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)

1. Make tax changes revenue-neutral for employers (swap, not stack).

2. Permit-to-Power timelines + mega-site readiness funding.

3. Credential Accelerator + Apprenticeship Surge.

4. Industrial power competitiveness and interconnection acceleration.

5. Startup survival/procurement on-ramp program.

Package 2: Back-to-#1 Push (goal: reclaim #1 in 2–4 years)

6. All stabilization items, plus a measurable private-sector growth compact with quarterly reporting.

7. Business tax simplification that moves Virginia toward top-quartile competitiveness.

8. Aggressive talent magnet strategy tied to housing enablement near job centers.

9. Tech & innovation support that reduces reliance on federal research and increases patent/AI job momentum.

10. 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: