Two States: Haves and Have-Nots

Two States: Haves and Have-Nots

The Commonwealth of Virginia, which relies heavily on contributions from more affluent areas like Northern Virginia for funding, would face a financial crisis if Fairfax, Loudoun, Prince William and Arlington counties were to break off and form their own state, researchers say.

The Rural Virginia Poverty Commission, a group of researchers assigned to document the gap between rural and urban Virginia, found that in 1998, almost $400 million were transferred from affluent counties to rural or inner city jurisdictions. That money is essential to support local services in poorer counties, said Wayne Purcell, a professor of agriculture and applied economics at Virginia Tech and a member of the commission.

"It keeps the schools open," he said.

Purcell and others have identified a growing gap between more affluent localities and less affluent ones.

"We have two Virginias," he said. "The haves and the have-nots."

To some extent, the difference between the wealthier and less wealthy jurisdictions is not unique to Virginia. All states are going to redistribute wealth from more developed urban areas to struggling rural localities. According to John Knapp of the Weldon Cooper Center for Public Service, a research group based at the University of Virginia, "You're going to have some degree of redistribution if you have a state mandate for education."

NORTHERN VIRGINIA represents half of net new economic growth thanks to new jobs which generate more income tax and sales tax for Richmond.

Most of the economic growth in the rest of the Commonwealth comes from fixed income sources such as retirement checks which are not taxed or spent the same way, said Stephen Fuller, a professor of public policy and regional development at George Mason University.

"The economy of the rest of the state is in pretty bad shape," he said.

Fuller added that the difference in the average salary between Northern Virginia and the rest of the state which stood at $7,100 in 1998 will grow to $11,000 by 2010. That widening gap would not close if Northern Virginia were to become its own state. Quite the opposite, said Fuller.

"Economic differences are going to grow if Northern Virginia were its own state. It would have these funds, it wouldn't have to underwrite the rest of the state. … It would make the rest of the state look like Mississippi," he said. Education, parks and other services would see a drastic cut in their budgets. "It would gut the public services in the rest of the state," said Fuller.

SEN. LESLIE BYRNE (D-34) took issue with the idea that the rest of the state would be devastated to lose Northern Virginia and would fight to keep it part of the Commonwealth. "Some legislators I've run into would be glad to wash their hands of us," she said.

The rest of Virginia is not in such bad economic shape as it is often made out to be, she said. There are other economic centers that could afford to maintain public services in poorer parts of Virginia without help from Northern Virginia. "Tidewater's no slouch. ... The Richmond area has a large banking community," she said. "It's not like the rest of the state is Tobacco Row."

Secession also presents some moral questions, said Knapp. "There is some concern about your fellow man elsewhere in the state. Are people in Northern Virginia more concerned about people across the Potomac or in D.C. or in Southside Virginia?"

"There are truly statewide institutions that one would think would be important to people in Northern Virginia."

While secession would not be in the state's best interest, Purcell predicted that the current system would not alleviate the gap between the two Virginias, causing political frustration on the part of Northern Virginians.

"This divergence is going to continue to grow," he said. "The transfer of revenue is going to get so big that it will become politically untenable." If not calling for outright secession, Northern Virginians are going to demand more local funding for local budgets, he said.