Speaker: Gov. Glenn Youngkin
Statement: Virginia’s economic growth “has stalled at less than 1% per year for eight years.”
Date: Jan. 17
Gov. Glenn Youngkin says Virginia families, fighting to cope with inflation, don’t take solace in the state’s economic outlook.
“They see an economy whose growth has stalled at less than 1% per year for eight years,” Youngkin, a Republican, said in his maiden address to the General Assembly on Jan. 17.
We fact checked Youngkin’s claim about the state’s economic growth, which he made repeatedly during last year’s campaign, and found it credible, but a little low. Youngkin has pledged to charge Virginia’s growth by reducing regulations, cutting business taxes and expanding workforce training.
Youngkin’s percentage for the state’s economic growth comes from the U.S. Bureau of Economic Analysis, according to Macaulay Porter, his press secretary.
BEA statistics show the state’s gross domestic product – the total value of all finished goods and services produced in Virginia – grew from $458 billion at the start of 2014 to $596 billion at the end of September 2021 (the latest figure available). Over that period, Virginia’s economy averaged 3.3% growth each year, compounding to a total of 30.1%.
A more meaningful figure, however, comes from measuring Virginia’s growth in inflation-adjusted dollars.
Measured in 2012 dollars, Virginia’s GDP rose from $445 billion at the start of 2014 to $494 billion in September 2021. That’s an adjusted annual growth rate of about 1.3% – much closer to the “less than 1% per year,” Youngkin described.
Virginia ranked 27th among states in inflation-adjusted growth, according to the BEA.
Virginia also ranked near the middle among neighboring states. Here are the numbers for average annual GDP growth in adjusted dollars from 2014 through September 2021:
- Tennessee, 2.1%;
- North Carolina, 1.9%;
- Virginia, 1.3%;
- Maryland, 1%;
- Kentucky, 0.9%;
- West Virginia, 0.6%.
Nationally, GDP grew annually at an inflation-adjusted 2.0% rate, according to the BEA. The largest growth occurred in Western states.
A word on Virginia
Virginia’s economy is closely linked to federal spending, with a huge government contracting industry in Northern Virginia and the world’s largest naval base in Norfolk. “Seven out of $10 in Northern Virginia, Hampton Roads and Richmond have some tie to federal spending,” said Robert McNab, director of the Dragas Center for Economic Analysis and Policy at Old Dominion University.
The plus side is that the federal largesse protects Virginia from extreme economic downturns. The downside is Virginia is beholden to Washington. Economists say the state was slammed in the past decade by a federal sequestration program that automatically cut defense and domestic spending when Congress could not agree on a budget.
“Virginia’s becoming a mature state with slow but steady growth,” said Terry Rephann, regional economist with the Weldon Cooper Center for Public Service at the University of Virginia.
Recent governors have set goals to diversify Virginia’s economy in efforts to lessen its dependence on Washington.
Youngkin has accused the two Democratic governors before him of creating an unfriendly business climate. Democrats point out that CNBC has named Virginia “America’s Top State for Business” for two straight years.
Youngkin said Virginia’s economic growth “has stalled at less than 1% per year for eight years.” He’s a little low. The state’s inflation-adjusted GDP has grown by about 1.3% over the last eight years.
We rate Youngkin’s statement Mostly True.
Glenn Youngkin, Address to the General Assembly, Jan. 17, 2022
Email from Macaulay Porter, Youngkin’s press secretary, Feb. 4, 2022
U.S. Bureau of Economic Analysis, “Regional data, GDP and personal income,” accessed Feb. 9-10. 2022
Interview with Robert McNab, director of the Dragas Center for Economic Analysis and Policy at Old Dominion University, Feb. 10, 2022
Interview with Terry Rephann, regional economist with the Weldon Cooper Center for Public Service at the University of Virginia, Feb. 10, 2022
CNBC, “Virginia is back as America’s Top State for Business in 2021,” July 13, 2021
Credit: Source link