As Virginia’s chief economic pitchman, Gov. Glenn Youngkin (R-VA) has a challenge: how to advance the commonwealth's interests while holding an institutionally weak hand of cards.
By law, the Virginia governor may not serve consecutive four-year terms, which made him a bit of a lame duck from Day One in January 2022. He can veto bills but has no budget-writing authority, as do some governors. And the Virginia executive is always, to a degree, dependent on the political winds blowing from nearby Washington, D.C.
The Republican former businessman has tried and failed to capture the state legislature for his party. Youngkin got close in November 2021 when he was elected. Republicans gained seven seats and control of the House of Delegates, putting them in striking distance of a trifecta.
Youngkin raised a reported $30 million to contest the 2023 state Senate and House of Delegate elections. Though Republicans beat the historical averages, they still came up short. Democrats retained a state Senate majority and gained just enough seats, 51, to win an edge in the 100-seat House of Delegates.
Now, Youngkin is seeking to harness national political winds for some added power. Unlike many governors, he has signaled to President-elect Donald Trump's administration that his state is open for business.
Youngkin, for instance, in a December 2024 news release, announced that Virginia was “NOT a sanctuary state” for illegal immigrants, particularly violent criminals. He promised to “cut off funding” to localities that insist otherwise.
Youngkin also took the unexpected step of cutting an ad giving a warm welcome to new executive branch officials in Trump's second, nonconsecutive administration.
“To the new members of President Trump’s administration moving to the area, I want to personally invite you to make Virginia your home,” Youngkin said in the ad. “Virginia is right across the Potomac. We offer a great quality of life — safe communities, award-winning schools where parents matter, and lower taxes than D.C. or Maryland.”
Granted, the invitation was consistent with a new trend that commenced under Youngkin. The census data are mixed, but there is now likely more domestic in-migration than folks moving away for the first time in about a decade. It was an extraordinary gesture all the same.
Trump has acknowledged Youngkin’s support in the past and reciprocated. One of his last rallies on the 2024 campaign trail, the weekend before voting, was not in one of the seven swing states that the election hinged on but rather in Roanoke, Virginia.
The rally was part of the Trump campaign’s late strategy of threatening and trying to flip states that the Democratic presidential nominee, Vice President Kamala Harris, had marked as safe. Though Virginia’s 13 Electoral College votes went to Harris, it was a closer run than in 2020, when President Joe Biden walked away with 54.1% of the vote.
This time out, Harris received only 51.8% of votes cast, a margin of about 200,000 votes over Trump. This closer-than-expected showing signaled that Virginia might be vulnerable to greater Republican gains in 2025’s off-year elections.
Youngkin’s progress and logjamsThat would be welcome news to Youngkin. Some observers give him decent, though not spectacular, marks and note the political difficulty he has faced.
The Cato Institute awarded him a respectable B on its governors' report card for 2024, noting that the former “long-time executive at the Carlyle Group, a global investment firm” was the “first Republican to win a statewide election in Virginia in more than a decade.”
In 2022, the year Youngkin took office, he signed legislation cutting income taxes. These cuts “provided about $1 billion in benefits,” Cato reported, “although they did little to support long-term economic growth.”
The particular mix of reforms that Youngkin signed off on included earned-income tax credits, a less heavy tax on military retirees, temporary standard deductions, and the nixing of the state’s 1.5% grocery tax. That last item cut about $270 million yearly off grocery bills. Tax rebates that the governor approved also returned about $1.5 billion to Virginia households.
Then things stalled out, from a reformist perspective. In 2023, with state elections looming, Cato notes, Youngkin proposed a tax swap that would have put up sales taxes slightly but cut the top income tax rate from 5.7% to 5.1%. He also suggested scrapping Virginia’s annual car tax. Both proposals went nowhere, and the final budget for 2023 had no major tax changes to speak of.
There were no major changes because state Democrats dug in, and they managed to scuttle Youngkin’s hope of relocating the Washington Capitals and Wizards to Alexandria, Virginia, in the process. Rather than punishing them for their resistance, voters rewarded Democrats instead.
Youngkin, 58, hopes to make the sale to voters for Republican control, eventually. In the meantime, he has put considerable effort into wooing businesses to Virginia and wooing the Trump administration as well.
Time will tell what the Trump overtures yield for Virginia. In the meantime, Youngkin can boast some success at wooing business. On New Year’s Eve, his administration announced its “Top 10 Wins” for Virginia in 2024. Among those wins were “nearly $90 billion in investment commitments from businesses since 2022,” 10,000 business startups, and Virginia being named the top state for business by CNBC.
The commonwealth’s tourism slogan is “Virginia is for lovers.” Youngkin is lavishing the state’s institutional equivalent of love on business. “Virginia’s made giant strides in business-ready sites, workforce development, regulatory reduction, infrastructure investment, and all-of-the-above power solutions,” was how Youngkin explained the best-state-for-business laurel.
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For now, things seem to be working out fine fiscally. The Youngkin administration recently boasted of the third year running with a tax surplus of over $1 billion. But Virginians could pay a long-term price for some of that business development as tax credits and other abatements gradually eat into the state’s tax base.
“Virginia spent $3.0 billion on 92 economic development incentive programs” from fiscal 2013 to fiscal 2022, a 2023 Virginia Joint Legislative Audit and Review Commission study found. The report also highlighted how fast these crony deals have grown, with “almost half of the currently active incentives [being] adopted since 2010.”
Jeremy Lott is the author of The Warm Bucket Brigade: The Story of the American Vice-Presidency.