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Federal cash is turning Virginia blue

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WhileVirginia boasts the highest percentage of federally funded private-sector jobs in the nation, “real” private enterprise in the commonwealth ranks second to last, a new report says.

Only 70.2 percent of Virginia jobs are free of government purse strings — coming in just ahead of New Mexico’s 68.1 percent. The national average is 80.8 percent.

On the flip side, nearly a third of Virginia workers are paid directly or indirectly with local, state or federal tax dollars — second highest behind New Mexico.

That dependence on government, says one political pundit, helps explain why the Old Dominion is electing more liberal Democrats statewide.

“No wonder Virginia is turning into a blue state,” writes James Bacon at the website, Bacon’s Rebellion.

Virginia’s proximity to, and dependence on, Washington, D.C., is a mixed bag, according to George Mason University’s Mercatus Center, which produced the study.

A steady diet of defense-related contracts kept cash flowing into Virginia during the so-called Great Recession. But the influx of money from across the Potomac “poses a long-term threat” because the cash flow is not sustainable, said Mercatus researcher Keith Hall.

Even if the largess remains unlimited, the result will be a badly splintered labor market – with northern Virginia raking in hefty salaries, and hardscrabble southern Virginia mired in double-digit unemployment.

Hall advises that Virginia diversify its labor market by depending less on federal support.

Gov.-elect Terry McAuliffe — who defeated Republican Ken Cuccinelli last month with incessant calls for more state spending — agrees Virginia has an economic challenge.

“We will continue to be the recipient of federal dollars. The challenge is to replace those assets with new business,” McAuliffe told a gathering of reporters in Richmond on Wednesday.

Read the rest of the article here.

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