Building a 21st Century Economy: A Conversation With U.S. Governors

State Economic Strategies & Job Growth

• Colorado (Gov. Hickenlooper):
  • Adopted a "pro-business" brand strategy focusing on frictionless business creation and high environmental standards (e.g., first state to regulate methane emissions).
  • Attracted $20 billion company Arrow Electronics by maintaining active partnership post-relocation rather than treating it as a transactional event.
  • Targeting "millennial" retention by leveraging lifestyle factors: 300 days of sunshine, 300+ live music venues (exceeding Austin/Nashville), and inclusivity.
  • Pursuing an "Agricultural Silicon Valley" identity, focusing on advanced manufacturing, robotics, and geospatial technology to drive youth employment.
• Virginia (Gov. McAuliffe):
  • Maintained a 6% corporate tax rate (unchanged for 43 years) while securing $6.4 billion in new economic development commitments in the first year of office.
  • Facing $9.8 billion in federal defense cuts (sequestration); pivoting to diversify the economy beyond defense reliance into cyber security and biosciences.
  • Launched a Governor's Bio Conference inviting 400 global companies to the state.
  • Identifying cybersecurity and biosciences (human genome sequencing) as primary growth sectors.
• North Carolina (Gov. McCrory):
  • Proposed a $2.8 billion bond referendum for infrastructure (roads, rail, ports, universities) to proactively prepare for the state's population growth rate (exceeding the national average).
  • Focusing on manufacturing "reshoring" by competing against China via energy costs and logistics, rather than low labor costs alone.
  • Offering in-state tuition to veterans returning from Afghanistan/Iraq to secure a skilled workforce.
  • Emphasizing a diverse economy (agriculture, biotech, manufacturing, finance, logistics) to buffer against sector-specific shocks.
• Nebraska (Gov. Ricketts):
  • Recorded a 2.6% unemployment rate, the lowest in the nation.
  • Prioritizing agriculture and manufacturing, with a specific trade mission to Asia and Europe scheduled for June to address rising global food demand (projected 2 billion additional people by 2050).
  • Highlighting high-paying skilled trades: electricians with two-year degrees can earn $22–$28/hour immediately, translating to ~$56,000/year with benefits.

Workforce Development & Education Reform

• Universal Skills Gap: All governors identified a critical mismatch between available jobs (e.g., 30,000 open tech jobs in Northern Virginia) and local worker skill sets, rather than a lack of labor.
• Credentialing vs. Degrees:
  • Shift from 4-year degree emphasis to competency-based credentialing and apprenticeships.
  • Gov. McAuliffe noted 60% of job growth requires less than a 4-year degree; Gov. McCrory cited the average mechanic age (57–58) as evidence of a generational skills deficit.
  • Gov. Hickenlooper highlighted the "Colorado Paradox": high overall college attainment but significant completion gaps among minority populations.
• Early Childhood Education:
  • Consensus on the necessity of pre-K, citing that failure to read by 3rd grade correlates with future dropout rates.
  • Governor Ricketts: Prefers state-led solutions over federal pre-K programs, citing bureaucratic bloat and questions regarding the long-term efficacy of programs like Head Start.
  • Governors Hickenlooper & McAuliffe: Advocate for starting early to close attainment gaps among non-white youth, noting K-12 populations in NC (46%), VA (44%), and CO (43%) are already nearing majority-minority status.
• Veterans & At-Risk Populations:
  • Virginia (30,000 veterans, highest per capita) is leveraging military training for immediate credentialing and apprenticeships to fill the skills gap.
  • Nebraska plans to transition its unemployment system into a "re-employment system" to connect out-of-work citizens with available skills training (72% workforce participation, but 25% of potential workers inactive).

Federal Relations & Policy Divergence

• Washington Stalemate: Governors uniformly criticized federal gridlock as detrimental to global competitiveness, specifically citing:
  • Infrastructure: Lack of long-term transportation funding forces states to "put out fires" annually rather than plan 20–25 years ahead.
  • Sequestration: Described as a "bludgeon" hurting defense budgets and medical research (NIH funding at historical lows).
  • Energy: Calls for federal revenue sharing on offshore development and simplified permitting processes.
• Healthcare (ACA/Medicaid):
  • Colorado (Hickenlooper): Expanded Medicaid; reports positive economic impact by reducing ER visits and adding workers to the economy; views it as a cost-efficiency win despite implementation bumps.
  • Virginia (McAuliffe): Aggressively expanding Medicaid to recoup $1.8 billion/year for the state economy; attributes political hurdles to the "Tea Party" influence on Republican legislators.
  • North Carolina (McCrory): Open to expansion only via state-specific waivers for work/training requirements; currently blocked by the Obama administration.
  • Nebraska (Ricketts): Refused to expand Medicaid, citing fear of long-term federal liability and unreliable funding promises (e.g., federal special education match dropped from 40% to 20%).
• Common Core:
  • Virginia: Reviewing implementation to reduce excessive testing that forces "teaching to the test."
  • Colorado: Modified standards to "Colorado Core" to maintain high standards while reducing test volume.
  • Consensus: Support for high, internationally competitive standards, but opposition to federal mandates that disrupt local pedagogical autonomy.

Energy & Environment

• EPA Carbon Regulations:
  • Nebraska & North Carolina: Suing the EPA, arguing the agency is overstepping statutory authority (citing "Waters of the U.S." rule overreach) and failing to account for state-specific energy needs.
  • Colorado: Submitting a plan; prioritizing a transition to natural gas and renewables while acknowledging climate change impacts regardless of cause.
  • Virginia: Supportive of emission reductions but lobbying for credit for nuclear power, noting it comprises 41–45% of the state's mix with zero emissions.
• Pipeline Infrastructure:
  • Nebraska: Awaiting State Department approval for a major oil pipeline (potential 3,000 construction jobs, 300 permanent) to boost local property tax bases and enhance energy security.
  • Virginia & North Carolina: Collaborating on a natural gas pipeline project to lower electricity costs and attract industry, despite anticipated NIMBY (Not In My Backyard) opposition.

Social Issues & Public Safety

• Marijuana Legalization:
  • Colorado: Legalized; generates ~$70 million annually; revenue reserved for unintended consequences rather than education spending; concern over high-THC edibles and brain development in teens.
  • Nebraska: Experiencing cross-border crime spillover (drug-fueled violence) from Colorado; advocates for a "wait and see" approach regarding legalization.
  • Virginia: Legalization opposed for recreational use; approved THC oil for pediatric epilepsy (medicinal use only).
• Addiction Crisis:
  • All governors identified heroin and prescription drug addiction as a critical economic and social threat, linking it to workforce decline and mental health costs (approx. 25–28% of state budgets).
  • Governor McAuliffe noted addiction is "glorified" in media and requires immediate, non-partisan intervention.
• Religious Freedom Acts:
  • North Carolina: Withdrawn a proposed Religious Freedom Restoration Act following business backlash similar to Indiana's; focused on avoiding discrimination to attract Fortune 500 companies.
  • Virginia: Moved to distance state from discriminatory social legislation, emphasizing marriage equality and women's rights to appeal to corporate recruiters.