Category Archives: Economic development

RVA Meals Tax: Practically Poetic Injustice

by Jon Baliles

As noted, two weeks ago City Council approved the change to city code to make sure the city’s Finance Department only applies meals tax payments to the month for which the invoice is submitted. So, no more of the shady practice that had been applying a portion of say, May’s tax payment, to an outstanding balance from April’s bill. The reason that’s a bad idea is that the city could put any account in arrears but the business owner never knew because the city had a practice of not informing the business they were in arrears, which led to the crazy snowballing of interest and penalties that resulted in bills of $37,000, $50,000, and $68,000.

Samuel Veney, the owner of Philly Vegan, who was told by the city he owed $37,000 in penalties and interest, was eloquent and forceful at the City Council podium on February 12th. He implored Council not only to listen, but to hear what he way saying — he wanted to make sure they heard how he was missing time with his children and spending too much time dealing with the city’s screw-ups instead of working at his business. Said Veney:

What we are saying to y’all right now is to take the opportunity to make change happen. It shouldn’t have gotten this far and now that it has you actually have the opportunity to actually make change happen in a better way for our city. Continue reading

The Case for an RVA Meals Tax Amnesty

Richmond City Hall

by Jon Baliles

Today we are posting a special edition featuring an email from former restaurateur Brad Hemp that he recently sent to City Council about the meals tax fiasco you have probably heard about as a result of seven years of neglect at City Hall. The Mayor raised the meals tax in 2018 to help build new schools and pledged in return he would also help the restaurants. He raised the tax, and three schools were built, but he forgot about helping the restaurants.

Now, here we are, years later, and the only thing coming from City Hall are vacillating and daily changes and pledges to fix the problem on a “case-by-case” basis (in a vain attempt to get the media stories to stop). As someone who lived and breathed the restaurant business (and could teach the Mayor and Council a few things about it), Hemp has some suggestions to fix the mess. The question is, will the Mayor and City Council finally listen and do something?

RVA 5×5 — PREFACE
The best government is almost always the one that listens. It makes it easier for people to enjoy their lives, better their neighborhoods, open or run a business, and have fun. The worst government is almost aways one that pretends to know everything and thus ignores listening to or helping the people by doing things like, just as an example, forcing through a second casino referendum right after the first one lost. Another way to demonstrate bad government is to find straw-man excuses for erroneous billing of residents for personal property, real estate and water, and misapplying payments of meals taxes for restaurants and never notifying anyone when a bill is late while interest and penalties skyrocket. The “leaders” at City Hall say it’s the fault of state code, or the postal service, or bad technology, or the current lunar cycle. Don’t look inward to see if it’s an internal problem, blame it on everyone and everything else. Continue reading

The Aggressive Progressive Democratic Agenda

From tiny acorns grow the mighty oaks of government.

By Steve Haner

The Democrats now running Virginia’s General Assembly are not just more progressive, but far more ambitious than their predecessors. To fully understand how ambitious you must compile the entire list of progressive bills advancing in the 2024 session and consider their total impact on the cost of living and cost of doing business in the commonwealth. Individual news stories miss the big picture.  

The push to radically regulate Virginia’s energy future discussed earlier is being mimicked with equally aggressive legislation throughout the rest of our economy. None of the ideas below are new, and most are already in law in places like California, New York or other more liberal states. What has changed is that when proposed in the past, they usually were rejected in Virginia on a bipartisan basis. Democrats now march in lockstep.  

The Assembly is still in its first phase and adjournment is set for early March. Which of the following will pass remains to be seen, and in many cases, amendments are already appearing. Most may also face gubernatorial veto or amendment, but that just underscores that Virginia is only one election of one official away from total transformation.   

In the case of the bills to increase the minimum wage (here and here), Democrats are simply building upon what they did during their last period of control. But if they succeed in setting future wage increases to automatically grow with inflation, the impact just builds and builds. Classes of employees reasonably exempted from the law currently, such as farm workers, may now be covered, as well.   

Likewise, the previous Democratic majority also took the first steps toward collective bargaining for limited groups of local employees, but only after elected local officials gave a green light to negotiate a contract. This year’s bill expands the right to bargain to almost all local and now most state employees, with no vote needed by a school board or city council. It was revealed that the most recent version does conveniently exempt employees of the General Assembly, however. Continue reading

Rent Control Legislation Passes House Committee

from Liberty Unyielding 

Legislation to allow rent control ordinances has passed a committee in Virginia’s House of Delegates. On a party-line, 11-to-9 vote. The Committee on Counties, Cities and Towns passed HB 721, which defines rent gouging to include raising rent to keep up with inflation, if inflation exceeds 7 percent.

This vote reflects the leftward movement of the Democratic Party. Rent control has historically been prohibited not merely in Republican states, but even in many Democratic states. Massachusetts, for example, banned rent control in a 1994 referendum, even as it was electing Democrats to nearly fourth-fifths of the seats in its state legislature, and even as it elected Democrats to eight of its ten seats in the U.S. House of Representatives. When Georgia still had a Democratic-controlled legislature and a Democratic governor, it banned rent control in 1984.

Yet, all Democrats on the committee voted for HB 721.

The legislation states that once a local government has adopted “anti-rent gouging provisions,” it “shall prohibit any rent increase … of more than the locality’s annual anti-rent gouging allowance,” defined as the “percentage increase in the Consumer Price Index...or seven percent, whichever is less.” So if inflation is 9% — as it was from March 2021 to March 2022 —  the landlord can only raise rent by 7%, at most. And the landlord might not be allowed any inflation adjustment at all, because under the legislation, a local government “may” — not must — “allow rent increases” to compensate for inflation.

So landlords will become poorer and poorer due to inflation under these “anti-rent gouging” ordinances. Continue reading

Congratulations, Virginia, You’re Now a High Tax State.

States with the highest state-local tax burdens in calendar year 2022.

As the debate plays out over Governor Glenn Youngkin’s tax restructuring plan, which includes $1 billion in tax relief over the next budget biennium, rest assured that the opposition party will attack it as a heartless attack on poor and marginalized Virginians with their illimitable unmet needs. In that context, it is worth remembering Virginia’s slow drift from a lower tax/high-growth state into a high tax/slower growth state over the past three decades, and asking if the higher taxes have made life any better.

According to the Tax Foundation, state and local taxes took 12.5% of Virginia’s net product in calendar year 2022 — the eighth-highest percentage among the 50 states. Within living memory, Virginia’s tax burden was in the second-to-bottom quintile. Today we’re in the top quintile. We’re now officially a high-tax state. Continue reading

Subsidizing a Billionaire

Ted Leonsis, owner of the Washington Wizards and Washington Capitals; Gov. Youngkin on left. Photo credit: Virginia Business

by Dick Hall-Sizemore

If approved by the General Assembly and the City of Alexandria, the deal reached between Gov. Glenn Youngkin and the owner of the Washington Wizards and the Washington Capitals for those teams to move from Washington, D.C. to the Potomac Yards site in Alexandria would constitute the largest public subsidy for a sports team in the nation’s history.  That is the conclusion of a report by JP Morgan commissioned by the state, a copy of which was obtained by The Washington Post.

The total estimated cost of the project is $2.2 billion.  The owner of the sports teams, Monumental Sports and Entertainment would contribute $403 million up front.  The City of Alexandria would be on the hook for $106 million.

The state would create a sports and entertainment authority which would own the land and the buildings and lease them to Monumental. The company would sign a 40-year lease with rent beginning at $29.5 million annually and increasing to $34.5 million.  In addition to the arena for the two sports teams, the project would include a concert hall, underground parking, a conference center, a Wizards practice center, and Monumental’s  corporate offices and media station. Continue reading

Deja Vu, All Over Again

by Dick Hall-Sizemore

Virginia is trying again to land a sports facility for a national professional sports team, The Washington Post reports. This time it is an arena for the Wizards of the National Basketball Association and the Capitals of the National Hockey League. Both teams have the same owner and are currently located in Washington, D.C.

The facility would be located in Potomac Yards in Alexandria. (If that name sounds familiar, that is where then-Gov. L. Douglas Wilder tried to lure the Washington Redskins football team 30 years ago.) According to the Post, the arena would anchor a “massive mixed-use development.” A stadium authority would own the facility and lease it to the company that owns the sports teams. There are no public details on potential costs yet. The owner of the Wizards and the Capitals would be expected to put up “hundreds of millions of dollars of its own money,” with the remainder being provided by the authority. The authority would sell bonds to raise the cash and use revenue from ticket sales, concessions, and parking to repay the bonds (theoretically).  Continue reading

Norfolk Hipsters & Lefties Try to Block a Military-Themed Brewery

by Kerry Dougherty

Now is the time. If you believe that cities ought to be open for business, regardless of the viewpoints of the business owners, if you support the military and don’t consider flag-waving a provocative act, you might want to let Norfolk’s City Council hear from you.

On December 12th it is scheduled to vote on the application of Armed Forces Brewery to open its doors on the same premises that housed O’Connor Brewing in the so-called Railroad District of Norfolk.

The business was lured to Virginia by Gov. Glenn Yougnkin who helped the founders secure tax incentives to open their craft brewery in Norfolk rather than in Florida. The owners have pledged that 70% of their employees will be veterans.

Normally, that would be seen as good news in this military town. Continue reading

Virginia Democrats’ Minimum Wage Bill Would Wipe Out Jobs, Especially During Recessions

from Liberty Unyielding 

The Democratic leaders in both houses of Virginia’s legislature have just introduced legislation that would raise the Virginia minimum wage from $12 to $15. The bill also retains provisions that make the minimum wage rise with inflation, while preventing it from ever falling due to deflation. As a result, it could rise further in real terms in the future. This minimum wage increase and further increases in the future could lead to a big spike in unemployment in the next recession.

In a deep recession, prices may fall due to deflation, resulting in a dollar of wages being worth more than it was before. If employers can’t adjust wages to match those falling prices, they may have to lay off many more of their employees, because employers cannot afford to pay rising real wages at a time when the demand for their product is shrinking due to the recession. As Jason Lennard noted in the European Review of Economic History, “In the ‘deflationary vortex’ of the 1930s… sticky nominal wages translated to rising real wages, which resulted in mass unemployment.” Moreover, “minimum wage legislation may have contributed to stickiness by preventing nominal wages from falling.”

Continue reading

More Bad News for the Governor

Yesterday was a bad day for Gov. Glenn Youngkin.  In addition to having to absorb the news about losing both houses of the General Assembly to the Democrats, he learned that the federal General Services Administration has decided to locate the long-coveted new FBI headquarters in Maryland rather than Virginia.  That was bad news for the Commonwealth as a whole, as well.

Casino’s Last Stand: A Nauseating Display of Hate

Downtown Richmond

by Jon Baliles

The second casino referendum will be decided on Tuesday and it will be a vote (again) on whether or not Richmond wants to do the get-rich-quick schemes to help people or do the hard work of methodically mapping out a strategy and building a future. The get-rich-quick schemes like the casino and Navy Hill only benefit the select few, but the promoters promise the world to everyone and benevolence as far as the eye can see — vote for it and approve it for YOUR benefit, they say. It will be better FOR YOU than it will be for us, they boast.

We called B.S. on Navy Hill and we need to do it again with the casino, which will be a predatory drain on the community and do more harm than good, despite what they promise. And this will not be a policy wonky dive into the casino, I promise. That’s because this issue is sadly a nauseating reveal of what the casino developers really think about Richmond and Richmonders, told in their own words.

News came out this week that the promoters of the casino have been going on radio in recent days and trashing everyone in Richmond that does not support the casino. They have spent more than $10 million to try and convince people to vote for it, but they are badmouthing and trashing opponents on their own radio stations for all to hear with vile and offensive an inexcusable comments demeaning people of all kinds — black and white; the rich, middle class and poor; churchgoers, pastors. It did not matter. It was open season on anyone who didn’t support the casino; they especially went after Jim Ukrop and they absolutely thrash Tim Kaine because he voted no in 2021 and said there were better ways to promote economic development in Southside. Continue reading

Virginia Set to Help Taxpayers for a Change

from The Republican Standard

Good news for Virginia taxpayers.

In the coming weeks, several hundred dollars are heading back into the pockets of eligible Virginians. Up to $400 per household will be heading to mailboxes and bank accounts across the Commonwealth thanks to a surplus in the state budget recently signed by Governor Glenn Youngkin.

In a media release issued by his office last week, Governor Youngkin stated.

“As Virginians continue to face inflation and high prices as a direct result of policies out of Washington, D.C., these rebates are an important step going into the holiday season to help Virginians keep more of their hard-earned money for gas, groceries, and essentials.”

NBC4Washington also noted that “the taxation department has an online lookup tool where taxpayers can go to see if they’ll receive a rebate.”

If you enjoy having more control over your own dollars, don’t forget to think about the benefits of having leaders in the state that value the taxpayers as you head to cast your ballot in the state and local elections this year.

Republished with permission from The Republican Standard. 

Resorts Like Airports

by Jon Baliles

There has been a lot of boasting from the casino advocates about their partnership with Kentucky-based Churchill Downs, Inc. (CDI). The rebranded Richmond Grand casino developer Urban One is a radio and TV conglomerate that has said they are partnering with CDI because of their huge capitalization and experience with casinos. But let’s take a look at Churchill Downs’ casino portfolio, because it’s not what the casino advocates have been claiming.

CDI is obviously world-famous for the running of the Kentucky Derby horse race, and they have expanded their portfolio to include more and more gaming facilities in recent years. CDI bought out Peninsula Pacific Entertainment (PPE) in a $2.75 billion deal in 2022, and PPE had been Urban One’s original partner in the first, failed casino referendum. The deal included the Colonial Downs Racetrack in New Kent, as well as six Rosie’s Gaming Emporium historical horse racing facilities across Virginia plus two smaller casinos, one in Iowa and one in New York. But among the eleven casinos in the CDI portfolio, none are anywhere near the scale what they promise for Richmond. And none of those eleven casinos resemble anything grand — except for the indisputable fact that the house always wins, even if the resort looks more like an airport.

The Richmond Grand advocates claim their casino will have a 250-room hotel, an entertainment/concert venue with 3,000 seats, a TV and film production soundstage, and 15 restaurants and “dining options.” But if you look at their other casinos, they are all small casinos in small markets and are not even close to the “resort” they claim to be bringing to Richmond. Continue reading

Deep Dive: Casinos, Highways, and Ignoring RVA Voters

Downtown Richmond

by Jon Baliles

Republished with permission from RVA 5×5.

They say the past is prologue and that if you don’t learn from history, you are doomed to repeat it, among other famous quotes that have stood the test of time. And they have a factor of truth and lesson in them. And so is the case with next month’s casino referendum, the second one we have had the chance to vote for because the first one was ignored by city leaders in 2021.

This Deep Dive is a look back at the last time Richmond faced two referendums on one topic in short succession — the people were asked to vote to register their voice and they said no to the city leaders, planners, and business leaders. Both times, the people’s voice was ignored, and both times the city leaders overruled their vote and their voice and pursued their plans irrespective of the results — with disastrous and long-lasting consequences.

This may be starting to sound familiar. Continue reading

Incapable at Least; Incompetent at Worst

by Jon Baliles

The Richmond casino referendum this week was once again in the forefront of the news but not because of the impending vote or the discussion of the numerous proposed “benefits” the casino advocates have promised every group under the sun. No, this week it was made known that the company driving the effort to approve the casino referendum (again) is facing the possibility of being delisted by NASDAQ.

Nevertheless, the casino advocates assure all of the potential voters that they will be able to pay the city the $26 million up front payment within 30 days of the approval of the referendum (as spelled out in the agreement), AND build their proposed $562 million casino, AND provide $30 million to the city tax coffers every year from here to eternity, AND still pay off all the organizations and groups and investors they are promising largesse to win approval of the second casino referendum.

No promise is too big, no cost is too high, and no vote is too expensive. Continue reading