CNBC Rankings + Virginia Bills + Offsetting Options
Post Malone w/ Morgan Wallen and The Who
The pomp and circumstance having subsided (along with most of the hangovers), it’s GO TIME back at the General Assembly.
During the campaign, Democrats made hay over Virginia’s drop in CNBC’s Top States for Business rankings.
If you didn't hear - Virginia fell from #1 to #4.
<cue gasp>
It’s a legitimate political shot to take; however, it might come back to haunt.
Sidebar - I have long told folks not to follow the CNBC rankings due to their ANNUAL changes in methodology. It’s literally hitting a moving target.
Be that as it may, Virginia - regardless of partisan persuasion - lines up well with the CNBC methodology.
The narrative of now Governor Abigail Spanberger’s campaign was affordability. Not surprisingly more people are impacted by daily costs than other issues that have been flushed down the pipes of electoral history.
Given the hyper partisan nature of political life these days, I consulted the magicians of AI platforms Claude and ChatGPT to opine on the likely impact on Virginia’s rankings in CNBC for 2026 should certain bills pass into law.
I also asked for mitigating policies that could offset any negative impact in those rankings so as to spur on the create juices before filing deadlines pass.
Again - I don’t think we should be managing the Commonwealth’s politics or economy based on CNBC’s rankings. Since they were part of the campaign (which I also advised folks NOT to do) this analysis was conducted and reviewed so that both parties could work together (stop laughing) as well as think long and hard about the economic competitiveness of Virginia.
Before we kick off.
CNBC ranked Virginia at #31 for Cost of Doing Business and #21 for Cost of Living.
3…2…1…
CNBC Top States for Business
Cumulative Policy Impact Analysis + Offsetting Policy Options
Executive summary
This memo consolidates the projected CNBC scorecard impacts of a combined policy package affecting labor costs, labor flexibility, and taxation, and then outlines a set of compensating reforms designed to stabilize (or improve) Virginia’s standing in CNBC’s Top States for Business rankings.
The analysis is framed to CNBC’s published category weights and the scoring logic described in the 2025 methodology.
Bottom line:
If Virginia enacted all of the following without major competitiveness offsets—(1) repeal Right-to-Work, (2) a $15/hour minimum wage, (3) a new paid-leave mandate, (4) a new sales tax on services, and (5) a 10% surtax on income above $1 million—Virginia would likely experience a material decline in categories that carry the most weight in CNBC’s index (Economy, Workforce, Cost of Doing Business, Business Friendliness).
Under typical peer-state comparisons, a plausible landing range would be approximately #12–#18 overall, with #14–#16 as a defensible midpoint, absent offsets.
Baseline: Virginia’s 2025 profile (high-level)
Virginia’s competitive strengths are concentrated in Education and Infrastructure, while its vulnerabilities are concentrated in Workforce, Cost of Doing Business, and (to a lesser extent) Economy.
The ranking framework heavily weights categories tied to growth, operating costs, and regulatory/labor climate.
CNBC category weights (2025 methodology)
Economy
445 (17.8%) - Largest weight; growth + fiscal condition + exposure risks
Infrastructure
405 (16.2%) - Virginia strength; must hold
Workforce
335 (13.4%) -Swing category; talent attraction + labor regime
Cost of Doing Business
295 (11.8%) - Virginia weakness; very sensitive to tax/labor costs
Business Friendliness
270 (10.8%) - Regulatory and legal climate; site selection signal
Quality of Life
265 (10.6%) - Talent attraction; worker protections + livability
Technology & Innovation
255 (10.2%) - Patents, AI/semiconductor ecosystem, R&D support
Education
110 (4.4%) - Virginia advantage; smaller weight but important differentiator
Access to Capital
60 (2.4%) - VC/lending; small weight
Cost of Living
60 (2.4%) - Small weight; interacts with workforce and cost stack
Cumulative policy stack analyzed
Repeal Right-to-Work
Increase minimum wage to $15/hour
Adopt a statewide paid-leave program (mandate)
Expand sales tax base to services (first-time)
Impose a 10% surtax on taxable income over $1 million
Projected direction of impact by CNBC category (net)
Economy (17.8%)
Down (moderate) Risk to job growth; business formation signals; higher cost stack; perception of policy risk
Economy is a top-weight category; modest decline matters
Infrastructure (16.2%)
Neutral - Package does not directly change infrastructure metrics
Virginia must hold this strength
Workforce (13.4%)
Down (net) - RTW repeal scored explicitly; higher mandated costs; mixed retention benefits from paid leave
Virginia is already vulnerable here; losses are costly
Cost of Doing Business (11.8%)
Down (sharp) - Higher labor costs + new mandates + tax expansion; higher compliance
Virginia is already weak; further decline is a major risk
Business Friendliness (10.8%)
Down (clear) - Signal of higher mandates and broader tax base; regulatory complexity
Category heavily influenced by “path of least resistance” perceptions
Quality of Life (10.6%)
Up (modest) -Paid leave and wage floor increase worker protections
Virginia already improved; marginal gains may be capped
Tech & Innovation (10.2%)
Flat to slightly down -Surtax affects founders/high earners; services tax affects technical/professional inputs
Risk is more about perception than immediate metrics
Education (4.4%)
Neutral - No direct effect (unless revenues are dedicated to measurable education outcomes)
Access to Capital (2.4%)
Slight down - High-income surtax may reduce in-state investor attractiveness at the margin
Cost of Living (2.4%)
Mixed/neutral - Higher wages help some households; services tax can raise prices
Likely overall ranking implication (illustrative)
Because the package applies downward pressure to multiple high-weight categories simultaneously—especially Cost of Doing Business, Workforce, and Business Friendliness—the most realistic expectation is a decline out of the Top 10 absent a major offset package.
A plausible landing range would be approximately #12–#18 overall, with #14–#16 as a defensible midpoint, assuming peer states hold their current policy posture and macro conditions are typical.
Offset options: policies that can stabilize or improve CNBC outcomes
Offsetting strategies must target the categories with the largest weights and the largest expected losses: Cost of Doing Business, Workforce, Economy, and Business Friendliness.
In practice, this means pairing worker-protection and tax changes with a visible, measurable competitiveness package that reduces friction, improves predictability, and lifts private-sector growth.
A. Cost-of-doing-business offsets (highest priority)
Revenue-neutral tax swap: if services are taxed, reduce the most salient business taxes/fees so the net burden does not rise for in-state employers.
Permit-to-Power guarantees: statutory timelines for major projects (site, environmental, interconnection), with public performance reporting.
Industrial power competitiveness: long-term pricing options and accelerated grid/interconnection upgrades for large users (manufacturing and compute).
Insurance cost moderation toolkit: mitigation credits, modernization of liability rules where appropriate, and stronger building/mitigation incentives (avoid blunt price caps).
Standardized, performance-based incentives: fewer bespoke deals; more transparent, ROI-tested incentives tied to wages, capital investment, and jobs.
B. Workforce offsets (restore competitiveness and talent attraction)
Credential Accelerator: tuition-free (or heavily subsidized) associate degrees and industry-recognized certificates aligned to employer demand.
Apprenticeship Surge: scale registered apprenticeships in construction trades, advanced manufacturing, logistics, and data infrastructure.
Talent Magnet package: relocation + housing/down-payment assistance tied to Virginia employment (target high-cost metro exports).
Productivity grants for mid-sized firms: support automation/AI adoption paired with worker upskilling to lift output per job.
Childcare capacity expansion: fast-track licensing and supply expansion in high-growth regions (supports participation and retention).
C. Economy offsets (private-sector growth + resilience)
Private-sector growth compact: measurable targets for private job growth in 3–4 resilient clusters (defense/cyber, logistics, life sciences manufacturing, data/energy supply chain).
Startup survival initiative: first-24-month supports, procurement onboarding, and licensing concierge to improve survival rates.
Export and tariff resilience: diversify trade partners and suppliers; support exporters to reduce concentration risk.
Fiscal resilience rule: protect reserves and credit posture; publish fiscal risk metrics to improve perceived stability.
D. Business friendliness offsets (reduce friction and uncertainty)
One-stop permitting and business portal: consolidate filings, permits, and compliance into a single pathway for employers.
Regulatory sunset reviews: periodic review/rollback of duplicative rules; publish a “regulatory burden” scorecard.
Fast-track land-use templates for workforce housing near job centers (carrots + model ordinances) to support labor supply without heavy preemption.
Clear, stable implementation schedules: phase-ins, safe harbors, and predictable effective dates to reduce “policy volatility” penalties.
Offset packages (two practical bundles)
Package 1: Rankings Stabilization (goal: remain Top 10)
Make tax changes revenue-neutral for employers (swap, not stack).
Permit-to-Power timelines + mega-site readiness funding.
Credential Accelerator + Apprenticeship Surge.
Industrial power competitiveness and interconnection acceleration.
Startup survival/procurement on-ramp program.
Package 2: Back-to-#1 Push (goal: reclaim #1 in 2–4 years)
All stabilization items, plus a measurable private-sector growth compact with quarterly reporting.
Business tax simplification that moves Virginia toward top-quartile competitiveness.
Aggressive talent magnet strategy tied to housing enablement near job centers.
Tech & innovation support that reduces reliance on federal research and increases patent/AI job momentum.
A public CNBC-metrics dashboard (Virginia FREE-style) to demonstrate momentum before the next ranking cycle.
Appendix: Suggested quarterly dashboard
Economy: private-sector job growth, GDP trend, new business formation, 2-year survival proxy, reserve ratio
Workforce: net migration of degree holders, credential completions, apprenticeship completions, output per job
Cost of Doing Business: permitting cycle time, tax compliance time proxy, industrial power interconnection time, insurance premium trend proxy
Hold-the-line: education outcomes, infrastructure reliability (power/broadband) and certified site inventory
If you’re still here - THANK YOU for caring about the Commonwealth as much as you do!
Now hit these two:


Where does the ranking land if the proposed bills pass/signed that affect our business climate?