Republican candidate for governor of Virginia Glenn Youngkin rallies with supporters on a campaign bus tour stop in Charlottesville, Virginia, U.S. October 29, 2021.
Jonathan Ernst | Reuters
Former business executive Glenn Youngkin won back the Virginia governor’s office for Republicans in part by touting his private-sector experience.
As the soon-to-be 74th governor of the state, he has several ambitious business campaign promises to fulfill. Succeeding Democratic Gov. Ralph Northam while promising a departure from the current administration on economic policy, Youngkin will try to keep the momentum going for a state chosen as the best in the U.S. for business in CNBC’s 2021 rankings.
Youngkin’s victory marks a sharp turn in a state that has leaned blue over the past decade. President Joe Biden won it last year by a 10-percentage point margin.
A political newcomer who has never held elected office, Youngkin sold himself as a businessman who can approach the Old Dominion’s hot-button issues in a new, “common-sense” way. He has argued that handling Virginia’s economy would be right in his wheelhouse.
As the state’s hotly contested gubernatorial race comes to a close, here’s what to know about Youngkin’s business background and campaign promises.
Youngkin’s business roots
Youngkin, a Virginia native and multi-millionaire, was a big player in the business world before entering the political field.
The Rice University alumnus spent his early career handling mergers and acquisitions at investment bank Credit Suisse First Boston in 1990. After obtaining his MBA from Harvard University, he spent one year at management consulting firm McKinsey & Company before joining the Carlyle Group, a private equity firm, in 1995.
There, he led buyout deals in the U.K. and the firm’s initial public offering in 2012. He climbed the ranks at Carlyle and became one of its chief executives in 2018.
Before stepping down in 2020 after a 25-year tenure at the firm, Youngkin oversaw Carlyle’s real estate, energy, infrastructure and investment solutions businesses.
He steered the firm to lead the $12 billion redevelopment of Terminal 1 at JFK Airport in New York City, one of the largest infrastructure projects in the nation.
Youngkin made his business resume a major part of his pitch to Virginia voters this year.
His campaign website touts his “key role” in making the Carlyle Group one of the “leading investment firms in the world.” It claims that he played a critical role in funding the retirement of frontline public workers and supported hundreds of thousands of American jobs.
But unnamed sources from the firm have chafed over the picture Youngkin has painted of his leadership at the firm, according to Bloomberg.
Sources told Bloomberg that Youngkin racked up several bad investments that cost Carlyle billions of dollars before he “flamed out” as CEO. They cited “troubled forays” into hedge funds and energy investments over the last decade, as well as infrastructure projects he oversaw “that dogged him.”
Other reports detailed how Youngkin’s leadership at Carlyle hurt nursing homes and other institutions the firm acquired.
In 2018, the Washington Post revealed widespread neglect at a nursing home chain the firm owned. The report detailed increased health risks, skyrocketing health-code violations and hundreds of layoffs at the ManorCare chain before it filed for bankruptcy.
McAuliffe seized on this controversy during his campaign. During the second gubernatorial debate, he said the Carlyle Group “bought nursing homes” and “neglected seniors” under Youngkin’s leadership.
The Youngkin campaign did not immediately respond to a request to comment on criticism of the governor-elect’s business record.
Despite the scrutiny his resume has drawn, some experts say Youngkin’s business background was likely part of what appealed to Virginia voters.
“I think his background did boost his appeal,” said Chris Stirewalt, a senior fellow at the conservative-leaning American Enterprise Institute. “We certainly live in a time where business experience could be seen as a liability. But in Glenn Youngkin’s case, he came from Carlyle, what some still consider a very well established company.”
“Coming from that world certainly sent the cue to voters that he was no kook,” Stirewalt continued.
Karen Hult, a political science professor at Virginia Tech, also noted that Youngkin’s business background may have been important to Virginia voters who are concerned about the state economy.
She noted that his win points to the value of Youngkin’s “non-national” campaign strategy.
While McAuliffe pursued a “national strategy” that rallied voters around issues like former President Donald Trump, Youngkin focused on “closer-to-the voter” concerns such as taxes and education, Hult said.
Jobs in the Old Dominion
Virginia has fared well in weathering the economic damage from the Covid pandemic, according to Hult.
The state’s seasonally adjusted unemployment rate dropped to 3.8% in September, 2.8 percentage points lower than the previous year, according to the Virginia Employment Commission. It came in below the national rate of 4.8%.
The state also saw job gains from the previous year in nine of 11 major employment divisions on a seasonally adjusted basis.
Despite the relative health of Virginia’s economy, jobs were a top issue among the state’s voters this year.
A Monmouth University poll conducted in late October found that 45% of registered voters surveyed thought “jobs and the economy” were the most or second most important factor in their vote for governor. When asked which candidate would handle “jobs and the economy” better, 39% said Youngkin would and 34% said McAuliffe.
On the campaign trail, Youngkin promised job creation.
The Republican has said he aims to add 400,000 jobs and 10,000 start-ups in Virginia by cutting regulations and making the commonwealth an easy state to start a business.
“On day one, we’re going to jumpstart our jobs and reinvigorate the economy so it lifts up all Virginians,” Youngkin told supporters early Wednesday following his win. “Growing 400,000 new jobs, fostering 10,000 start-up businesses. Friends, Virginia will be open for business.”
McAuliffe used Youngkin’s business resume to try to undercut his pledges to create jobs.
At the second gubernatorial debate in September, the Democratic candidate blasted Youngkin for reportedly offshoring thousands of American jobs while CEO of the Carlyle Group.
“I have a record of creating high-paying jobs,” McAuliffe said. “Your record at Carlyle is outsourcing jobs to foreign countries, that’s your record, we don’t need that here in the Commonwealth of Virginia.”
The president of the Virginia AFL-CIO, the largest federation of unions in the U.S., echoed McAuliffe’s sentiment earlier this year.
“There’s no two-ways about it: Glenn Youngkin’s so-called leadership led to American jobs being shipped overseas,” Virginia AFL-CIO President Doris Crouse-Mays said in July.
“Today I want to be unequivocally clear: anyone who has spent their entire career gutting American jobs is the wrong choice to lead our commonwealth,” she continued.
Youngkin called the outsourcing accusations “bogus” at the second gubernatorial debate.
Slashing Virginia taxes
State taxes are another major issue for Virginia’s voters.
The Monmouth University poll found that 19% of registered voters surveyed thought taxes were the most or second most important factor in their vote for governor. When asked which candidate would handle taxes better, 40% said Youngkin would and 30% said McAuliffe would.
While CNBC’s state rankings did not examine taxes in Virginia, some research organizations rank the state low for its tax climate.
The Tax Foundation, a right-leaning independent tax policy research organization, ranked Virginia #26 out of all 50 states in its 2021 index. The commonwealth scored low points in almost all categories, including individual income taxes, property taxes and sales taxes.
Taxes were the major state-level topic of debate between Youngkin and his Democratic counterpart.
When asked during the final gubernatorial debate last month about Virginia’s historic $2.6 billion surplus, Youngkin called it the result of over-taxation.
“What I believe is that money belongs to Virginia, not Terry McAuliffe,” Youngkin said at the debate. “[Democrats] will overtax us by $2.6 billion again, they are piling tax upon tax.”
Youngkin’s campaign has proposed major tax cuts.
In his “Day One” plan, he pledged to reduce taxes on veteran retirement pay, eliminate the state grocery tax, suspend a recent gas tax hike for 12 months and provide a one time tax rebate of $600 for joint tax filers and $300 for individuals.
“On day one, we will declare the largest tax refund in the history of Virginia,” Youngkin told his supporters at a rally following his victory.
He to require voter approval for any property-tax increases. Youngkin also pledged to reduce individual income taxes by doubling the standard deduction.
Doubling the deduction would cost the state, Politifact reported, citing Anne Oman, staff director of Virginia’s House Appropriations Committee. The state would lose an estimated $1.2 billion in the first year if the policy took effect and $875 million a year afterwards, according to Politifact.
McAuliffe’s campaign called the tax proposals “crazy,” arguing that they would decrease funding for public schools and devastate Virginia’s economy.
“All of Glenn Youngkin’s Trumpian tax plans have one thing in common: they would lead to drastic cuts to public education and drive Virginia’s economy into a ditch,” McAuliffe spokesperson Christina Freundlich said in a statement.
Education in the commonwealth
Education was a hot-button issue that Youngkin used to mobilize voters. Many Virginians viewed it as a top concern.
The Monmouth University poll found that 41% of registered voters surveyed thought “education and schools” were the most or second most important factor in their vote for governor. When asked which candidate would handle education and schools better, 39% said Youngkin would and 38% said McAuliffe would.
Education was ranked the state’s strongest category in CNBC’s analysis. Virginia’s public schools have consistently performed well in terms of test scores, and its higher education system is reliably funded, according to the analysis.
The coronavirus appeared to make education a bigger priority for many voters.
Youngkin made schools and education a key part of his campaign, arguing that Virginia students have fallen behind due to extended school closings during the pandemic, “lower school standards” and political agendas.
He has proposed to roll out what his campaign bills as the largest education budget in the commonwealth’s history.
Youngkin also pledged to keep schools open five days a week, assist students in getting college or career ready and create at least 20 new charter schools across the K-12 grade levels.
“On Day One, we’re going to work,” Youngkin said to voters after his win early Wednesday. “We’re going to restore excellence in our schools.”
In addition to his education budget and other promises for schools, Youngkin has vowed to implement parental input in school curriculum. McAuliffe faced backlash over the issue.
Youngkin seized on McAuliffe’s opposition to parental control over what schools teach, releasing an avalanche of television ads that characterize the Democratic candidate as “putting politics over parents.”
“We’re going to press forward with a curriculum that includes listening to parents’ input, a curriculum that allows our children to run as fast as they can, teaching them how to think, enabling their dreams to soar,” Youngkin said during his victory speech on Wednesday.
