Follow the Money

Virginia’s economic point man on the governor’s agenda, the state’s reliance on the Department of Defense, and how young people can prepare for the future.

One year into his term as governor, Democrat Terry McAuliffe is best known for his frustrating fight to expand Medicaid health care coverage to 400,000 uninsured Virginians. He lost his battle with General Assembly Republicans over expansion last year. When the legislature convened last week, he resumed combat.

Yet McAuliffe has been busy with other matters, namely ones on which he campaigned, such as drumming up new jobs and training to wean the state away from its dependence on government funding, especially for defense.

His biggest achievement has been landing Shandong Tralin, a Chinese company that will build a $2 billion advanced paper mill with 2,000 jobs in Chesterfield County. He also helped Richmond bag San Diego-based Stone Brewing Co. with state incentives that have angered some local businesses see it as an imbalance of support.

For a heads-up on the state’s economic front, Style spoke with Maurice Jones, McAuliffe’s secretary of commerce and trade. A Kenbridge native, Jones is a former deputy secretary of the U.S. Housing and Urban Development and former president of Pilot Media (which owns Style). He has a bachelor’s degree from Hampden-Sydney College, a law degree from the University of Virginia and was a Rhodes scholar at the University of Oxford.

Style: Gov. McAuliffe says there’s a crisis in the economy with federal cuts, sequestration. What is your take?

Jones: I wouldn’t describe it as a crisis. I would describe this as a real call to action. Our economy for years has been fueled overwhelmingly by the public sector. In fact, if you look at the top 20 employers, 13 of them are either the public sector or a public sector contractor. By the far the biggest employer in Virginia is the Department of Defense. You look at the data point last year, that last year in terms of economic growth, Virginia was 48th in the country, Maryland was 49th and the District of Columbia was 50 or 51. We share one thing in common: this huge economic engine that is the federal government. [But] it’s the Peyton Manning problem. In Denver, if Peyton Manning has a good day, they win. If Peyton Manning has a bad day, whew!

What are you doing to get this in balance?

We’re working on our infrastructure. We’re trying broadband expansion, which you must have in a healthy business environment. You need an energy plan with a balanced portfolio that is also affordable and keeps people’s energy costs the most competitive in the country. We need more reliable and affordable and abundant carrier service from our regional airports to New York, Chicago and the West Coast. You have to pick the right sectors to grow such as cyber security, advanced manufacturing, energy, biosciences and the information-technology arena. We need a toolbox to make sure the business climate is enriched, but we need to keep our taxes low, we need to keep our regulations smart.

How can you prepare for that?

We have to have the best-prepared work force for 21st-century jobs. We’re not taking any emphasis off of people getting degrees, but we estimated that 50 to 65 percent of the new jobs in the economy might not require a four-year degree. Over the next decade, Virginia will need to fill 1.5 million jobs. Five hundred thousand of those will be new jobs. Fifty to 65 percent will be jobs for which you will not need a four-year degree or a master’s degree or a doctorate, but you will need post-high-school training. You’ll need the right certification, the right licensing and the right apprenticeship training.

How many trips have you taken overseas?

England. To China twice. To South Korea, Hong Kong, Japan. We’ve met with 20 plus other representatives. We’re planning [the year’s] trips right now.

The biggest recruitment is Shandon Tralin. Can you talk a little about that?

It’s a $2 billion investment that will create 2,000 jobs in Chesterfield County. It is the largest green-field investment by China in the country. It is the largest job-producing investment in Virginia.

A lot of homegrown craft beer people and restaurateurs are upset that Stone Brewing got state help that they didn’t get.

I have received feedback from people who are in the industry now who are excited about having a Stone in our portfolio. In their eyes it cements Virginia’s reputation as one of the best states in the union for craft brewing. They see it as cementing the brand.

You have a lot of disillusionment among people in their 20s who don’t see the job opportunities that other generations have had.

First, people really need to think about there are multiple paths to opportunity. One may be to pursue a four-year degree. We’re saying, there are other paths — there are certifications and paths that are more affordable— they will be in great demand. You don’t have to pursue that four-year degree, at least not right away. We have the lowest unemployment in the Southeast, the third lowest east of the Mississippi. We have great colleges and 23 community colleges. I would tell every young person to make sure you look at every one of our assets.

The first session of the General Assembly was a rough one.

If you are looking at just health care. But we had significant accomplishments in that first session.

Which ones?

In the first session that enabled us to reallocate more dollars into economic development — the government also worked with [the General Assembly] in port and transportation. Those are pretty fundamental building blocks on the economic development side. They worked hand in hand on Shandong. I would not describe the first session as rough.

Dominion’s plans for the Atlantic Coast Pipeline and other natural gas pipelines have been controversial. What about forcing rights of way and fracking?

Having a natural gas pipeline that crosses into 13 counties and towns directly and then the opportunity to have extensions off them is a game changer. It is an opportunity to do something well. We have to do something fair for homeowners. When Lunenburg and Galax and Greensville and Nottoway get access to natural gas, the possibilities for them can’t be overstated. S


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