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July 30, 2008
In this issue
From the President
Hugh Keogh
Now that all efforts to improve Virginia’s transportation infrastructure have crashed and burned during the not-so-special session earlier this month, perhaps it’s time to turn our attention to a couple of “good government” matters as we contemplate the 2009 session of the Virginia General Assembly.
The first of these is bi-partisan redistricting. There is an emerging and growing sentiment here that the legislative process and the principle of “one man-one vote” would benefit immensely from a method of drawing district boundaries that was not designed solely for partisan motives, e.g., to protect incumbents or insulate candidates from competition.
Technology has made manipulation of district lines easy and fool-proof according to who is drawing the lines. More than a dozen states have gone to some form of bi-partisan selection. In Virginia, the effort is being spearheaded by Virginia 21, a coalition of college students, recent grads and some business people attempting to generate more involvement in the political process. The Virginia Chamber has lent its name to this effort.
In 2008, the initiative, despite enjoying bi-partisan support of Governor Kaine and Lieutenant Governor Bolling and being roundly approved in the Virginia Senate, was unceremoniously scuttled in sub-committee in the House of Delegates. The initiative will be back before the General Assembly in 2009 and we hope it advances. We shall see.
Second, long a cause favored by the Virginia Chamber is the notion of the two-term governor. Virginia remains the only state in the nation in which the governor cannot succeed himself. Because changing that system requires a constitutional amendment, the process needs to begin anew in 2009 so that an intervening General Assembly election can occur before the measure is approved the required second time and finds its way onto the ballot in 2010.
While there has been only scant progress in advancing this notion in recent years, we will keep plugging away. Our rationale is that in the 21st Century the pace of events, information flow and budgeting cycles are so rapid that governance suffers in a single four year term. Virginia would benefit enormously from more long term, strategic thinking, planning and budgeting that a two term governorship would permit. And the voters would have the opportunity to “turn the rascal out” after four years if performance demanded.
The tactical key to winning legislative support for this critical change is to craft a power-sharing arrangement that would meet with the mutual approval of the General Assembly and the Executive Branch. Even with such a model in hand, getting a bill out of the House committee in ’09 will be problematic.
Let us hear from you with your thoughts and suggestions on these and other issues before we enter the fall crunch. Many thanks.
Transportation Session Comes Up Short -Again
Tyler Craddock
The General Assembly recently concluded the special transportation session, and each chamber passed bills representative of their view of what a solution should be.
The Senate narrowly approved a proposal authored by Senator Dick Saslaw that would have used statewide sales, titling and gas tax increases as well as regional taxes and fees to fund a plan that contained statewide and regional components. That bill was amended on the House floor to remove its gas tax provisions, but then it failed.
The Governor’s bill, which was based on increases in registration fees, the titling tax and the grantor’s tax as well as regional sales taxes to fund a plan with statewide and regional components, was originally defeated in the House Rules Committee. The committee reversed its decision, however, and sent the measure to the floor. While the House did not vote the bill up or down, the House failed to pass a floor amendment to Senator Saslaw’s bill that was identical to the Governor’s bill. In the end, the Governor’s bill failed as well.
The House approved legislation that would have provided regional resources derived from earmarking future tax receipts from the cargo container revenue at the Port of Virginia, Dulles International Airport and Reagan National Airport. That bill was killed by the Senate Finance Committee. In addition, the House approved bills to expedite public-private partnerships in specific areas of Virginia and to conduct a top-to-bottom, soup-to-nuts audit of VDOT. Like the funding bill, these proposals were killed by the Senate.
Both the House and Senate approved versions of a transportation lockbox. But, they did not reconcile those versions, so no lockbox proposal moved forward.
Consequently, transportation will probably not be addressed again until the 2009 General Assembly session. How it will be addressed is anyone’s best guess. It is important, though, to recognize the political dynamic surrounding this issue, a dynamic that comes into play more and more as we move closer to Election Day 2009.
Basically, both the Republicans and the Democrats think they are on the winning political side of this issue, and as strange as it may seem, they are both right. Here’s why. While each party is motivated by the need to shape the redistricting process in 2010, each party has slightly different priorities going into the 2009 state election. The transportation issue can be played either way with the winner coming down to which party uses the issue most effectively to achieve their goals.
Going into the 2009 state elections, the House Republicans have no guaranteed line-in-the-sand, etched-in-stone seat at the redistricting table like the Senate Democrats do by virtue of their controlling the Senate. The likelihood of maintaining control of the House is slightly higher (probable) than electing a Republican Governor (toss up). Thus, the prime directive for the Republicans is 51 seats in the House of Delegates, and the no-tax position seems to be the one that unites their party and gets them to 51 seats given the way in which the current districts are drawn. As an added bonus, it also rallies their base on behalf of presumed gubernatorial candidate Bob McDonnell.
Alternatively, while Democrats may believe that the lack of new transportation funding will help them to peel off suburban or exurban Delegates such as Dave Albo and Tom Rust and protect newer incumbents such as Joe Bouchard, Bobby Mathieson and Margi Vanderhye, their first priority should be the Governor’s mansion. Since they already control the Senate, and since the likelihood of winning the Governor’s mansion is higher (toss up) than winning the House (not probable), it is in the Democrats’ best political interest to focus first on the Governor’s race. The Democrats already have a legislative firewall that the Republicans do not. The transportation issue’s appeal may play into a strategy of running up the totals in the cities, suburbs and exurbs, much like Tim Kaine did in 2005.
The long and short is that each party’s current posture on transportation is the one that they need to follow in order to achieve success at the polls in 2009.
For the Republicans, the no-tax stand excites their base across the Commonwealth, and because of redistricting that base is more concentrated in a slight majority of House districts, thus addressing their goal of continued control of the House of Delegates. Secondarily, it pumps up statewide vote totals for Bob McDonnell, even if they are a few extra votes at the margin in Democratic districts.
For Democrats, the lack of a solution helps them try to run up the score in growing but gridlocked suburban and exurban areas. While that might affect a few House races, the real aim is to create a winning majority for their gubernatorial candidate.
There is a real possibility that the result could be that each party achieves their prime objective because each party is going after a different set of voters. Like a game between two evenly matched football teams, it will come down to fundamentals and who executes them better.
Virginia Drops to Second Place in CNBC Business Ranking
Keith Cheatham
After clawing its way to the top, Virginia slid one place in an annual ranking by CNBC of America’s top states for business. The new rankings were announced in July.
In the top five spots were Texas (1), Utah (3), Idaho (4), and Colorado (5). Our neighboring states fared less well: North Carolina (6), Maryland (36), and West Virginia (47).
In the bottom five were Alaska (50), Hawaii (49), Rhode Island (48), West Virginia (47), and Mississippi (46).
Ten categories were ranked and used to calculate the final scores. Virginia’s 2007 rankings are in (parentheses). Here’s how we stacked up compared to other states:
- Cost of Doing Business – 11 (12)
- Workforce – 8 (8)
- Economy – 17 (3)
- Education – 11 (11)
- Quality of Life – 28 (11)
- Technology & Innovation – 14 (14)
- Transportation – 13 (22)
- Cost of Living – 27 (35)
- Business Friendliness – 2 (4)
- Access to Capital - 13 (12)
Interestingly enough, the winner this year also came in first in transportation. Perhaps the time has come for a road trip to Texas to see what they’re doing right?
There will, no doubt, be more polls and new rankings. Virginia should place well in all of them. One thing to remember, though, is that these rankings – good or bad – don’t happen by accident. They are often the result of good, or bad, policy decisions.
So, even though the November 2009 state election is months away, it’s not too early to pay attention and start talking about what is important to you and your business.
If you survive the fall federal election, you’ll have the opportunity next year to elect 100 members in the state House, and a new Governor, Lieutenant Governor and Attorney General.
We’ll help you get started on the state House seats shortly by sharing the Virginia Free (2008 General Assembly) scores with you when they come out. To see how the congressional races are shaping up, read on.
Elections Matter: The 2008 Virginia Congressional Races Are On
K. Clayton Roberts
(Editor’s note: We often write about state and national elections, and how important they are to maintaining a strong business climate. With the national election just months away, we’ve asked guest writer Clayton Roberts to share his insights on the Virginia congressional races. At stake are 11 House seats and one Senate seat. To date, the U.S. Chamber of Commerce has endorsed Representatives Drake, Forbes, Goode, Goodlatte, Cantor and Wolf. )
It is extremely difficult to beat an incumbent member of the U.S. House of Representatives in Virginia. It has happened just twice in the past 25 years - when Jim Moran ousted Stan Paris in 1990 and Tom Davis beat Leslie Byrne to capture Virginia’s newest congressional district, the eleventh, in 1994. (Before that, you have to go back to 1982, when Norman Sisisky beat Bob Daniel and Rick Boucher beat William Wampler.)
Since 2000, when current districts were first drawn, Virginia’s incumbent congressmen have won reelection with an astonishing average of 71 percent of the vote while outspending major-party challengers by nearly four to one. The advantages of incumbency have been all but insurmountable.
Despite the odds, eight of Virginia’s 11 incumbent U.S. Representatives have major-party opposition this year and six of seven incumbent Republicans face Democratic challengers.
The last time Democrats contested every one of Virginia’s U.S. House races was 1990. Before that, it was 1974, the year Watergate forced President Nixon to resign and left the GOP vulnerable.
This year, it’s the embattled Bush White House, a faltering economy, an unpopular war, and shifting demographics that have prompted challengers to take on incumbent congressmen who are rarely challenged. If past performance is a reliable indicator, it is a stretch to assume that any Virginia incumbents will be retired at the ballot box. But it is a difficult climate for Republicans. Virginia’s retiring Republican U.S. Rep. Tom Davis spelled it out for his colleagues:
“The political atmosphere facing House Republicans this November is the worst since Watergate and is far more toxic than the fall of 2006 when we lost thirty seats (and our majority) and came within a couple of percentage points of losing another fifteen seats. Whether measured by polls, open seats, money, voter registration, generic ballot, Presidential popularity or issues, our party faces a steep climb to maintain our current numbers.”
No doubt there will be excitement and drama in this year’s contested races as several formidable challengers have emerged and are waging strong, well-funded campaigns. And, with shifting demographics altering the complexion of districts that are nearing the end of their 10-year life span, a few contests will probably be very close. In addition, at least two new faces are guaranteed to join the Virginia delegation in Washington as U.S. Senator John Warner and U.S. Rep. Tom Davis both retire from Congress after long and distinguished careers.
If Virginia has seen a dearth of close House races, our Senate contests are a different story. Recent U.S. Senate races in Virginia have been fiercely competitive. George Allen ousted incumbent Chuck Robb with 52 percent of the vote in 2000, and then lost in his first bid for reelection to Jim Webb by less than one percentage point in 2006. Retiring incumbent John Warner, first elected in 1978 with a mere 50 percent of the vote, was returned to Washington by wide margins until managing just a five-point victory over Mark Warner in 1996.
Mark Warner is having another go at the John Warner Senate seat this year, and his broad appeal across party lines and deep pockets give him a decided advantage over former Governor Jim Gilmore, who has faded from the limelight in recent years and is struggling to fund his campaign.
Nationally, experts widely agree that the outlook for Republicans is bleak. In the Senate, there are 35 seats up this year, with 23 held by the GOP. Only 15 are truly competitive, and 13 of those are GOP seats. So Republicans have much more territory to defend, and if they could manage to break even in competitive races, they would still have a net loss of six seats.
According to Kiplinger.com, “Our latest survey of Senate races shows the GOP certain to lose one seat (Virginia), very likely to lose one other (New Mexico), and in real danger of losing two more (Colorado and New Hampshire). Two others are at best a toss-up (Mississippi and Minnesota). And Republicans have only a slight lead in Alaska, Maine, and Oregon. Even some Republicans who should be shoo-ins (John Cornyn in Texas, Pat Roberts in Kansas, Liddy Dole in North Carolina and Mitch McConnell in Kentucky) face challengers who are getting uncomfortably close in recent polls.”
In the House, national political pundits predict GOP losses ranging from 10 to 20 seats.
Below is a list of Virginia’s major party congressional candidates in 2008. If elections matter to your business, now is the time to take notice and get involved in selecting the best candidate for your business.
(Virginia Chamber member Clayton Roberts is President & Executive Director of the Virginia Foundation for Research & Economic Education, located in Richmond, VA.)
Stormwater Regulations in Process
Tyler Craddock
There are currently three regulatory actions with regard to stormwater runoff that will affect the cost of doing business in Virginia. These regulations would apply across Virginia when persons construct new structures or redevelop parcels with existing structures.
The first is an examination of the regulations that govern local stormwater runoff programs and how stormwater is handled. Under the provisions of the current draft, all new construction and any redevelopment of sites with less than 40 percent impervious cover would be required to treat stormwater to a point that would reduce phosphorus runoff levels to .28 lbs/acre/year. Redevelopment projects with greater than 40 percent impervious cover would be required to reduce phosphorus runoff by at least 10 percent (with a floor at .28 lbs./acre/year). In addition to stormwater quality, there are provisions that address stormwater quantity.
The business community is concerned that certain provisions in the proposal could allow local governments to remove proffered open space arbitrarily from compliance calculations. Moreover, the proposal will especially hurt commercial and industrial development because by its nature, it tends to have more impervious cover and if provisions concerning redevelopment sites are too stringent, it will only make redevelopment of some sites impractical and exacerbate inefficient land-use patterns by pushing development into more remote locations.
The current proposal for the water quality and quantity components is available by clicking here, and the proposal for local programs is available by clicking here.
The second action concerns the fees that developers are required to pay, and it is available by clicking here.
The final regulatory action is an examination of the actual general permitting process. The current draft language is available by clicking here.
While there are not such drastic prima facie concerns regarding the fees or permits as is the case with the stormwater quality and quantity regulations, the Chamber is nonetheless following the issue, working closely with like-minded allies to suggest minor changes to improve these proposals and to help ensure that any resulting changes are not harmful to business in the Commonwealth.
As you read these proposals, please feel free to share any suggestions or comments with Tyler Craddock. The final work product will be submitted to the Soil and Water Conservation Board on September 21. They will then submit the proposed language to the public for formal comment before promulgating final regulations.
Global Warming Heats Up – Chambers to Address It
David Anderson
The date for the business-backed Global Warming and Energy Policy Conference, co-sponsored by the Virginia and the U.S. Chambers of Commerce, is set for November 3.
The conference will focus on potential Congressional action, what Virginia and the Southeast states should (or should not) do in the absence of Congressional action, and the implications EPA regulation of greenhouses gases (GHG) under the Clean Air Act (CAA) might have. Mark your calendar now and watch for more news on this important event. It’s important that you attend and here’s why.
The prospect of federal regulation of GHG came a step closer to happening this month. Just recently, EPA took the first formal step in rulemaking by issuing an Advance Notice of Proposed Rulemaking (ANPR) on whether to regulate GHG. The U.S. Chamber has condemned the EPA effort as a naked power grab.
EPA regulation of GHG will potentially have a dramatic impact on virtually every sector of the economy. GHG emissions are typically far greater than emissions of other pollutants. Moreover, CAA provisions were designed to address air pollutants with primarily local or regional effects, not emissions with global effects. Applying existing caps on emission of air pollutants to GHG would require dramatic reductions by current permit holders and would bring many now exempt businesses under the Act.
Areas subject to new or enhanced regulation mentioned in the ANPR include new and modified major stationary sources, non-road engines and equipment such as construction equipment, farm tractors, forklifts, harbor crafts, lawn and garden equipment, locomotives, aircraft, and rebuilt heavy-duty highway engines. Because water vapor is a GHG, steam generating units may be subject to new mandates, as well as petroleum refineries. Theoretically, everything from lawnmowers to farmers’ livestock (producing how much methane?) to office and apartment buildings could be subject to regulation.
Our global warming conference will occur before the ANPR comment period ends. We are working with the U.S. Chamber to use the conference as a key event in galvanizing responses from the Virginia business community to the EPA effort.
On a different matter, a federal court recently struck down EPA’s Clean Air Interstate Rule (CAIR). The rule created a regional cap and trade program for air pollutants.
Under the program, it was theoretically possible for states emitting pollutants into neighboring states to satisfy their obligation under the program by simply buying credits, rather than reducing emission. The court found that to be contrary to statute. Unless there are further appeals, it is back to square one for EPA and for states trying to meet their attainment levels. Virginia has also instituted a version of the rule. Whether the Virginia rule can survive the demise of the federal rule is an open question.
Attainment is a serious issue. When an area is out of attainment, the economic consequences are serious. Non attainment areas, for example, can lose federal highway and transit funding, be subject to restrictive permit requirements and enhanced federal pollution control measures and, in some cases, special requirements for vehicles and fuels sold in the area. Areas in non attainment are essentially “redlined” and could lose business permanently.
Minimum Wage Hike Number Two In Effect
Don’t forget that the federal minimum wage increased on July 24 from $5.85 to $6.55 per hour. This is the second of three increases generated by a May 2007 spending bill amending the federal Fair Labor Standards Act. The third and final increase will be effective on July 24, 2009, and will raise the federal minimum wage to $7.25 per hour.
“Virginia Torchbearer Award” Nominations Sought
Cyndi Miracle
You are invited to participate in an exciting new awards program sponsored by the Virginia Chamber and Virginia Business Magazine.
The prestigious Virginia Torchbearer Awards will serve to highlight Virginia’s world class corporate citizens, old and new, and underscore our unparalleled attractiveness as a business location.
The purpose of this new award is to identify the companies that best exemplify the excellence that has made the Commonwealth the number one state in the nation for business. They must be innovators whose outstanding products, services and management practices have propelled Virginia’s progress and prosperity in recent years.
Five winners will be selected by a blue-ribbon panel of judges. There will be one overall state winner and four regional winners. The awards will be presented at a gala banquet following the Chamber’s Virginia Economic Summit event scheduled for October 29.
The deadline for Torchbearer Awards nominations is September 1. A nomination form may be obtained here.
2009 “Fantastic 50” Nominations Are Open
Karen Surmacewicz
Plans are underway to honor again 50 fast growing companies from around the state at a gala awards banquet to be held next spring.
The Virginia Chamber, along with our Signature Sponsors, Goodman & Company, SunTrust Bank, Virginia Business Magazine and Westfields Marriott, is proud to recognize small, entrepreneurial companies that are making substantial contributions to the Commonwealth’s economic vitality. Please view details on the 2008 recipients and the criteria for the awards program on our website. Nominate your company NOW or a deserving business you may be aware of here.
New/Revised Publications
2008 Membership Directory – Hot off the press! We are happy to announce that the 2008 Membership Directory will be mailed to members the first week in August.
The revised and much improved directory will be a tremendous resource to our members. A special thanks to our advertisers is in order. They provided the resources to bring you a more useful guide.
Our advertisers are Boar's Head Inn, Bon Secours Richmond Health System, FMT Cargo, GROW! Inc., Hirschler & Fleischler, PC, Kingsmill Resort & Conference Center, LEAD Virginia, Mariners Landing Resort, Massanutten Resort, The National Conference Center, Print Shack, SJE Parnters, SNVC, VisualCV, Inc.
To learn more about advertising in the 2009 Membership Directory, please contact Stephanie Pelletier.
Member News
Member of the month. The Virginia Chamber recognizes R.E. Daffan, Inc. as our Member of the Month. Congratulations!
Read more about R.E. Daffan’s award winning design and construction solutions here.
Members in the news. Take a look at what our members are up to now.
Members recognized in this issue include the Barter Theatre, Capital Results, Maple Leaf Bakery, Mariner’s Museum, and Smithfield Foods.
If you have news about your company that you would like to share with us and others, please send it in.
Upcoming Events
- 7th Annual Virginia Chamber Golf Classic – rescheduled to September 9. On Tuesday, September 9th, Mattaponi Springs Golf Club is set to host golfers from around the state for the Chamber’s 7th Annual Golf Classic. Team sponsorships are still available, along with other opportunities to bring recognition to your company. Sign up here for an enjoyable day of networking with other Virginia business leaders and to compete for a host of outstanding prizes from our generous sponsors. For more information, please contact Karen Surmacewicz at 804 237-1452.
- Virginia Congressional Luncheon – September 17. The Virginia Chamber is pleased to announce the business community’s salute to our Congressional delegation on September 17. The luncheon event will provide an opportunity for Chamber members to discuss national and international issues with federal policy-makers. Both Senators and a member of the House delegation are invited to address the luncheon guests. Michael A. Daniels, current Virginia Chamber Chairman and a consultant with SAIC in McLean, will also offer remarks. Please visit our website for information on purchasing a table or individual tickets. Companies purchasing tables may request a delegation member to be seated with their group. Space is limited. For more information, please contact Karen Surmacewicz
at 804 237-1452.
- Virginia Economic Summit - October 29. On October 29, the Virginia Chamber, in partnership with Virginia Business Magazine, will host a major economic development event in Richmond billed as the “2008 Virginia Economic Summit: Excellence and Opportunity.”
We hope you will join us as we welcome Virginia’s pre-eminent CEOs who will discuss what the Commonwealth can and must do to remain an outstanding place in which to do business. Confirmed speakers to date include: Hal Cramer, President, Fuels Marketing, ExxonMobil Corporation; Jack Nelson, President, Philip Morris USA; Mike Petters, President, Northrop Grumman Shipbuilding and Mike Daniels, Chairman, The Virginia Chamber of Commerce.
Additional corporate leaders from Virginia’s premier companies, including Capital One, Volkswagen America, Canon Virginia, MeadWestvaco and Goodyear, will participate as well on a regional panel discussing Virginia’s economic competitiveness in a global economy.
A glittering celebration banquet following the Summit will include the presentation of the prestigious Torchbearer Awards and remarks by popular political commentator, Dr. Robert Holsworth.
Please click here for program and registration information.
Calendar
August 15
Vote for Business Kickoff - Richmond
September 3
Committee on Natural Resources – Richmond
September 9
Virginia Chamber Golf Classic (rescheduled) – Mattaponi Springs Golf Course
September 17
Virginia Congressional Luncheon – Washington, D.C.
October 29
Virginia Economic Summit – Richmond
November 3
Climate Control Conference - Richmond
November 5-6
Board of Directors’ Meeting – Williamsburg
December 10
Fall Business Event - Richmond
January 28, 2009
Chamber Day at the Capitol – Richmond
Virginia Chamber Annual Meeting – Richmond
Old Dominion Assembly - Richmond
January 29
Board of Directors’ Meeting – Richmond
April 30
Fantastic 50 Awards Banquet - Chantilly
E-mail info@vachamber.com to be unsubscribed from the Virginia Chamber electronic newsletter(s).
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