 percent, one of the lowest rates in the nation. Our per-capita income is well above the national average, ranking eighth in the United States and the highest in the Southeast. We continue, with reason, to brag about our quality of life and the many things, tangible and intangible that make Virginia special. On top of that, jobs are being created in Virgin-ia in record numbers. Sounds like a pretty solid foundation for both business leaders and policy makers.

So what then are the chief concerns facing people like Gov.-elect Tim Kaine, House Speaker Bill Howell and Senate Finance Committee Chairman John Chichester as we ease into the session? Well, let’s start with transportation, which already dominates the thinking and the planning of our elected leadership. Virginia’s got a transportation problem, indeed a crisis in certain quarters, and every day that goes by without treatment worsens that problem. Every type of business, every part of Virginia is affected, although differently, and that diversity is in fact part of the problem. But solutions cost money, and our leadership has to discern what solutions will work and get on with making some difficult decisions.

With less fanfare, another nagging issue confronting Virginia companies is finding technically skilled workers to run their plants and offices. Like transportation, the work force issue plays out differently in various parts of Virginia, but it is indeed a statewide concern. Businesses continually express frustration about their difficulty getting employees trained or finding skilled workers in their communities. Vir-ginia’s cumbersome work force management system begs for better coordination, and the business community needs to be more engaged and articulate in identifying its needs. Legislators have voiced their concerns on the matter, and legislation may be afoot to rearrange the system. We can do better in work force development in Virginia, and we will. No single policy area has more potential to confront the economic disparity in different parts of the state than improving the caliber of the labor force throughout Virginia. Employers need access to training, and the commonwealth has a responsibility to give them that access.

Finally there is the base closure issue. The recommendations of the federal Base Realignment and Closure Commission have resulted in:
• Disruption in Northern Virginia, including more pressure on the transportation infrastructure, as military personnel are shifted from leased office space to bases such as Fort Belvoir.
• Significant gains in personnel in Central Virginia, principally at Fort Lee.
• Near chaos in Hampton Roads as the future of Naval Air Station Oceana befuddles local state and federal officials.

Virginia has prided itself in being at the heart of the country’s defense, a position that has risen sharply in importance since 9/11. The state’s leadership is mindful of its strategic importance, but it must assert all of its wisdom in bringing stability to Virginia’s defense posture, using large doses of fiscal discipline, political savvy and strategic vision.

There’s plenty to feel good about in Virginia, but there are enough serious, nettlesome matters to occupy business and government’s attention for years. Here’s hoping business people and politicians join hands in solving these problems.

Hugh D. Keogh is president and CEO of the Virginia Chamber of Commerce.