The economy in Newport News, Virginia, is booming. The Port of Virginia just celebrated is best year on record for container volume, taking in 2.84 million twenty-foot equivalent units (TEUs), boasting a seven percent year-over-year increase, according to a report by the Virginian-Pilot. The port enters into the record books a sixth year in a row of increasing TEU volumes, a run that started in 2012.
Economic growth in Virginia is increasing. Currently, the Port of Virginia hosts nearly 374,000 jobs, or 9.4 percent of Virginia’s workforce. Over $1.6 billion of total merchandise is received in the port’s Foreign Trade Zone 20 every year, as stated by The Port of Virginia website.
Loaded-import TEUs for last year were up 8.6 percent from 2016, while loaded exports increased by about 1 percent. John F. Reinhart, CEO and executive director of the Virginia Port Authority, released a statement saying, “In 2017, we moved 185,000 more TEUs than we did in 2016, which until now, was our highest volume year on record.” Reinhart also explained that the record growth comes just as the Port of Virginia is undertaking the biggest infrastructure project since its inception. $320 million has been allotted for the much-needed expansion of Portsmouth’s Virginia International Gateway and the proliferation of the Norfolk International Terminals facility, which was assisted helped by a state-funded bond package worth $350 million.
After the massive increase in container volume in 2017, the Port of Virginia as well as Portsmouth Marine Terminal is operating just under full capacity – around three million TEUs. As the report stated, last year, “truck-container volume growth outpaced rail volume growth 9 percent to 3.4 percent, respectively, year over year.
The Port of Virginia is also going to get a large economic bolster from new shipbuilding requests. This time from Washington.
36 members of Congress want to inject even more money into the Newport News economy buy vying for funding for Virginia-class submarines amid the pending construction of a brand new fleet of Colombia-class subs which are critically important to the shore’s shipbuilding economy. As a part of President Donald Trump’s promise to rebuild America’s military, the U.S. Navy will be relying on Newport News to host the military’s newest additions.
The push by Republican and Democrat lawmakers comes from those in both Virginia and New England states, the two areas in the U.S. that build nuclear-powered submarines for the Navy. Lead sponsor and head of the House Armed Services Committee Congressman Rob Wittman (R-VA) was joined by two more House members, Joe Courtney (D-CT) and Jim Jim Langevin (R-RI). A letter was sent in early January to the House Appropriations defense subcommittee for funding.
For 2018, Congress authorized $5.9 billion for Virginia-class submarine construction projects, $698 million over President Trump’s budget request. The letter signed by the Northern Neck Republican and others urges the appropriations committee to fund construction in line with the authorized level “to the maximum extent possible,” according to Daily Press.
The additional $698 million will have great implications for the economy of Newport News, both short term and long term. Funding the full budget would allow the U.S. Navy to order more submarines, part of the military’s goal of a 355-ship fleet. Construction on the new submarines is set to begin in 2021 and has a deadline in 2031.
The Port of Virginia is not only an economic indicator for the commonwealth, but for the nation as well. In 2017, the port added 5,525 jobs while increasing numbers to record intake and output.
With the signing of the Tax Cut and Jobs Act, port authorities and marine terminal operators around the country scored a win on new private activity bonds, a funding mechanism used to finance infrastructure and other capital projects. In a report from TT News, since all of the major Class I railroads are C corporations, their federal income tax rates were lowered to 21 percent. Prior to Trump’s tax bill, Class I railroads paid on average a 33.5 percent effective federal tax rate, which climbed higher to nearly 37 percent when state taxes were included. With a much more business-friendly tax environment and a globally competitive corporate tax rate of 21 percent economic growth will continue to strengthen the Port of Virginia and allow Newport News to remain an economic stronghold in the U.S.
