What Amazon means to Virginia: $3,200,000,000

Published 10:25 am Wednesday, November 21, 2018

That is how much new payroll that will be paid directly to employees each year over the first phase of having Amazon establish their new headquarters in Virginia. After the second planned phase, that number will jump to more than $5.7 billion. Those numbers are generated by Amazon’s commitment to pay on average $150,000 for each of the 25,000 employees they will hire. Each year of the first phase, after the build out, Virginia will receive $225 million in direct payroll taxes alone. That does not even consider any other factors such as sales taxes or other payroll taxes if a spouse takes a job elsewhere in Virginia.

We in the rest of Virginia will receive more than our share of those tax dollars because the formula for public school funding is heavily weighted to those counties, such as ours, that have less taxing ability locally.


Virginia’s higher education system will be a major recipient from this. First, the state will reward our colleges for expanding their efforts in the training of those skills that are needed in the technology fields. This dovetails well with our previous plans to beef up these programs throughout the state. Currently, without Amazon’s expansion, we knew that we were not training enough folks in these high paying fields. Some reports put that shortage at 60,000 statewide. Each of our universities can benefit from this greater focus on training of these technology skills.

Virginia Tech was very much in the middle of this effort. They agreed to invest heavily from their foundation (money that they raise privately) to establish a campus in Northern Virginia. This will serve that region and these skills well. Currently, many from Northern Virginia are traveling to Blacksburg for technology training. This will allow students the option of living on campus or living at home. At the same time, it will open up more space for more students around the Commonwealth.


Despite the issues addressed above, some will say this just affects Northern Virginia. There are other reasons that other parts of the state are currently and will continue to be advantaged. Currently there are 28,000 small and medium sized businesses that sell on Amazon. Throughout Virginia, folks are able to live in our communities and live a better quality of life without being part of the problems of the hustle and bustle of more metropolitan regions of the state and country.

One of the reasons that we believe Amazon looked favorably upon Virginia’s site is that Virginia has been a good place for them to invest in the past. Prior to this project, Amazon has invested $29 billion in the state and currently employs 8,500 around the Commonwealth. That investment has been all across the state, including a fulfillment center in Dinwiddie.

Despite all of this, there are some naysayers who do not believe we should offer any incentives to companies. In theory they are right, however, if we do not, then we will lose out to every other state that does. We have lost many prospective employers over the years, to the states to the south of us in particular, because our proposals have not matched theirs. This affects much of our region more than others because our region is much more oriented to manufacturing than other regions of the state. One such example was Volvo that looked at Greensville County but chose South Carolina’s incentive offer instead. If we want to have growing, thriving communities, we must compete. That is the world in which we live.

It was my honor to join Governor Northam in Northern Virginia at the announcement Tuesday. As Chairman of the Major Employment and Investment Project Approval Commission, MEI for short, I offered the General Assembly’s perspective on the project.

Frank Ruff represents Lunenburg in the state Senate. His email address is Sen.Ruff@ verizon.net.