Category Archives: Budget

State Revenue Surges, but Growth Not Sustainable

Posted on June 14, 2013 by James A. Bacon| 3 Comments
Woo hoo! Enjoy it while it lasts.

Woo hoo! Enjoy it while it lasts.

by James A. Bacon

There’s good news on the state budget front. Governor Bob McDonnell announced yesterday that thanks to a spike in May collections, General Fund revenues have grown 6.0% through May, ahead of the 3.6% forecast growth. The fiscal year ends in June.

While advising caution, McDonnell said, “At this moment, it does appear Virginia is on track to meet, and exceed, budget projections, and to post a fourth-straight revenue surplus.”

McDonnell deserves credit for cautious budgeting. His stewardship of the General Fund may prove to be his greatest accomplishment as governor. But it’s premature to break out the confetti. Virginia’s fiscal challenges are hardly over. Much of this year’s revenue surge resulted from a one-time influx of income tax revenue as  investors shifted income to 2012 in order to beat the higher federal tax rates that went into effect in 2013. Sales tax revenues, by contrast, have increased far more modestly.

That’s why it’s a bit discouraging to hear this kind of self-congratulatory, press-release boilerplate from the governor, which implies that Virginia is on some kind of fiscal roll:

Revenue is up; unemployment is down. This is more good news for Virginia’s economy. Over the past three years we’ve seen our state unemployment rate fall to 5.2 percent; the lowest mark in Virginia in 4 ½ years. During that time over 171,000 net new jobs have been created in the Commonwealth during that period; 151,000 of those jobs are in the private-sector. Put simply: more Virginians are working, and that increase in employment is reflected in the growth in state revenue collections.

True, more Virginians are working. According to a June 13 report by Secretary of Finance Richard D. Brown, payroll employment rose 1.1% year from April 2012 50 April 2013. But that 1.1% increase in employment doesn’t come close to explaining the 7.7% increase in individual income taxes through May. Rising wages may account for another two or three percentage points, but the rest is likely tax-avoidance behavior. Next year will not look as good.

On the other hand, the 6.0% increase in Virginia’s General Fund revenues from all sources so far this year handsomely exceeds the national average for the 50 states, which the National Governors Associations pegs at 4.2%. A modest amount of back-patting may be in order.

But a new report, “The Fiscal Survey of States,” projects general fund revenue growth for all states to slow to 2.8% next fiscal year. Meanwhile, federal funding for state budgets remains problematic — a theme I explored in the previous blog post. States the NGA:

Federal funds flowing to states declined for many programs in accordance with sequestration, the automatic across-the-board federal budget cuts that went into effect on March 1, 2013. Although most major federal grant programs that provide funds to states, such as Medicaid, are exempt from the automatic budget cuts, the lower caps on federal spending in place for federal fiscal year 2014 and beyond could significantly impact a number of state grant programs; in most instances, states will not have the resources to compensate for fewer federal dollars.

It looks like a whole lot of ugly going forward. There is no magic money tree to make life easier on the General Assembly. Let us be thankful for a healthy close to Fiscal 2013 and prepare ourselves for a tougher 2014.

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Posted in 2013, Budget, Taxes

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Don’t Look to Uncle Sam for Help

Posted on June 14, 2013 by James A. Bacon| 1 Comment

aei_reportby James A. Bacon

One of the reasons I’m so pessimistic about the long-term fiscal health of state and local governments is that they rely so much on federal funding to sustain ongoing operations. The perilous state of affairs is highlighted in a new American Enterprise Institute (AEI) report, “State and Local Spending: Do Tax and Expenditure Limits Work?”

The main thesis of the report is that Tax and Expenditure Limits (TELs), a mechanism often favored by conservatives to control the growth of government, do not work. That argument, by the way, is worth a blog post in its own right.  Fiscal conservatives in Virginia often have floated the idea of limiting the growth in state spending to the rate of inflation plus population growth. I’ve always had reservations about the idea — for the very reasons that AEI points out. Such a cap would be a mechanical solution that would not address underlying fiscal pressures. Politicians would be sorely tempted to engage in all manner of accounting skulduggery in order to live within the cap. I’m not the least bit surprised that author Benjamin Zycher concludes, after analyzing 30 states that have tried TELs, that “the ineffectiveness of TELs is unambiguous.”

Capping expenditures does not solve underlying problems like the exploding pension burden, high and rising Medicaid expenditures or the ballooning cost of K-12 or higher education, all of which require micro-level surgery to fix, not a blunt hammer.

One challenge facing state and local governments is their increasing reliance upon the federal government during a time of increasing fiscal austerity. I emphasize this finding in the AEI report because it buttresses my argument to state and local officials in Virginia that things ain’t likely to get any easier. As can be seen in the graph below, federal transfers as a percentage of total state and local outlays have increased pretty steadily since 1986.

federal_dependency

Some of that increase can be attributed to the soaring cost of financing the Medicaid program. State governments depend upon Uncle Sam for more than half their Medicaid expenditures.

It is highly improbable that federal generosity to state and local governments can continue on the same trajectory of the past 16 or 17 years. Indeed, it is far more likely, given the expansion of entitlement spending, crowding out of discretionary spending and challenge of managing a $17 trillion national debt, that the federal government will be forced to curtail non-Medicaid aid to states and localities in future.

Here’s what the feds contributed to states and localities in 2011:

General public service               $2.5 billion
National defense                           4.1 billion
Public order and safety                7.1 billion
Economic affairs                         19.6 billion
Housing and comm. affairs      22.7 billion
Medicaid                                    259.2 billion
Non-Medicaid health                24.6 billion
Recreation and culture                0.5 billion
Education                                     63.5 billion
Income security                        497.8 billion

Take a good look, people. If reason prevails, what you’re getting now from Uncle Sam is about as good as it’s going to get. If reason does not prevail (we’re talking about Congress, after all), the ultimate reckoning will be all the worse.

Maintaining our Business As Usual policies amounts to willful negligence and governmental malpractice.

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Posted in 2013, Budget, Federal, Taxes

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Yet Another Owner for Richmond’s Unwanted Road

Posted on June 14, 2013 by Peter Galuszka| 14 Comments

pocahontasBy Peter Galuszka

Richmond’s “Road to Nowhere” is about to get yet another owner, showing again how the public-private partnership craze can result in unneeded transportation projects while denying resources elsewhere.

Australia’s Transurban which owns Route 895, otherwise known as “Pocahontas Parkway” is dumping the tollroad it picked up in an emergency financial deal in 2006. At that time, the highway that connects Interstates 95 and 295 southeast of Richmond was so underused that it was about to take down the state’s stellar credit rating.

But Transurban hasn’t been able to make a go of it despite tolls of up to $3.25 per car for a short drive through the fields of eastern Henrico County. The firm plans on selling it to a consortium of European banks that have $300 million in debt. The project also owes the feds $150 million for a loan.

The Pocahontas Parkway was the pioneer project for the Public-Private Partnership Transportation Act of 1995, which has been heralded as a nation-beater and a way to have your cake and eat it too as far as road financing. The allure was that you could build roads and have the private sector manage them and help pay for them through tolls.

Problem was, nobody seems to need the highway. It was billed as a way to expedite I-95 traffic to I-64 and I-95 around Richmond and perhaps open up relatively untapped areas east of the city for suburban sprawl development which hasn’t really happened.

The Richmond Establishment is loath to admit this, but the Richmond airport which has undergone a big expansion is not getting the flights and traffic it had hoped for. The Parkway was supposed to have helped promote the airport by providing easier access to it.

PPPT funding has been replicated in other areas in Northern Virginia and Hampton Roads, but a Portsmouth judge seems to have finally put a legal dagger through  the heart of the program by ruling that in the case of a local tunnel project, the state had unconstitutionally given its authority to tax to a private entity.

It isn’t clear what the ruling means for the PPT program, but the gist is clear. Democrats and Republicans alike want to live a fiction that you can transfer the state’s traditional responsibility to raise taxes and build roads and hand it over to private interests. It seems such a sweet arrangement – you get to keep Virginia from having to raise taxes, avoid violating the no-tax dogma  and not piss off voters while getting highways and construction jobs. It sounds too good to be true and it is.

Oh well. I wonder who will inherit the White Elephant when the European banks can’t make it work either.

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Posted in Budget, Demographics, Economic development, Economy, Energy, Environment, Finance, Infrastructure, Land use & development, Planning, Taxes, Transportation

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The Case Against the Meals Tax

Posted on June 12, 2013 by James A. Bacon| 32 Comments
Henrico County... 400 years old and counting... with a mindset to match.

Henrico County… 400 years old and counting… with a mindset to match.

by James A. Bacon

Even to those who know him and love him, Sidney Gunst is a wild man. Friends never know what cause he will embrace next and pursue with his trademark (as in, monomaniacal) enthusiasm. Luckily for the taxpayers of Henrico County, he has embarked upon a crusade to block a proposal to institute a 4% meals tax that would raise an estimated $18 million a year.

Although Gunst is hardly alone in opposing the tax — local restaurateurs are none too happy with it either — his is the face of the resistance. The Innsbrook office park developer has galvanized opposition to a measure that the county political establishment and much of the business community have aligned themselves with. When civic groups hold debates on the tax, Gunst is the man they invite to represent the contras.

No one denies that Henrico faces major fiscal challenges. County officials are scrambling to find the funds to pay for massive unfunded pension liabilities, federal storm-water management mandates and soaring employee health care costs. And there is no question that county officials have taken extensive belt-tightening measures. The county is operating on less money than it spent six  years ago.

But Gunst is not satisfied. He doubts the tax will come close to addressing the county’s long-term fiscal challenges. The tax is a Band-Aid, a short-term palliative, a way for elected officials to kick the can down the road and avoid making the really tough decisions or engage in the creative thinking that Henrico County needs in order to transition to a 21st-century philosophy of governance.

Gunst make several compelling points.

First, Henrico’s vow to dedicate tax revenues for public schools and the teachers is a political gimmick. In January, county officials were positioning the tax as necessary for road maintenance. But the 2013 transportation funding bill provided millions in relief for Henrico, so the pols switched rationales. And what could be more mom-and-apple-pie than securing teacher pensions? That’s pure packaging. As Gunst explains, money is fungible. While the $18 million in meals tax revenue might be locked in for teacher pensions, there is nothing to prevent the Board of Supervisors from backing out all or part of the $18 million — a sliver of the half billion-dollar school budget — that it had been paying before!

Second, if taxes must be raised, then jack up the property tax instead. Imposing the meals tax is like shooting a fire-and-forget missile. It will be permanent and the board likely will not revisit the issue. By contrast, the board sets the property tax every year. A meals tax would allow the board to dodge yearly accountability. By nixing the tax, taxpayers can better hold supervisors’ feet to the fire on spending and budgeting decisions.

Which brings us to the third point. The Henrico board is stuck in a rut. Board members are old and out of ideas. Henrico mastered the art of 20th-century governance. By conventional standards, the administration runs a tight ship. But the real estate crash and 2007-2008 recession ushered in a new era of austerity. Americans cannot continue business as usual. If Henrico is to prosper in the years ahead, it must re-think fundamentals.

Gunst doesn’t pretend to have all the answers — right now he’s just trying to defeat the meals tax. But he does offer areas worth exploring. Schools account for more than half the county budget. Why can’t we do more for less? The nation is in the midst of an educational revolution, with Massively Open Online Courses, free online content like the Khan Academy and so much more, all transforming the way people learn. Instead of teaching the way we’ve always taught — with laptops replacing textbooks — let’s unleash teacher creativity to incorporating online resources into their pedagogy. The Henrico school system was one of the first in the country to buy laptops for every high school student. Let it be one of the first to tap the online revolution to transform the learning experience.

That’s just the beginning, says Gunst. Henrico needs to push for reforms to the Virginia Retirement System, accelerating the shift from a Defined Benefits plan to a Defined Contribution plan. The county needs to review its real estate portfolio and sell excess property. It should look for functions to outsource or privatize. And (most importantly, in my book) the county needs to broaden its tax base by encouraging re-development and infill at greater densities. Gunst has been a player in the plan to transform Henrico’s main business district, Innsbrook, by means of walkable, mixed-use development. Other parts of the county are well-suited to re-development as well, such as the area around the Staples Mill train station, the busiest Amtrak station in the Southeast.

There is no lack of opportunities, if only Henrico would grasp them. A meals tax would anesthetize the local politicos to the need for fundamental change. Come November, Henrico voters need to reject the meals tax and demand more from  their leaders.

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Posted in 2013, Budget, Education (K-12), Governance reform, Government workers and pensions, Infrastructure, Land use & development, Taxes

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Everything’s Big in Texas, Including Spending and Borrowing

Posted on June 10, 2013 by James A. Bacon| 23 Comments
Big spender

Big spender

Texas has been stomping every other state, including Virginia, when it comes to job creation. Some of that’s due to the oil-and-gas boom, some to a favorable tax and regulatory structure. And some, no doubt, can be attributed to the splurge in state and local borrowing and spending. Writes Steven Malanga for City Journal:

While Texas’s state government debt is relatively modest—just $40 billion, or $1,577 per resident—local government debt is more than four times higher: $192 billion. That’s $7,505 per capita, according to Combs’s report—the second-highest sum in the nation, behind only New York’s municipalities and far ahead of third-place California’s. Over the last decade, moreover, local debt has increased 144 percent, much faster than the rate of population increase plus inflation.

One of the larger categories of spending is for… high-school sports stadiums. More than 100 high school stadiums have opened in the past five to six years; a single project in Allen, Tex., is costing $60 million.

That spending creates a lot of construction-related jobs, but it saddles local governments with liabilities that eventually must be repaid. Meanwhile public employee pension liabilities are soaring.

In Austin, the cost of fringe benefits—consisting mostly of pension contributions and health-care spending—has exploded over the last decade, from 15 percent of the city’s budget to 30 percent. Those cost increases, according to a report in the Austin American-Statesman, are partly to blame for a sharp increase in property taxes—38 percent over the decade.

Virginia has a lot of misplaced investment priorities, but at least we’re not borrowing millions to fund a wave of high-school stadium construction, and we have made real, if incomplete, progress in tackling our own pension liabilities. While our track record in job creation may be more modest than Texas’, hopefully it is more sustainable.

– JAB

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Posted in 2013, Budget, Finance, Infrastructure, Taxes

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Dead End Thinking in the Richmond Region

Posted on June 2, 2013 by James A. Bacon| 19 Comments
Photo credit: Times-Dispatch

Photo credit: Times-Dispatch

by James A. Bacon

Sometimes, I despair for the transportation future of the Richmond region. If there is a problem, the first instinct of our civic leaders is to raise taxes to subsidize initiatives of unknown economic viability.

The latest case in point is a set of recommendations issued by a work panel to the Capital Region Collaborative. The panel,  headed by former Transportation Secretary Whittington W. Clement, wants to win backing from regional legislators for the same kind of deal won by Northern Virginia and Hampton Roads this year to raise local taxes and generate more money for transportation improvements.

The panel also endorsed the creation of a Downtown Circulator bus route, “bus bridges” linking Main Street Station downtown to the Staples Mill AMTRAK station and Richmond International Airport, and a Bus Rapid Transit system along Broad Street, according to Michael Martz’ reporting in the Saturday Times-Dispatch.

Wow, we’ve just raised transportation taxes in Virginia, with a significant share of $3.5 billion in statewide revenues coming our way over the next six years, and we’ve already concluded that we need more money? Well, if our transportation priority is subsidizing more bus routes that Richmonders may or may not use, maybe we do need more money.

The thought process appears to go like this.

Step One: We have a transportation problem.
Step Two: Only government can solve the problem.
Step Three: But government needs more money.
Step Four: Raise taxes.

If I assembled a group of legislators, here’s what would be on my agenda before I started talking about raising taxes.

  • Let’s talk about where we can rezone for more walkable, higher-density corridors that can support mass transit without the need for operating subsidies. The Urban Land Institute just held a “Reality Check” exercise in which the overwhelming consensus was to concentrate new development. Let’s build on that.
  • Let’s discuss how to open up the transit system to more innovation and competition. Can privately operated buses, jitneys and “e-hail” services be part of the region’s transportation solution?
  • Let’s explore how the smart-phone revolution can promote carpooling and shared car-ownership services.
  • Let’s see if we can inexpensively expand the network of bike lanes and bike paths.

Local governments in the Richmond region are under incredible fiscal stress. My home county of Henrico proposes to create a meals tax to cover the looming fiscal gap. Does it really make sense to add new infrastructure and new transit services that will only increase the ongoing cost of maintenance and subsidies? That is dead-end thinking. We must do better.

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Posted in 2013, Budget, Infrastructure, Land use & development, Taxes

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How Good Is Chmura’s Economics Data?

Posted on May 29, 2013 by Peter Galuszka| 8 Comments

chmuraBy Peter Galuszka

In the 40 months since Robert F. McDonnell has been in office, the launch of many of the governor’s policy initiatives seems to be accompanied by a press release touting the supportive findings of a small, Richmond-based research firm named Chmura Economics & Analytics.

When McDonnell was pushing his transportation plan to come up with $3.4 billion road funding by eliminating the gasoline tax and increasing the sales tax, the Chmura firm was hired to research the impacts. The results were glowing: McDonnell’s signature plan would eventual result in 13,058 new jobs and $9.5 billion investment.

When McDonnell and his Transportation Secretary Sean Connaughton wanted a $1.4 billion toll road linking Petersburg with Suffolk near U.S. 460 that not many other officials seemed too keen about, Chmura served up a report saying it would create 14,000 jobs, including more than 8,000 jobs from advanced manufacturing or automotive firms that would locate by the end of the decade at two “megasites” in Isle of Wight and Sussex counties. A little problem: the Isle of Wight site is just gearing up and the one in Sussex hasn’t been built yet.

There are other examples of questionable data in Chmura reports involving the Redskins moving its summer training center from Ashburn to Richmond and in the capital pitching a 2015 international bicycle race. The former involved considerable monetary incentives to the rather wealthy Redskins NFL club.

The economics firm is headed by Christine Chmura, an economics Ph.D. with impeccable credentials at a Richmond bank and the Federal Reserve. Fourteen years ago, she founded her firm and built it up in this state and in her native Ohio. She is a popular speaker on the economics and policy circuit. (Full disclosure, when I edited a business magazine about 10 years ago, I hired Chris several times for economic analysis and was pleased with the results).

There does seem to be something wrong and when I wrote a cover this week for Style Weekly, I detail some of the issues. Style filed Freedom of Information Act requests and we reviewed some of the Chmura contracts. The Virginia Department of Transportation some her firm’s payments, including one for the new toll road, under “advertising/public relations.”

Read more here.

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Posted in Budget, Demographics, Economic development, Economy, Energy, Environment, Finance, Infrastructure, Land use & development, Money in politics, Politics, Taxes, The Economy

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McAuliffe’s Offshore Drilling Flip-Flop

Posted on May 28, 2013 by Peter Galuszka| 16 Comments

offshore-oil-rigBy Peter Galuszka

Terry McAuliffe’s flip-flop on opposing offshore oil drilling in Virginia is unsettling given that the last time the Democrat ran for governor in 2009, he seemed skeptical of drilling for oil although he thought searching for natural gas might be beneficial.

He apparently changed his position because he’s been with fresh legislation proposed by Mark Warner and Tim Kaine, his fellow Democrats in the U.S. Senate. Their bill would mandate that roughly half of any revenues from offshore petroleum either go to Virginia or to federal conservation programs in the state with the remainder going to Washington.

The Warner-Kaine bill would make Virginia’s cut from any potential revenues more in line with what Gulf Coast states get, but it puts pressure on the Obama Administration to speed up leasing for oil and gas drilling rights which had been delayed until 2017.

It would be hard for McAuliffe, now embroiled in a tough fight against Republican Atty. Gen Kenneth Cuccinelli , to go against two popular Democrats who pretty much paved the way for his candidacy.

That, however, doesn’t mean that any of the Democrats is making a wise move.

There was a collective sigh of relief in 2010 when Obama put East Coast leasing plans on ice following the blow-out and huge spill at the Deepwater Horizon platform in the Gulf of Mexico, which killed 11 workers and fouled local seafood and tourist beaches. Gov. Robert F. McDonnell was forced to shelve part of his plans, notably offshore drilling, to make Virginia the “Energy Capital of the East Coast.”

It turns out that Democrats want to do the very same thing and it’s a bad idea.

For starters, there’s no serious evidence that there is much oil offshore, although there are indications that natural gas deposits might be available. So, oil and gas drilling don’t currently contribute anything to the state’s economy and may never.

What do contribute are sectors such as tourism ($200 billion in 2011), seafood ($191 million in 2011) and the Navy ($15 billion in 2009). These industries and the jobs they bring the state are cold, hard facts. A Deepwater-sized spill could do enormous damage to beach resorts and fishing. The Navy is worried that most of the areas that could be leased would impede combat training which involves explosives and aircraft carrier operations.

Some experts believe that not enough has been done to bring offshore drilling safety operations and technology much beyond the level when the Deepwater blast occurred.

Environmentalists point out that extending offshore drilling to Virginia and the East Coast only prolongs America’s dependence on nonrenewable fossil fuel. But there’s a more immediate problem. Thanks to new onshore drilling technologies, the U.S. is suddenly brimming with natural gas and shale oil. The new additions are turning global energy markets on their heads.

Why go for more off the same off  of Virginia considering the risks to existing and robust industries?

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Posted in Budget, Disaster planning, Economy, Energy, Environment, Federal, Finance, Infrastructure, Money in politics, Planning, Public safety & health

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The Fiscal Benefits of Smart Growth

Posted on May 21, 2013 by James A. Bacon| 17 Comments

better_budgetsby James A. Bacon

Compared to conventional suburban development, smart growth development can save 38% in up-front infrastructure costs and 10% of the cost of supporting police, ambulance, fire and other public services, according to a new report by Smart Growth America (SGA). At the same time, concludes “Building Better Budgets,” smart growth generates 10 times more tax revenue per acre.

In 2010, state and local governments spent $1.6 trillion, including $525 billion on projects and activities heavily influenced by human settlement patterns and another $250 billion on capital projects. Apply the SGA findings to those numbers and the implication is that adopting smart-growth strategies could save state and local governments $100 billion or more per year while simultaneously bolstering revenues.

Smart growth advocates have long claimed that compact, walkable, mixed-use neighborhoods are more fiscally efficient for local government than conventional suburban development characterized by low-density and segregated land uses. While anecdotal evidence is abundant, it has been difficult to back up smart growth claims with comprehensive data. For this report, the SGA conducted a meta-analysis of 17 case studies comparing smart-growth to conventional surburban scenarios over the past 10 to 15 years.

“In case after case, localities determined that smart growth reduces costs,” the report concludes. “In some cases the savings were modest, in some cases the savings were significant.”

The reason for the savings in capital cost is straightforward, explained Bill Fulton, SGA vice president and director of policy, in a Tuesday conference call. Smart growth consumes less land. Because smart growth is more compact, it requires fewer lane-miles of roads and fewer linear-feet of water and sewer line.

The savings in operating costs are almost as direct. The cost of delivering services such as fire, police, rescue, snow plowing and school busing varies in proportion to how much driving is required. The fewer the number of miles that vehicles drive, the lower the cost of services, Fulton says. There is a second layer of savings as well. More compact development can reduce the number of cars, trucks and even the number of stations needed to serve a given population.

For instance, a Charlotte, N.C., study found that fire stations could maintain their five-minute response times for more households in areas with compact development and strong street connectivity than in low-density suburbs with cul de sacs. The initial cost of building a fire station is about $6.5 million and the annual cost to operate it is about $2.5 million. The number of households served by each of the city’s fire stations ranged from 6,000 to 27,000 and the annual operating cost varied from $159 to $750 per household. If Charlotte were built out according to smart growth standards, the city could eliminate the need for two fire stations at a savings of  $13 million per year and $8.4 million in annual operating expenses.

Chris Zimmerman, a member of the Arlington County board, credited the county’s steady pursuit of smart growth (even before it was called smart growth) over the past 40 years for the lowest property tax rate of any Northern Virginia county. Eleven percent of the land built around Metro stations contributes about half the county’s tax revenue. The resulting revenue gusher since the 1990s has allowed Arlington to spend more freely than its neighbors on public services.

“In tax terms,” said Zimmerman, “we’re eating their lunch. We’re known as the People’s Republic of Arlington — not shy about spending public dollars. We spend more on our schools than anyone in sight, pay more for teachers and principals, and yet we have the lowest tax rate in Northern Virginia.”

A Nashville, Tenn., study conducted for the “Building Better Budgets” report compared three developments in Davidson County: Lenox Village, a greenfield New Urbanist project; Bradford Hills, a conventional suburban development; and The Gulch, a downtown infill development. The New Urbanist development was the most cost efficient at $1,300 per year per unit to provide government services, followed closely by The Gulch at $1,400 per unit. Bradford Hills, the suburban project, cost $1,600 per year.

A fiscal analysis conducted by the Strategic Economics consulting firm determined that at full build-out, The Gulch would have a net positive impact on the Nashville-Davidson metropolitan general fund of $116,000 per acre. Lenox Village would have a positive impact of only $780 per acre, and Bradford Hills was essentially break-even at $100 per acre.

To facilitate walkable, mixed-use development, Nashville has implemented form-based zoning codes downtown and along major corridors, said Rick Bernhardt, executive director of the Metro Nashville Planning Department. “If you compare over the last eight years, the value of appraised property in Davidson County is up 30% — 115% in areas where we put new codes in place.”

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Posted in 2013, Budget, Infrastructure, Land use & development, Taxes, Transportation

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Whatever Happened to Boomergeddon?

Posted on May 21, 2013 by Peter Galuszka| 6 Comments

By Peter Galuszka

And now for something completely different.

I read with great interest James A. Bacon Jr.s “Boomergeddon” work a couple of years ago. It printed a very bleak picture of our financial future and Jim says, “We need to cut hundreds of billions of dollars” from the federal budget.

But something has been bugging me for about a week now — news that the federal budget is actually shrinking faster than expected.

I’m not making this up. It comes from the Congressional Budget Office. It is supposed to be down to $642 billion by October and may fall to $400 billion a year or so after that, according to new projections. I gather the government is collecting more taxes, even though Apple, like General Electric, manages to pay little if any, which conservatives hate to bring up.

If I recall, the worst deficit was about $1.3 trillion. According to Jim, Obama says it will go down and then bounce up to $1 trillion by the end of the decade if there is no recession. “The reality is that a recession is inevitable,” Jim writes.

I can’t claim to know if there will be a recession  before 2020 but the new budget deficit projections show the deficit growing back to the level of about $750 billion (not $1 trillion as was apparently forecast earlier).

I hate to be a nag, but where was Mr. Bacon when the news came out that the budget deficit was shrinking faster than expected and that this puts a damper in the urgency to cut budgets again and again?

So there it is. On the table. I’m counting off 10 paces. Your draw, Jimbo!

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Posted in Blogs and blog administration, Budget