Monthly Archives: February 2012

Bad Days for Mickey D.

Posted on February 22, 2012 by | 4 comments

By Peter Galuszka

There must be considerable gnashing of teeth in the Governor’s Mansion. Robert F. McDonnell had been working so hard to distance himself from his social conservative past, notably that nettlesome and Neanderthal anti-gay and anti-female graduate thesis.

He had worked hard to remake himself as a reasonable moderate, thus setting himself up for the Big Time, namely a vice presidential slot. Up to now, things had been looking good. True, his plans to privatize state liquor stores and erect offshore oil platforms have gone nowhere, but McDonnell has enjoyed strong popularity ratings and has received a fair number of invites on national TV talk shows.

This Republican-dominated General Assembly, however, is helping destroy a lot of his hard work. Virginia is getting negative national attention for such mindless, hard right policies such as lifting sales restrictions on handguns and forcing women seeking a legal abortion to pay for a trans-vaginal ultrasound test. Legislators have slapped gay couples across their cheeks by making it harder for them to adopt children. ”Foreign” looking people must go through citizenship checks if they are stopped by police who don’t who don’t have the time, money or will to do so.

Virginia has already made the “Really” segment of Saturday Night Live and now Jon Stewart is sniffing around. But there’s more to Mickey D’s woes. Wild man Atty. Gen. Kenneth Cuccinelli has bucked the state GOP establishment and is running for governor when Republican power brokers had already hand-picked affable Lt. Gov. Bill Bolling. An even bigger-time wingnut, Bob Marshall, is running for Senate, challenging GOP favorite George Allen. Neither move helps McDonnell.

The blogosphere is rife with rumors that Mickey D is considering some serious backpedalling. Norman Leahy, always a reliable source, reports that some Republican legislators and McDonnell are brainstorming schemes to weaken or delay the ultrasound fiasco, that has brought more than 1,000 protestors to Capitol Hill, not an ordinary event in genteel Richmond. Leahy quotes political insider Paul Goldman as saying, “You don’t get selected the VEEP on a winning political ticket when Saturday Night Live skits are part of the package put together by a Presidential nominee’s team vetting running mates.”

That raises another question. Which candidate would McDonnell serve as VP candidate? The easy answer had been Mitt Romney. But things aren’t going so well for Romney right now. As for Rick Santorum, the last thing they’d need is a VP with as much social conservative baggage as McDonnell has.

McDonnell might be able to finesse the problems by unplugging the transvaginal business and moving forward with his budget. He had planned one of his smoke and mirrors specials to boost transportation funding by cheating education out of a part of the sales tax. Now it looks like we might get a hike in the gasoline tax, at least to mesh with inflation. And that, dear children, would make Mickey D. look worse than Tim Kaine ever could have.

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Posted in Blogs and Blog Administration, Business and Economy, Children and Families, Economic development, Government Finance, Gun rights, Health Care, Money in politics, Politics, Taxes, Transportation

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Panama Canal a Long-Term, not Short-Term, Game Changer

Posted on February 22, 2012 by | 5 comments

Virginia ports rock! But let's not get carried away.

by James A. Bacon

The Virginian-Pilot has published a piece on the “cargo bonanza” potentially awaiting the port of Virginia when the Panama Canal opens its bigger locks, enabling monster container ships to cut their travel times between Asia and the East Coast of the United States. Much of the article recounts background information that will be familiar to readers of this blog. But writer Robert McCabe expands the ongoing conversation in one very important way: West Coast ports and railroads, he notes, know they have a lot to lose, and they are fighting back.

While Virginia’s ports have distinct geographical advantages that give them a shot at winning an outsized share of the increased East Coast container cargo — most notably the deepest channels on the Atlantic — the boon to the state’s maritime industry may be less than meets the eye. McCabe provides a number of  reasons to be cautious.

First, Virginia can’t go it alone. Writes McCabe:

Shipping lines generally call on a series of ports, discharging and taking on cargo at one site after another as part of a “rotation.” So being able to handle the biggest ships might not help one East Coast port if the others aren’t ready.

Peter Tirschwell, senior vice president for strategy at UBM Global Trade, wrote in The Journal of Commerce this month that he doesn’t see a way for Hampton Roads to solve this problem by making itself a sole East Coast cargo destination.

“Given a population base dispersed throughout the mid-Atlantic and a modern inland-rail network that’s still chasing customers rather than the other way around, Virginia isn’t there yet,” he wrote. “It essentially has to wait for the other ports to catch up.”

Second, it will take time to alter deep-rooted trade patterns. Not only will West Coast ports maintain a competitive advantage for time-sensitive products — the oceanic transit takes 11 or 12 days to the West Coast compared to 24 to 26 days to the East Coast — ports and railroads can defend their business by cutting rates. McCabe quotes Tom Finkbiner, former chief of Norfolk Southern’s intermodal operations who now chairs the Intermodal Transportation Institute’s board of directors at the University of Denver. The canal, said Finkbiner, “is not going to divert a lot of West Coast traffic to the East Coast because of all the supply chains set up already. It’s not in the cards.”

It’s perfectly understandable for Virginia port officials to salivate over the growth prospects created by the Panama Canal widening. It’s perfectly appropriate for the McDonnell administration to try to leverage the once-in-a-generation economic-development opportunity. But it’s also important for the state not to get swept up in boosterism.

Of greatest concern to me is the $500 million the administration has allocated to a public-private partnership, still under negotiation, for building an upgraded U.S. 460 that will improve Hampton Roads’ access to Interstates 95 and 85. If so much container traffic is destined to materialize, why can’t financing be structured so that shippers pay for the improvement? If the project is not financially viable without a half-billion dollar public contribution, is the project economically justified?

Don’t mistake my questions as hardened opposition to the U.S. 460 project. I would love to see the Tidewater economy blossom from increased trade. Let’s just say, though, that, based on what I know at this point, I remain unconvinced. The McDonnell administration has hinted at economic-development prospects that might change public perceptions when they come to light. I eagerly await the news.

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Posted in Transportation

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National Laughingstock, Again

Posted on February 21, 2012 by | 10 comments

By Peter Galuszka

Saturday Night Live’s recent mocking of the Virginia General Assembly’s proposed legislation to force women considering abortion to have trans-vaginal ultrasound exams and establishing conception as the moment of life’s beginning makes the Old Dominion the butt of national jokes once again.

It seems that no matter how Virginians try to build their Commonwealth into a prosperous, happy and rational place, their legislators or politicians let them down. Virginia seems cursed to be regarded as a backward and Gothic Southern state where the rich few are in charge, oppression is rampant and enlightenment far out of reach.

SNL’s skit on Feb. 18 was just another in a series of embarrassments.

Former U.S. Sen. George Allen, now running again for the Senate, brought national shame on Virginia when he rudely called S.R. Sidarth, a 20-year-old aide for opponent Jim Webb “macaca” during the 2006 campaign. Since Sidarth is dark-skinned and of Indian decent, the comment painted Allen as a racist. He apologized, but lost the election in large part because of the gaffe.

A year before, Virginia’s legislator likewise drew international mockery for the so-called “droopy drawers” bill. The law would have called for $50 fines for wearing underwear over the top of the waistband of one’s trousers. “Most of us would identify this as a coarsening of society,” according to one legislator.

Showing underwear has been a cultural style that’s been fashionable among young people around the world. It had been popular among young African-Americans, so the racial implication was clear. It’s far from the only slight the white-dominated General Assembly has thrust on people of color. As late as the 1960s, for instance, it was a felony for a white person to be married to an African-American.

To be sure, a handful of other states have passed similar ultrasound requirements. Yet Virginia, despite its fine universities and well-educated labor force, simply cannot escape its image as a backward place. Virginia’s leadership needs to take the Old Dominion into the 21st century, or maybe even the 20th.

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Posted in Abortion, Feminism, Women's Rights, Politics

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Questions about VDOT’s On-Budget/On-Time Performance

Posted on February 21, 2012 by | 7 comments

VDOT construction project. (Click for more legible image.)

The Virginia Department of Transportation is doing its best job of delivering projects on budget and on time since FY 2010. According to VDOT’s most recent quarterly report, the department had 340 maintenance and construction projects due for completion during the October-December quarter. Of those, 77.1% were completed both on time and on budget — edging out its target of 77%.

Stated Governor Bob McDonnell in a prepared statement: “I’m pleased
to report that VDOT is on-time and on-budget for all VDOT-managed construction and maintenance projects during this quarter. This is especially significant since so many additional projects and project phases are under way following our historic investment in transportation made during last year’s General Assembly session, advancing more than 900 projects.”

It’s good to know that VDOT performance is meeting goals. Kudos all around. But the governor’s statement leaves a few questions unanswered.

  • Now that VDOT has met its 77% target, is it realistic and appropriate to raise the target — say, to the 83% on-time/on-budget performance of the 2Q of FY 2009?
  • The on-budget/on-time performance was the best since FY 2010. Gosh, that means it was the best in six quarters. Not exactly earth shaking news. Indeed, the question arises, why did VDOT performance dip in FY 2011, when only 66% of projects came in on-time and 68% on-budget?
  • While we’re on the subject, how does the most recent quarter compare to years before FY 2010? VDOT has been tracking performance for nine years now. How does current performance stack up against the best performance recorded?
  • Given the fact that bids are coming in 15% or so under official VDOT estimates, why are any projects coming over budget?

Bacon’s Rebellion — asking the questions nobody else asks.

Update: To answer some of the questions above, it seems that VDOT hit 80% on-budget/on-time in 2007 and maintained that level for the next two years. So, my new questions are (1) what caused performance to dip in 2010, and (2) why would the McDonnell administration bring attention to an issue that no one was asking about?

— JAB

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Posted in Transportation

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Creating a Real Medical Marketplace in Virginia

Posted on February 21, 2012 by | 11 comments
Graphic credit: American Enterprise Institute

by James A. Bacon

Excellent story in the Times-Dispatch today. Too bad it’s buried on the business page. It should have been squeezed onto the front page, or at least in the A section, to share space with the wall-to-wall coverage of abortion, gun bills and the rest of the Culture War effluvia that so mesmerizes the reporters and editors of Virginia’s newspapers.

The underplayed article focuses on a topic that affects everyone, rich and poor, young and old: the lack of price transparency in health care. Tammie Smith illustrates the point by recounting the story of Lisa Ownby, a Williamsurg mother of two boys who suffer from a condition in which their tooth enamel easily erodes. Dentists recommended complex oral surgery for the two. But when Ownby asked how much the procedures would cost, no one could tell her.

“I was told I could not be given a dollar amount of what I’d owe,” she said. Figuring that the procedures might cost her a $1,000 copay, she went ahead and had the procedures done. She was floored to find that the charges amounted to nearly $40,000 before health insurance-negotiated discounts. The final charge was $17,000 paid by the insurer and $3,000 out of pocket.

“If I had known it would cost $40,000, I would have said, ‘No.’ They were baby teeth,” Ownby said. “It’s not even like they were saving permanent teeth. I could have chosen to say, ‘I couldn’t afford this.’ I wasn’t given that option.”

This story highlights the greatest single failing of the American health care system today: the total lack of price transparency. It is ludicrous to describe what we have today as a “market-based” health care system, and an intellectual fraud to attribute the inadequacies of the system to “market failure.” When there are no prices, there is no market economy!

There are two basic approaches to fixing the problem. One approach, adopted by the U.S. and the economically advanced democracies, is to move toward a government-dominated, command-and-control health care economy. The other, attempted only in isolated pockets such as cosmetic medicine, Lasik surgery and medical tourism, is to move toward a consumer-driven health care system in which prices play a major role in decision making.

Virginia has made some feeble gestures in the direction of increasing price transparency, supporting the activities of the private, not-for-profit Virginia Health Information. VHI has a contract to collect and report state health data, including health care prices on some 30 common medical procedures such as abdominal ultrasound and hip replacement. But VHI lacks the resources to post data for thousands of other medical procedures that Virginians encounter.

However, HB 343 submitted by my representative, Del. John O’Bannon, R-Henrico, and SB 135, co-sponsored by Sen. Toddy Puller, D-Mount Vernon, and Sen. Dick Saslaw, D-Springfield, would establish a Virgina All Payer Claims Database system. The purpose would be to: “facilitate data-driven, evidence-based improvements in access, quality, and cost of health care through understanding of health care expenditure patterns and operation and performance of the health care system.”

As O’Bannon told the T-D: “The ultimate goal is to give people knowledge that they can use when they go for their day-to-day health care needs, so that they will know the value of something, what something costs, how good the quality is.”

This is arguably the single-most important piece of legislation before the General Assembly today, and O’Bannon, Puller, Saslaw and other co-patrons should be applauded for collaborating on a bipartisan basis to pull it off. According to the Richmond Sunlight website, the House and Senate both have passed their respective versions of the bill. It is unimaginable to me that Governor Bob McDonnell would not sign the legislation into law, but I have not seen any pronouncement from him on the issue.

There are a couple of possible sticking points. One could be cost. It’s one thing to authorize the creation of a medical claims database, another thing to appropriate money to set it up. How much will this cost, and who will pay for it? That’s not clear from the bill.

Another question is whether the state database would conflict with private initiatives popping up in the Virginia medical marketplace like Castlight, which allows enrollees in major insurance programs to do comparison shopping for doctors, services and conditions. Ideally, the state initiative would complement private-sector initiatives, not duplicate them.

Consumer data cannot come too soon. Large private insurers are increasingly shifting to consumer-driven insurance plans with huge deductibles. My insurance plan combines a high deductible and a Health Savings Account with personal wellness coaching and the Castlight service. But I’m guessing that a relatively small percentage of the population enjoys access to this kind of data.

The spread of consumer-driven health care, contends a Wall Street Journal op-ed written by the American Enterprise Institute’s J.D. Kleinke, is behind the deceleration in rising health care expenditures that began in 2002, when cost increases exceeded 9%, to 2009 and 2010, when they fell below 4% annually.

The AEI mentioned a number of factors responsible for the decline, including the ability of patients to purchase generic versions of blockbuster drugs developed in the 1980s and 1990s, advances in prevention and disease management, and the shift from Health Maintenance Organizations (HMOs) to consumer-driven health care. (Undeniably, a less positive factor was the 2007-2008 recession and slow economic recovery.)

“Combine all these new medicines, information channels and business
compulsions with the slow, steady transfer of economic responsibility
for health care — from corporate and government bureaucrats to consumers
and their families — and suddenly health-care starts to look almost like
an actual market,” writes Kleinke. “Contrary to the perennial doomsaying, the health-care system is — almost in spite of itself — getting better.”

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Posted in Health Care

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Our Upstanding Founding Fathers

Posted on February 20, 2012 by | 10 comments

By Peter Galuszka

Since it is President’s Day and Virginia is the “Mother of Presidents,” I thought it might be interesting to put some things in perspective.

One of the more curious blog postings of late on the site was Jim Bacon’s gushy advocacy of a move to private, religious-oriented schools because of what he sees as the massive educational and moral failure of the public school system.

Naturally, this is not a new idea. There have been church schools galore for decades. But what really interested me was Bacon’s canonization of Ann McLean, a “blonde banker’s wife” and  “devout Christian” who wants to develop what she imagines to be a “classical education” that would help develop the moral “character” of students. Jim somehow sees this as passing some made-up “entrepreneurship” test, making it all A-OK.

As Bacon puts it: “The founding fathers, says McLean, understood that humans were by nature selfish and fallen, the only antidote for which was the cultivation of personal virtue. ‘The American experiment depends upon an educated populace founded on Christian values,’ says McLean, who makes no secret of her political and cultural conservatism.

It seems that we are getting a big of romanticizing here – in this case about the so-called “Founding Fathers” who are now imagined by many conservatives to have actually been early-form fundamentalist Protestant preachers. I’ve seen a lot of myth-making in my life, especially here in the South where I partly grew up and now work and in the present and former Soviet Union where a lot of 80 and 90-somethings like to gather together, wear their 59 medals from The Great Patriotic War and glorify Stalin.

But before we get too far afield, let’s take a quick look at who our “Founding Fathers” actually were and what their moral standards actually might have been:

  • The brilliant Ben Franklin was such a serial womanizer, his mastery of swordsmanship helped the fledging United States impress the sex-loving French, who saved our Bacon (forgive the pun) time and again, notably at Yorktown.
  • Money guy Alexander Hamilton had an infamous sex scandal with a married woman.
  • James Buchanan had a close, same sex relationship with a slave owner.
  • If the Founding Fathers were alive today, they would probably despise large corporations that make some of the biggest politician donations today. They especially hated the British East India Trading Company because it roamed the world doing business with other people’s money and brutalized many.
  • Thomas Jefferson had his own idea about the Bible. In fact, he took a razor to it. He rearranged Matthew, Mark, Luke and John in chronological order and dumped the Resurrection. Jefferson ended things with the big boulder being rolled up against Jesus’s tomb.
  • Plus, TJ apparently fathered six children with child-slave Sally Hemming. This little taboo has had put the Old Guard of Things Virginian on their heads for years.

It’s always fun to look at what the myths are and what the truth is. Unfortunately, Virginia has been hit with branding issues for decades. One always sees everything from strip malls to old aged homes with “Patriot” monikers. Ditto the Tea Party. They are masters of mythology by stealing the “Don’t Tread on Me” rattlesnake flag (which has nothing historically to do with their views” and, of course, the usual “Patriot” nonsense, in which they imply they love their country more than you do.

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Posted in Business and Economy, Education (K-12), Money in politics, Politics

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Uncertainties and Risks in the Charlottesville Bypass Bid

Posted on February 20, 2012 by | 9 comments

by James A. Bacon

Uh, oh, it looks like the bidding process for the Charlottesville Bypass is running into complications. Prospective bidders for the construction phase of the controversial project, estimated to cost $244 million, have lots of questions… and the Virginia Department of Transportation doesn’t have all the answers.

A document obtained by Charlottesville Tomorrow under the Freedom of Information Act responds to 220 questions submitted by firms formulating bids. Questions revolve around fundamental points such as traffic projections, noise analysis and bridge design. On 15 occasions in the 33-page document, writes Sean Tubbs, VDOT provides the following response:

The Department does not represent or warrant that the information contained in the supplemental information package is reliable or accurate or suitable for designing this project.

When VDOT does provide concrete answers, bidders may not always like them:

  • The contractor will be responsible for designing and paying for any environmental mitigations that might be required as part of a Federal Highway Administration review not due to be complete until later this year.
  • The contractor is responsible for acquiring any additional right-of-way that might be required to meet revised stormwater management requirements.
  • The winning contractor must produce a traffic study showing that its design for the 6.2-mile bypass and two interchanges can maintain a level of service of “C” — continuous and free-flowing — by the year 2036.
  • The builder must demonstrate to the U.S. Army Corps of Engineers that wetlands near the South Fork Rivanna Reservoir will not be impacted.
  • The builder must confirm with the Virginia State Historic Preservation Office that its plan avoids cultural-resource sites.
  • VDOT will not increase the $100,000 paid to each team for producing a qualified proposal.
  • To keep the procurement process on schedule, VDOT will not take time to answer any more questions.

The bidding process shows every sign of being rushed in order to meet a schedule imposed from above. Here’s what taxpayers have to worry about: Uncertainty will heighten the perception of risk among bidders. Bidders may feel compelled to pad their bids to offset those risks — better to lose the job than to win a money loser — and some may drop out of the bidding entirely.

I’m not sure what happens if the low bid exceeds the $197 million allocated by the Commonwealth Transportation Board to cover the balance of the project’s costs. Presumably, the administration will have to go back to the CTB and ask for a supplemental allocation. Given the way the administration hid the cost and design controversies raging inside VDOT at the time (see “In the Dark,”), the McDonnell team may have some explaining to do.

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Posted in Transportation

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How to Leverage an Indexed Gas Tax

Posted on February 20, 2012 by | 11 comments

The state Senate has passed a budget bill, which must reconciled with the House of Delegaes budget bill, that seemingly does something right: It rejects Governor Bob McDonnell’s idea of diverting up to one-quarter of a percentage point from the state’s 4.5% sales tax from the General Fund to transportation. Transportation should be funded on a “user pays” basis to the greatest extent possible and should not compete with other core functions of government that lack a dedicated revenue source.

In place of that diversion, the Senate proposes indexing the motor fuels tax, now 17.5 cents per gallon, to the U.S. Department of Labor’s producer price index for non-residential construction. This provision recognizes that the gas tax, adjusted for inflation, has eroded so dramatically since 1986 that the state is fast running out of money for new construction.

Eventually, Americans will shift to alternate energy sources such as all-electric vehicles, propane, natural gas or even fuel cells. At that point, Virginia will have to give serious consideration to a Vehicle Miles Driven tax. But that day is years off.

A more immediate concern is that the Senate bill dumps more money into Virginia’s transportation system without reforming the way the money is spent. It is widely acknowledged that Virginia needs to align decision-making for transportation and land use at the same level of government. The McDonnell administration is inching closer to doing precisely that: devolving responsibility for secondary roads to local governments. The political sticking point is the localities’ fear that they’ll get get stuck with the expense without sufficient means to pay for it.

Added revenue from indexing the gas tax could make devolution more palatable politically if it were used to sweeten the pot for local government. As such, the tax should be tied to a fundamental reform of the transportation system, not part of a Business As Usual budget bill. Use the money to drive structural change that not only puts more money into road building/maintenance but encourages local government officials to make more responsible decisions about land use, which determines demand for roads and highways in the first place.

— JAB

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Posted in Taxes, Transportation

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Why Tobacco Exports Are Wrong

Posted on February 18, 2012 by | 5 comments

By Peter Galuszka

Virginia’s business lobby is blasting President Barack Obama for balking at pushing U.S. grown tobacco leaf in upcoming trade talks involving Pacific Rim nations.

Barry E. DuVal, president and CEO of the Virginia Chamber of Commerce, complains that Obama is “targeting tobacco” by trying to leave it out of upcoming talks involving the Trans-Pacific Partnership involving Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam and the U.S.

Doing so, writes Duval, “is a step in the wrong direction and is cause for serious concern.”

What, actually, is a step in the wrong direction and a cause for serious concern is DuVal’s disingenuity about the issue. The fact is, according to the World Health Organization, tobacco killed 100 million in the last century globally and could kill up to 1 billion (that’s billion with a “b”) in this century.

“Nearly 80 percent of the world’s one billion smokers live in low and middle income countries,” according to the WHO.  Thus, the countries where Virginia’s leaf exports go are not well equipped to handle the tremendous health toll on their populations from smoking. They do not have the funds to treat lung cancer or various other lung diseases, especially in countries where ignorance about the fatal consequences runs high.

Duvall dodges the issue. “To be clear, this will not reduce smoking or improve public health in any measurable way and will only punish Virginia farmers by shutting them out of the global market.”

Hot flash to Mr. DuVal. Virginia’s tobacco growers have been in serious decline for years, especially since changes in tobacco regulation took away the federal quota system that made tobacco growing four times as profitable as growing useful crops like corn or soybeans. This happened roughly a decade ago, but maybe it is news to DuVal.

Another dirty little secret is why Philip Morris USA and Altria just happened to relocate from New York to Richmond a few years back. A mass of lawsuits on health issues convinced Philip Morris to split itself into two firms.

One was to go to Richmond and urge people not to buy its products while selling them anyway. Look at its Website if you don’t believe me.

The other part, Philip Morris International, moved to Switzerland where, according to The Wall Street Journal, it ruthlessly markets higher nicotine and tar products to unsuspecting, low income people in places such as Indonesia, Malaysia, Russia, China and India.

DuVal’s argument seems to be that Virginian’s should sell deadly products overseas because, hey, it’s legal and it won’t matter much anyway regarding health concerns. That’s rather cynical.

Obama should hold firm on the issue when his representatives meet in Australia next month. If Virginia’s growers don’t like it, maybe they should consider switching their crops to more useful ones if they haven’t already.

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Posted in Agriculture & forestry, Economic development

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Does HB33 Protect Open Shop Contractors?

Posted on February 18, 2012 by | 5 comments

by James A. Bacon

Mea culpa. I missed a critical point in my previous analysis of the political chess match between the Metropolitan Washington Airports Authority (MWAA) and the McDonnell administration. I said naively that Gov. Bob McDonnell may have no choice under new legislation but to yank $150 million in state funds allocated to Phase 2 of the Rail-to-Dulles project.

HB 33, I wrote, not only prohibits mandated Project Labor Agreements in state-funded construction projects, but it seeks to ensure that “neither the state agency nor any construction manager acting on behalf of the state agency … discriminate against bidders [not adhering] to agreements with one or more labor organizations.” Last week MWAA scrapped its PLA mandate for Rail-to-Dulles but subsituted a provision that would grant 10-percent scoring bonus for bidders whose plans included a PLA — clearly discriminatory against open-shop contractors. McDonnell, I suggested, would have no choice but to find MWAA in violation of that law.

Here’s what I missed: The bill’s anti-discrimination clause applies to state agencies. MWAA is not a state agency — it is an interstate compact! Thus, it could be exempt from HB 33, commonly referred to as the Comstock bill after lead patron Barbara Comstock, R-McLean.

That’s the argument made by Del. Bob Marshall, R-Manassas (hat tip to anti-MWAA activist David LaRock). Marshall had submitted a bill that would have addressed the problem head-on. He would have denied MWAA the $150 million if (1) Rail-to-Dulles were subject to a Project Labor Agreement, (2) MWAA policies or bylaws governing public access to meetings and records were  incompatible with Virginia’s Freedom of Information Act, or (3) phase 2 of the project and its finances were not subject to state audit.

MWAA’s fig-leaf vote, which substituted a scoring preference in place of a mandate, would circumvent Marshall’s PLA clause just like it circumvents HB 33. But MWAA wouldn’t get the money unless it also submitted to Virginia’s FOIA law and state audits.

Did the authors of the Comstock bill get snookered? I’m not a lawyer, so I don’t know. I simply repeat the arguments. I’d like to hear other people weigh in with their opinions.

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Posted in Transportation

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Teaching Like Socrates

Posted on February 17, 2012 by | 18 comments

Low tuition, classical education – what’s not to like?

By James A. Bacon

One day about two years ago Ann McLean, a devout Christian and mother of four, felt that she was “spoken to” by God and given a mission in life – to start a new school. She never looked back. If all goes well, she will enroll her first six classes of students for Hunter Country Day School this fall.

While the decision to launch a private school based on a classical education and Christian values came on suddenly, dissatisfaction with the conventional alternatives in the Richmond area had been percolating for quite a while. Educational standards in public schools, she felt, had collapsed. The curriculum in public and private schools alike had invaded by a dominant culture coarsened by sex and violence. And the college preparatory school where her children were enrolled heaped “crushing tuitions” on parents to pay for trophy buildings and athletic programs.

McLean’s intent is to focus on fundamentals, creating an environment where children can hone their minds and build character at the lowest tuition possible. Hunter Country Day will adopt a curriculum inspired by the classical education movement — the ultimate back-to-the-basics program — and charge only $6,000 in yearly tuition. That compares to $10,500 per pupil spent by public schools nationally this year and $10,900 in Virginia.

A slim, blonde banker’s wife with a Ph.D. in art history, McLean epitomizes the entrepreneurship sweeping K-12 education today. It’s a time of great ferment as Americans across the country seek to reinvent an educational system they see as badly broken. Indeed, that entrepreneurial, mission-driven spirit may be America’s best chance to break free from the rigid, suffocating stasis of the public school system. While private schools do offer an alternative, prep-school tuitions approaching $20,000 a year are unaffordable to the vast majority of Americans.

With the backing and support of two other Richmonders, McLean has leased classroom space from the Dover Baptist Church in Goochland County and scoured the region for second-hand equipment and desks. The school will have few frills. “We don’t need a huge football team. Sorry,” she says unapologetically. Technology has its uses but she doesn’t need high-tech school buildings either. “Socrates never had a classroom. Jesus Christ never had a classroom.”

Tuitions will go to hiring great teachers , keeping the teacher-student ratio down to an intimate 12 to one and implementing a classical education curriculum.  By “classical,” she doesn’t mean traditional, like teaching phonics (although she is a big believer in phonics). McLean is developing a curriculum based on the “trivium” developed in the Middle Ages: grammar, logic and rhetoric. Elementary school pupils are grounded in a foundation of facts, such as grammar. Middle school pupils learn how the facts relate in a logical framework. And high school students master rhetoric, or critical thinking. The curriculum is based on language and concepts, not photos, video and other images so prevalent in education today.

A core goal of classical education is to build students’ character. The founding fathers, says McLean, understood that humans were by nature selfish and fallen, the only antidote for which was the cultivation of personal virtue. “The American experiment depends upon an educated populace founded on Christian values,” says McLean, who makes no secret of her political and cultural conservatism. “The most important job of any culture is training the next generation” – a job at which the nation is failing. She wants to reverse the nation’s cultural decline. “I’m the little girl sticking my finger in the dike.”

McLean’s philosophy of education is not for everybody. But that’s the beauty of free markets. Real competition would offer a broad spectrum of alternatives to the secular uniformity of public schools and the soaring cost of elite prep schools. More importantly, Hunter Country Day will succeed only if McLean provides the kind of education – at an affordable price – that parents want for their children.

Virginia’s General Assembly is debating a number of proposals this session to increase private school choice by means of tax credits. None of the proposals are bold enough.  Based on Governor Bob McDonnell’s proposed 2012-2014 budget, the commonwealth will distribute $5.1 billion, or roughly $4,000 per student, in Direct Aid to Public Education. If that $4,000 followed the students, rather than the schools, the vast majority of Virginians could afford a private education of their choice…. Or, if parents couldn’t find a school that suited, like Ann McLean they could start their own.

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Posted in Education (K-12)

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Port of Virginia’s Growth Opportunity

Posted on February 17, 2012 by | 29 comments

by James A. Bacon

The Port of Virginia was the third largest East Coast port ranked by container traffic in 2010, with 11% market share. It trailed Savannah  and New York/New Jersey, and Charleston was nipping on its heals. But the market for U.S. containerized cargo is forecast to double over the next decade, and Virginia’s ports are ideally situated to benefit from that growth.

In a presentation to the Commonwealth Transportation Board Wednesday, Jerry Bridges, executive director of the Virginia Port Authority, explained how the expansion of the Panama Canal would give Virginia’s ports a big competitive edge over its East Coast rivals. I have blogged on this topic before, but Bridges offered a greater level of detail.

The widening, expected to be complete by 2014-2015, will allow ships holding 18,000 TEUs (twenty-foot equivalent units, half of a standard shipping container) to use the canal. Currently, the canal handles ships with capacity of 4,400 TEUs. The use of larger ships will dramatically cut shipping costs from China, Japan and other Far Eastern nations to the U.S. East Coast, bypassing America’s West Coast ports and trans-continental railroads. (I could not attend the CTB meeting Wednesday, so I am basing this post upon Bridge’s PowerPoint presentation, filling in the blanks as necessary.)

Other U.S. ports have limited options to expand capacity. Virginia has the only U.S. port with a permitted expansion project in place. Perhaps most crucial, Hampton Roads has the deepest channels of any East Coast port, meaning that it is best equipped to handle the giganzo container ships now coming out of the shipyards. The graphic below shows the current (blue), authorized (red) and desired (green) channel depths on the Atlantic coast.

Port channel depths. Source: Port of Virginia

Virginia also has partnered with the two East Coast railroads, Norfolk Southern and CSX, to upgrade rail routes emanating from Hampton Roads and Virginia by allow double stacking of container trains. The Heartland Corridor and National Gateway will connect Norfolk to the Midwest, while the Crescent Corridor opens up markets in the Northeast and deep South. Even though Norfolk International Terminals has added six new on-dock rail lines and doubled the capacity of its rail yard, the railroads aren’t expected to be able to handle the influx of traffic. Thousands of containers will have to move by truck.

Freight movement has multiple highway bottlenecks due to the necessity of crossing bodies of water. The map below shows the port’s priority transportation projects in Hampton Roads. Not included here is the upgrade of the U.S. 460 link to Interstates 95 and 85 in Petersburg.


The Midtown Tunnel and Martin Luther King (MLK) extension are already funded. The other multibillion-dollar projects are not.

Two critical questions: First, how solid is the forecast showing a doubling of U.S. containerized shipments by 2022? What assumptions are embedded in that projection? Can international trade continue at the same rate as in the past three decades? What happens if, as President Obama hopes, an increasing share of manufacturing relocates back to the U.S. as China loses its edge as a source of inexpensive manufacturing? Is the forecast solid enough to base an investment of billions of public transportation dollars? And what happens to toll-driven projects if the traffic fails to materialize? I’m not doubting the forecast. I just want to hold it up to public scrutiny.

Second, if the demand is as powerful as Bridges says it is, and if the Port of Virginia will enjoy such an overwhelming competitive advantage in winning the growth in container traffic, why does the U.S. 460 upgrade need to commit $500 million in state subsidies? Do the three construction consortia bidding to partner with the state accept these port projections? If so, how much new truck traffic do they expect the port to generate? And why can’t they pay the full freight?

There are good reasons to believe that the Panama Canal widening will create a great economic opportunity for Virginia. Of course, the state should endeavor to support that opportunity. But I would like to see the analysis, if it exists, that justifies committing the state to a half-billion dollar subsidy.

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Posted in Economic development, Transportation

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A Pathetic Half-Time

Posted on February 17, 2012 by | 20 comments

By Peter Galuszka

It’s so-called halftime at the Virginia General Assembly, and with conservative Republicans holding sway and many serious problems facing the Commonwealth, here’s what we’ve come up with so far:

  • Women exercising their constitutional right to have an abortion now will be forced to undergo and pay for an ultrasound before the procedure. There’s no medical reason for this, just to shame the woman into reconsidering so that right-to-lifers can feel good about themselves. Conservative Republicans, mind you, want to keep the government out of our private lives.
  • After years of supplying a lot of the East Coast with handguns, Virginia limited purchases to once a month. No longer. Now gun fanatics can exercise their Second Amendment Rights as many times a month as they want and blast away. Rock on!
  • If you have been laid off or were born into a low income family and need public housing, the state wants to check into your urine to see if you abuse drugs. If you are poor, you are suspect. If you are rich, congratulations, sir!
  • If you look foreign and sound like Cheech and Chong, the cops have to check to see if you are in this country legally if they happen to stop you for running a red light. How they do this quickly, no one knows exactly, since drivers licenses can be issued to anyone regardless of nationality. The police community is screaming that they don’t have the resources to handle this and even the Richmond Times-Dispatch says it is a bad idea. No matter, hard-right-wingers have to keep up with Alabama and Arizona.
  • In a move that is certain to save Virginia’s economy from the horrid onslaught of labor unionism, state money can’t be used to fund public works projects that have agreements that require that some of the work go to firms represented by unions. It has to do with Dulles Rail, a big transit project up DC way. It is important to let them Yankees and DCists know that this here’s the South and we don’t cotton to no unions.

Meanwhile, more pressing matters await, such as a budget. It seems that Gov. Robert F. McDonnell’s plan to put the screws to education and use part of its General Fund payments to boost transportation isn’t getting very far.

Ditto the conservative schemes to stick it to our lazy and inept public school teachers. They want to upend the status quo with new plans to subject teachers with tougher new performance appraisals. Mind you, there has been no solid evidence or public outcry that this is needed. Rather some of the right-wing think tanks decided it should be an issue. One reason could be that some teachers are organized into, God forbid, labor unions. It also has racist overtones since it seems aimed at minority teachers in minority and low-income areas.

The anti-teacher movement seems to have been orchestrated months before the legislative session. Read six months of some of the postings on this blog and you will see that somewhere, someone has decided that public school teachers are a major, major problem. Maybe you didn’t notice yourself, but you read it here first!

The big irony is that McDonnell has worked so hard to recast himself from social to moderate conservative so he can more easily pursue national political ambitions. As much as he spins the GA session as progress, it clearly ain’t. The agenda is being controlled by the likes of Bob Marshall and other wingnuts.

As for me, I blame the Democrats, especially national party boss and former governor Tim Kaine. They let the hard righters get a slender majority in the last election and now there’s hell to pay. Ironically, however, the one who might end up paying the most will be Bob McDonnell.

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Posted in Business and Economy, Children and Families, Economic development, Education (K-12), Electoral process, Environment, Government Finance, Gun rights, Health Care, Housing, Immigration, Infrastructure, Labor and Workforce, Politics, Race and Race Relations, Social Services and Entitlements, Taxes

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Goodbye Grundy! Hello, Wal-Mart

Posted on February 16, 2012 by | 11 comments

By Peter Galuszka

Hours west of Richmond by car  lies the old coal town of Grundy, lying at a confluence of the flood-prone Levisa Fork River below steep cliffs of sedimentary rock of sandstone and shale.

Grundy has been a touchstone for my various trips to the Virginia coalfields over the years. I hadn’t been that part of the woods in a while and when I drove through on Tuesday, I went into a state of shock.

Utterly gone was the pleasant old town with its rich collection of Depression-era buildings that could have been the subject of a Walker Evans photo study. Vanished was the black statute of the coal miner looking expectantly to heaven. The little movie house was gone. Everything was gone.

In its place around the dynamited sides of mountains was a multi-level Wal-Mart. I had to rub my eyes in the misty rain. An entire town had disappeared to make room for a Big Box.

To be sure, this had been a long time coming. The Levisa Fork is flood prone, in part because ruthless strip mining practices in the Southwest Virginia coalfields have ripped out vegetation that can hold back rainwater. One of the biggest floods came on April 4, 1977.

Grundy became a cause celebre among local economic development officials and U.S. bureaucrats. U.S. Rep. Rick Boucher worked out a plan in 1997 to forever change Grundy with town leaders, the U.S. Army Corps of Engineers and the Virginia Department of Transportation. Helped by $96 million in public money, VDOT bought and ripped down the old Lynwood Theater and local hardware stores and fives and dimes. The Army spent $100 million ripping out 2.4 million cubic yards of rock, enough for 68 football fields, and helped relocate rail tracks.

In all, according to a 2007 Post story, Grundy’s makeover ended up costing $196 million or $175,000 for every man, woman and child in town. But all didn’t work out according to plan. Many of the building owners, the Post reported, did not rebuild as planners hoped. They merely pocketed their money and left.

What’s left is a Wal-Mart in perhaps the most dramatic geological setting possible. The utter madness of the scene is commemorated on YouTube with a pictoral.

Even nuttier is that government officials have spent so money on Grundy when there is still so much oppressive poverty and health care needs that have infected the coalfields from the day the first coal prospector set foot on the remote and beautiful mountains of Southwest Virginia.

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Posted in Government Finance, Infrastructure, Labor and Workforce, Land use & Development, Planning, Transportation

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MWAA Plays Chicken with McDonnell over PLAs

Posted on February 16, 2012 by | 15 comments

Train wreck. Photo credit: Washington Metropolitan Area Transit Authority.

by James A. Bacon

The Metropolitan Washington Airports Authority (MWAA) board pressed ahead yesterday in its bid to preserve the $2.8 billion Phase 2 of the Rail-to-Dulles project as a union job.

First, under pressure from Republican legislators, the board retracted a previous decision mandating that Phase 2 be subject to a Project Labor Agreement (PLA). Instead of requiring the prime contractor to hire workers from a union hiring hall, the board substituted a 10-percent scoring bonus for bidders whose proposals contain a PLA. That bonus gives companies using a union workforce a significant advantage in the bidding process expected to take place later this year, and it could be sufficient to even deter many non-union contractors from submitting bids.

MWAA’s action appears to be designed to skirt bills passed by House of Delegates and the state Senate that would prohibit mandatory PLAs for any project receiving state funds. If the MWAA board had kept its PLA mandate, it would have put into jeopardy a contribution of $150 in state funds that was critical to a delicate restructuring of the project financing worked out under the auspices of U.S. Transportation Secretary Ray LaHood.

The PLA is a top priority of Dennis Martire, vice president of the Laborers International Union (LiUNA), which between its national and Mid-Atlantic offices has contributed $1.1 million to political candidates since 2008, overwhelmingly to Democrats. The MWAA board is comprised mainly of appointees by Democratic officials, and Democrats in the General Assembly have opposed Republican-sponsored bills to hold the MWAA board accountable.

Second, the board heard a presentation by a consultant who warned that rates for the Dulles Toll Road could double starting next year if, in the words of the Washington Post’s Dana Hedgpeth, “Virginia doesn’t deliver on a promise to contribute $150 million for the second phase of Metrorail’s new Silver Line.”  The not-too-subtle message: If Governor Bob McDonnell refuses to hand over the $150 million, he’s to blame for toll rates going up.

Under the financing arrangement agreed to by the funding parties, Loudoun County, Fairfax County, MWAA and the Commonwealth of Virginia will pay fixed sums. Any additional costs — such as a winning bid higher than the official $2.8 billion cost projection — will be covered by Dulles Toll Road commuters, who will pay higher tolls.  Writes Hedgpeth:

Tolls for a one-way trip that now costs $2.25 could increase to $4.50, according to a consultant’s report prepared for the Metropolitan Washington Airports Authority and presented during a board meeting Wednesday. If the state money comes through, tolls for the same trip could still rise to $2.75.

The MWAA board appears to be playing a game of chicken with the McDonnell administration. If the governor refuses to hand over the $150 million, MWAA may have no alternative but to jack up rates on Dulles Roll Road commuters, many of whom live in Loudoun County. If that happens, Loudoun County might drop out. Is McDonnell willing to see the Rail-to-Dulles financing run off the rails because he won’t cough up the state’s promised share?

McDonnell may have no choice but to withhold the funds. HB 33, whose lead sponsor was Del. Barbara Comstock, R-McLean, not only prohibits mandated PLAs, but it seeks to ensure that “neither the state agency nor any construction manager acting on behalf of the state agency … discriminate against bidders [not adhering] to agreements with one or more labor organizations.” Arguably, MWAA’s 10-percent bonus for PLAs would discriminate against non-union contractors.

Northern Virginia needs mass transit to accommodate its transportation needs in an age of ever-increasing congestion and gasoline prices. But the process of building heavy rail is so polluted by special interest maneuvering — labor unions, big construction firms, real estate owners — that costs mount inexorably and financing becomes a game of the politically strong shifting costs onto the weak. As Old Dominion enters an era of ever tighter fiscal constraints on state and local government, we need to find a cost model for mass transit that Virginians can afford and a political process that doesn’t leave citizens feeling like they’ve been raped.

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Posted in Transportation

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