Let’s be clear from the outset: Amazon’s decision to locate half of its vaunted “HQ2” in Northern Virginia is a good thing for the rest of Virginia, too.
As the saying goes, half a loaf is better than none and this is a mighty big loaf — the prospect of prospect of 25,000 jobs with average wages of at least $150,000.
There has not been a jobs announcement of that magnitude in Virginia since, well, ever.
It’s not just confined to Northern Virginia, either. A key part of Virginia’s incentives package was a pledge to increase funding for technology-related education at state universities and community colleges — to create a talent pipeline for Amazon. That’s a talent pipeline for other companies, too. Virginia Tech President Tim Sands says he expects 2,000 more students in Blacksburg as a result. That gives the Roanoke and New River valleys an increased opportunity to persuade some of those to stay and help grow the technology community here. In the state’s furthest corner, Donna Price Henry, the chancellor of the University of Virginia’s College at Wise, is already talking about the possibility of “virtual work situations” in her community.
Amazon’s decision to locate in Northern Virginia is good news for those of us on the other end of state in another way: This will generate more tax revenue for state coffers, an estimated $3.2 billion over 20 years. For all the proud declarations about how people in rural Virginia are strong and independent, the fiscal reality is that we’re dependent on Northern Virginia. Let’s make that even plainer: Northern Virginia subsidizes the rest of the state.
In most rural localities, the state pays most of the cost of operating our schools. The state share doesn’t really depend on the sales tax you pay at the grocery store; it depends on Northern Virginia — 75 percent of the state’s general fund revenues come from individual and corporate income taxes. In a state where the median household income in some Northern Virginia localities is double or even triple that in parts of Southwest Virginia, well, it’s pretty clear where those income taxes are coming from.
Scott County spends less on its students than any other school system in the state — $1,600 per student. That shouldn’t be surprising. The median household income there is $38,017, one of the lowest in the state. The state, though, pays $6,364 for each student in Scott County. In Buena Vista, the local government pays $1,622 per student, but the state pays $6,387. Once you factor in other sources of funds, the state is responsible for 65 percent of the school budget in Scott County and 62 percent in Buena Vista. Those localities and lots of others in rural Virginia ought to be thrilled by Amazon’s announcement. This represents the prospect — someday, maybe, indirectly — of more state funding.
They could use it, too. For all that the state spends on students in rural Virginia, rural students still don’t get as much spent on their education as students in affluent Northern Virginia do. In Scott County, there’s $9,740 spent on each student, most of it from the state. In Arlington, $19,797 is spent on each student, virtually all that from Arlington taxpayers (the state only pays $1,627 per student there).
You can’t always draw a straight line between the amount spent per capita and the quality of the education received, but you can draw a line of some sort. In Loudoun County, students are learning to write computer code as early as kindergarten. That’s not happening in rural Virginia. Perhaps someday some of those Amazon tax dollars will find their way there. That’s essentially a municipal form of trickle-down economics, but until Virginia decides to change the way it funds public schools, that’s what we’ve got.
Amazon’s decision to locate in Northern Virginia is potentially good for the rest of Virginia in other ways. Perhaps it will help position us for any spin-offs that might come along. Why do data centers have to be clustered in Northern Virginia, for instance?
Or perhaps Amazon CEO Jeff Bezos will simply notice us. Perhaps Bezos might wonder why there are schools in his new state where multiple localities have water leaking through the roof and ceiling tiles falling on students. Or that there’s one locality — Bristol — that has a school that’s been declared functionally obsolete. That school is also still in operation because Bristol can’t afford to fix it.
Amazon has already missed one opportunity to make a statement. There were 238 cities from across the United States, Canada and Mexico that made a bid for HQ2. Most understood they weren’t likely to win; they simply applied in hopes of attracting attention from other tech companies. (Ever so practical, Winnipeg filmed its application pitch and its concession statement on the same day.)
Amazon could have picked an unexpected contender in the heartland, some hard-luck city that would have been transformed by the arrival of a corporate headquarters. Instead, Amazon chose the Washington suburbs and New York — already two of the most affluent parts of the country. The rich get richer. Amazon could have helped break the trend of companies concentrating in a handful of hip metros; instead it doubled down, quite literally. So perhaps we shouldn’t hold out hope that Bezos will use his new Northern Virginia half-a-headquarters to show some interest in the rest of the state.
But we can show interest in him. Every mayor and supervisors chairman in this part of Virginia ought to be writing Bezos right now to welcome him to the state — and invite him for a visit. Every chamber of commerce ought to be inviting Bezos to come speak — on the off-chance he might actually agree. Virginia officials were eager to put together a bid to win his company; perhaps they’d respond just as quickly if someday Bezos asked why the schools in rural Virginia are funded so differently from ones in the part of Virginia he chose.
This may sound uncharitable. It’s not meant to be. It’s meant to be unvarnished. Amazon’s decision to locate in Northern Virginia is one of historic proportions. It underscores how the DC suburbs have become a technology capital and not just an adjunct of the federal government. It will further raise the national, nay, international profile of Virginia Tech —which announced plans for a $1 billion “innovation campus” in Alexandria as part of the deal. All that’s good for Virginia. The challenge will be to figure out how to make it good for all of Virginia, and not just Northern Virginia. And that’s on us, not Amazon.