Category Archives: Planning

The Huge Controversy Over Gas Pipelines

atlantic coast pipeline demonstratorsBy Peter Galuszka

Just a few years ago, Gov. Terry McAuliffe seemed to be a reasonable advocate of a healthy mix of energy sources. He boosted renewables and opposed offshore oil and gas drilling. He was suspicious of dangerous, dirty coal.

Then he started to change. During the campaign last year, he suddenly found offshore drilling OK, which got the green community worried. But there’s no doubt about his shifts with his wholehearted approval of the 550-mile Atlantic Coast Pipeline proposed by Duke Energy, Piedmont Natural Gas and AGL Resources, along with Richmond-based Dominion, one of McAuliffe’s biggest campaign donors.

The $5 billion Atlantic Coast Pipeline is part of a new phenomenon – bringing natural gas from the booming Marcellus Shale fields of Pennsylvania, Ohio and northern West Virginia towards busy utility markets in the Upper South states of Virginia, North Carolina and parts ones even farther south. Utilities like gas because it is cheap, easy to use, releases about half the carbon dioxide as coal, which is notorious for labor fatalities, disease, injuries and global warming.

The Atlantic Coast Pipeline would originate at Clarksburg, W.Va. (one of my home towns) and shoot southeast over the Appalachians, reaching heights of 4,000 feet among rare mountain plants in the George Washington National Forest, and then scoot through Nelson, Buckingham Nottoway Counties to North Carolina. At the border, one leg would move east to Portsmouth and the Tidewater port complex perhaps for export (although no one has mentioned that yet). The main line would then jog into Carolina roughly following the path of Interstate 95.

It’s not the only pipeline McAuliffe likes. An even newer proposal is the Mountain Valley Pipeline that would originate in southern West Virginia and move south of Roanoke to Chatham County. It also faces strong local opposition.

atlantic_coast_pipeline mapThe proposals have blindsided many in the environmental community who have shifted some of their efforts from opposing coal and mountaintop removal to going after hydraulic fracking which uses chemicals under high pressure and horizontal drilling to get previously inaccessible gas from shale formations. The Marcellus formation in Pennsylvania, New York, Ohio and West Virginia, the birthplace of the American oil and gas industry, has been a treasure trove of new gas.

The fracked gas boom has been a huge benefit to the U.S. economy. It is making the country energy independent and has jump started older industries in steel, pipe making and the like. By replacing coal, it is making coal’s contribution to the national energy mix drop from about 50 percent to less than 40 percent and is cutting carbon dioxide emissions that help make for climate change.

That at least, is what the industry proponents will tell you and much of it is accurate. But there are big problems with natural gas (I’ll get to the pipelines later). Here’s Bill McKibben, a Middlebury College professor and nationally known environmentalist writing in Mother Jones:

Methane—CH4—is a rarer gas, but it’s even more effective at trapping heat. And methane is another word for natural gas. So: When you frack, some of that gas leaks out into the atmosphere. If enough of it leaks out before you can get it to a power plant and burn it, then it’s no better, in climate terms, than burning coal. If enough of it leaks, America’s substitution of gas for coal is in fact not slowing global warming.

Howarth’s (He is a biogeochemist) question, then, was: How much methane does escape? ‘It’s a hard physical task to keep it from leaking—that was my starting point,’ he says. ‘Gas is inherently slippery stuff. I’ve done a lot of gas chromatography over the years, where we compress hydrogen and other gases to run the equipment, and it’s just plain impossible to suppress all the leaks. And my wife, who was the supervisor of our little town here, figured out that 20 percent of the town’s water was leaking away through various holes. It turns out that’s true of most towns. That’s because fluids are hard to keep under control, and gases are leakier than water by a large margin.

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The Emerging Exurban Dead Zone

Hope Plantation, Bertie County, N.C., circa 1800. The McMansion of its day.

Hope Plantation, Bertie County, N.C., circa 1800. The McMansion of its day.

by James A. Bacon

The Northern Virginia exurbs, like exurbs across the country, are cruising for a bruising. EM Risse would never express himself so inelegantly or imprecisely but that’s the thrust, in colloquial terms, of a new essay, “The Great Submergence,” he has posted on his website.

The United States economy, argues Risse, a former Bacon’s Rebellion contributor, is in the midst of a profound shift — what he calls the U Turn — away from the scattered, low-density pattern of growth widely referred to as “suburban sprawl” (a label he avoids as a “core confusing word”) toward infill and re-development of the nation’s urban cores. This trend, which is taking place for reasons amply documented on this blog, has profound implications for homeowners and political jurisdictions on the metropolitan edge where landowners, developers and speculators valued land with the expectation that it would be developed some day into shopping centers, office parks and residential subdivisions.

Given the cost of providing transportation, utilities and municipal services, the logical limit for development in the Washington metropolitan region is about 20 to 35 miles from the metropolitan center in Washington, D.C., Risse writes. Land beyond that limit, he contends, is experiencing collapsing demand as people seek to live closer to the metropolitan core, closer to jobs and amenities in walkable communities with more transportation options. That collapse he calls “the Great Submergence.”

Some clusters of development may adapt and survive but others will be economically unsustainable and wilt away. Another phrase for “wilt away” would be “dry up and blow away,” just like western mining towns when the claims ran dry, just like Great Plains farming towns during the Dust Bowl and Depression. Risse’s home town of Warrenton, he warns, is the “bulls eye of the danger zone.”

As demand evaporates for single-family dwellings on large lots in remote locations, land and housing prices will fall. Every new single-family dwelling built in Greater Warrenton-Fauquier (and other communities situated more 25 to 30 miles from the metropolitan center) will serve to drive down the value of existing properties. Writes Risse:

The downward trend will be exacerbated by the fact that there are dwellings selling BELOW their replacement cost. Further, there will be many scattered Units that have not been maintained, which will further deflate the market via assessment / appraisal “comparables.”

Declining land and improvement values, he says, will have a devastating impact on municipal tax bases in this exurban dead zone as well as household net worth, much of which is composed of housing equity.

Bacon’s bottom line: I’m in 95% agreement with Risse. The reason I hesitate to say 100% is that there are powerful forces at work to sustain “sprawl,” the most important of which is the slow pace, due to zoning restrictions, at which urbanized jurisdictions close to the Washington metropolitan core can free more land for more compact, higher-density development. If demand for housing exceeds supply in Washington’s urban core, growth will default to exurban communities (beyond the 25-mile radius) planned and approved in the 2000s simply because there is nowhere else to build.

With that caveat aside, I share Risse’s larger concern. A dozen or more exurban counties on the metropolitan fringe of Washington, Richmond and Hampton Roads are likely to experience deflating land values, shrinking real estate property revenues and chronic fiscal stress. Their scattered, low-density settlement patterns have high embedded costs and local governments will be hard-pressed to maintain the supporting services and infrastructure. Once the newness wears off and depreciation sets in, these places will become worn, shabby and dilapidated.

Driving back from vacation on the North Carolina coast a couple of weeks ago, I passed through a dozen hamlets and crossroads in farming communities. I was shocked to see so many boarded up and tumble-down buildings that property owners had simply abandoned. The knowledge economy has passed these inland communities by. Sure, the real estate is cheap but no one wants to live there anymore. The houses don’t even have for-sale signs on them. The price of better houses is so low that it’s not even worth patching up the decaying ones. Virginia’s exurbs have not reached that stage yet. But give them time. Let the shiny newness wear off. In 20 years, we could see the same thing.

Those who miss Risse’s writing on Bacon’s Rebellion should check out the “Current Perspectives” on his website.

Update: Ed Risse has responded to Larry Gross’ comments on this post in the form of an essay, “Blogging, Geographical Illiteracy and the Great Submergence.”

Maureen McDonnell and Sexism

maureen_and_bob(1)By Peter Galuszka

Sitting for hours listening to former Gov. Robert F. McDonnell testify in his federal corruption trial makes one wonder exactly what his values are, especially as they relate to women.

His entire legal strategy is to “Throw Maureen Under the Bus” – namely his lawyers and those of his co-defendant wife Maureen are portraying Ms. McDonnell as a “basket case” who set up a lot of funny meetings with snake oil salesman Jonnie Ray Williams Sr., accepted expensive gifts from him with promptly telling her husband, and communicated with him 1,200 times in about a year and a half (one day it was 52 text messages.)

She is bad and deceptive. He is good and didn’t know much about her messy friendship with Williams. She is guilty. He is innocent (or so it goes).

Gov. Bob, helmet hair perfect as usual, took the jurors through a horrible litany of his long-decaying marriage to college sweetheart Maureen. While she was screaming and intimidating her staff, he was slogging through “the business of governing” for endless hours every day.

When she approached Ann Romney, wife of Republican presidential candidate on the campaign trail in 2012 and offered the woman who suffers from MS some “Anatabloc,” Williams’ miracle pills, Bob overhead it and was “embarrassed.”

There is something deeply disturbing, however, about McDonnell and his attitudes. He seems to have come from a bygone era when men worked long hours, held major responsibilities and answered to the most important thing in their lives – their overweening ambition.

The husband was ordained by God to do great things, be a Boy Scout, and write his name in history books. His wife was to stay barefoot and pregnant in the kitchen knitting socks or selling silly vials of creams.

McDonnell has since disowned this little passage he wrote at Regent University (Pat Robertson’s school) back in 1989 when he was a graduate student, but it seems strangely relevant. He tried to create some kind of conservative, faith-based government paradigm that would cut taxes, open charter schools and the like. He wrote:

“Further expenditures would be used to subsidize a dynamic new trend of working women and feminists that is ultimately detrimental to the family by entrenching status-quo of nonparental primary nurture of children.” The kicker is his view that feminism is one of the “real enemies of the traditional family.”

Well, a hell of lot of good that thinking has done since he has steadily, deliberately humiliated his wife in a bid to avoid jail time. A parade of defense witnesses, mostly McDonnell cronies, have humiliated Ms. McDonnell as a grabby, irrational, fashion-mad bimbo who just didn’t get it when Bob patiently told her that the stock she held in Star Scientific, Williams’ firm, had lost half their value and were a bad investment.

There are other giveaways that paint McDonnell as a self-important, entitled, superior little prig. Maureen had an apparently successful home-based business selling nutraceuticals like face creams. The Bob that may have sounded so pointlessly “womanish” but it is a big business. When he ran for statewide offices, he told Maureen to nix the biz.

Now wait a minute. Why should he tell his wife that she can’t run her own business she built up because his mission as a conservative political savior is just too important? Why does he get to decide?

One reason has roots in a kind of mid- 20th century philosophy that one used to see in black and white movies and television shows. There has been a deluge of testimony about the Virginia suburbs of DC roots of the McDonnells. Lots of military, conservative, family values, do-goodism, ticket punching (making colonel or the appropriate GS level position) having some silly affection for the Redskins or golf club bags with your school logo and so on. But the most obnoxious attitude is that the self-pride that one is doing something very important for his country and fellow citizens.

If you are male, you get to wear this cloak. If you are a woman, your first and foremost goal is to mind the kids and support your man and be a handmaiden to HIS career and ambitions. Watch the 1950s “Strategic Air Command” film” with Jimmy Stewart as a ballplayer pilot and his dutiful wife June Allyson. He makes the big decisions and flies the big bombers. She’s always waiting at the air base fence for him to come home so she can cook him fried eggs.

But McDonnell has a bigger problem than just this over-the-top sense of duty. By his own testimony, McDonnell is seriously addicted to political ambition. It is his oxycodone. His heroin. He gets a real kick by planning the next stage (vice president? president?) Maureen is left by herself and her screaming fits. Bob just tunes her out and spends as much time traveling and in his office as he can.

As he testified, McDonnell got a buzz from being a state legate and an even bigger buzz by running for attorney general and governor. One woman who seemed to be cheering him every step of the way was Janet Kelly, who ended up being Secretary of the Commonwealth when he became governor. She testified that when he wanted her for that spot, she told him flat out she could not work with Maureen. She didn’t.

Family values, anyone?

Is Pretentious Richmond Really Hooterville?

green acresBy Peter Galuszka

Is Richmond really Hooterville?

By golly gosh, that’s the impression that one might come away with after 14 days of testimony at the corruption trial of former Gov. Robert F. and Ms. Maureen McDonnell.

Pretentious Richmond likes to see itself as a genteel and sophisticated historic relic with a Southern snob appeal rivaling Charleston, S.C.; an architecture and culture that worship the English (although the best of the Brit lot didn’t always end up here); and basic unfriendliness. At the upper levels, people whose can’t trace their families back several generations are not really welcome unless they have lots of money, which bespeaks Richmond’s more honest background as a service and industrial town.

“RVA” as its promoters like to now brand it, is supposed to be a tourism and great restaurant destination with professional service (that’s a laugh). Residents are supposed to enjoy a high life that goes well beyond a burg of 1.25 million trapped in the distant shadows of Washington, D.C.

To be sure, some younger Richmonders are thankfully well beyond these handcuffs. So are a passel of “come heres” who have brought the town more sophistication from Germany, Japan or Croatia or even from  even from such Deeper South spots as Charlotte and Atlanta — Charleston being little more than a tourist trap and shipping center. Richmond does have nice museums, art galleries and a popular baseball team that they’re trying to ruin by moving it to a congested, politically orchestrated spot.

But you’ve got to wonder. In recent trial testimony, the story was told of Jonnie R. Williams, star witness for the prosecution, who tried to court (among many others) Dr. George Vetrovec, a researcher at Virginia Commonwealth University. Williams was trying to get VCU’s and the University of Virginia’s imprimatur on Anatabloc, Williams’ over-the-counter anti-inflammatory so questionable it has just been pulled off the shelves nationally. The former used car salesman also dotted doctors’ meetings with props from Johns Hopkins University as if they were supposed to impress the supposedly lower-tier Virginia folks. To their credit, many state officials didn’t bite.

Dr. Vetrovec thought he was going with Williams to the Executive Mansion to sample some of Ms. McDonnell’s cookies which are supposed to be delicious. Instead, it was a reception for dynamite director Steve Spielberg, in town to film “Lincoln” in October 2011.

Wowie! Zowie! THE Spielberg! “This is the most unusual event you can ever imagine,” the doctor said. As readers can see from the link, Vetrovec’s statements were reprinted in the London media, giving Richmond a somewhat laughable reputation.

Huh? Where the hell are we? “Green Acres?” Go to any city that Richmond aspires to be like Atlanta, D.C. or New York. No one would go nutty over Spielberg-spotting. Movie stars and directors are like so, so what? But Richmond was mad about “Lincoln” and was chock-a-block with all the local stand-ins they hired. You couldn’t walk downtown without tripping over the beard of an extra that he might have waxed with bacon grease to give it an 1865 look and aroma.

My own sister was an extra in “The Exorcist” in Georgetown back in the 70s but she never regarded it as the high point of her life. It was more an amusing anecdote to be shared over a glass of wine. When I worked in Moscow in friendlier times in the 1990s, I was driving downtown near a hotel. I was amazed since it was covered in bullet holes – even more so that I didn’t hear the shots although I lived nearby. Turned out it had been a prop for a Val Kilmer movie and they hadn’t cleaned it up yet. Muscovites did not gush. They walked silently by.

So are Richmonders really that impressionable? Is it a deep sense of being second rate? Is it an over-sized turnip truck? Why were the McDonnells so impressed with Williams’ Ferrari that they had 25 pictures of them with it? Had they never seen a Ferrari before?

There’s the $5,000 bottle of Louis XIII cognac in New York’s Four Seasons hotel. Later, Williams spent something like $36,000 for a four-day getaway for six people including the McDonnells at a posh Cape Cod resort. The six tippled 16 glasses of Louis XIII for something like $125 a snifter. Their dinner menus included lobster, duck, steak and fish – all on Williams’ tab.

And on it goes – the Rolex, Louis Vuitton, Oscar de la Renta, the golf clubs and so on.

The obvious corruption is worrisome and hopefully the  federal (not state)  court will address it.The extra blow is that Richmond doesn’t just look bad, it looks ridiculous. It seems like a Third World capital, perhaps Jakarta, where traders and investors used to bring special goodies for Mrs. Suharto (a.k.a. “Mrs. Ten Percent.”)

Will Richmond be regarded as too simple to handle business, culture, science and education in  a much more interconnected and increasingly sophisticated world? Will foreign business scouts show up at RIC with suitcases full of cash, or maybe fake gold trinkets? Could it be that the McDonnells have it right — Richmond is really Hicksville after all?

The Chuck and Joe Traveling Municipal Salvation Show

The Joe and Chuck Traveling Municipal Salvation Show

Joe Minicozzi (left) and Chuck Marohn

Chuck Marohn and Joe Minicozzi, principals with Strong Towns and Urban3 respectively, travel the country telling cities, towns and counties how to build better communities while remaining fiscally solvent. I have borrowed heavily from both Chuck and Joe in my writing about land use, transportation and community building, and it’s reassuring to see that as their own thinking evolves, it has moved in concert with mine.

Most recently, Chuck has blogged about the paucity of useful information cities have to guide them in make zoning and capital spending decisions. He makes many of the same points I did in my recent post, “How Planners Can Rescue Virginia from the Fiscal Abyss.Writes Chuck:

Despite running corporations (most cities are “incorporated” municipalities) that have billions of dollars in assets and liabilities and annual cash flows in the tens, and sometimes hundreds, of millions of dollars, few ever ponder some shockingly simple questions.

  • What are our total assets, the value of the tax base that constitutes our community’s wealth?
  • What are the long term obligations for infrastructure maintenance associated with sustaining those assets?
  • In terms of geography, what parts of our community have a positive Net Present Value (cash from long term assets minus the cost of long term liabilities) and which have a negative Net Present Value?

The answers to these questions constitute a community’s balance sheet, the most basic of accounting requirements for any family or business but one which cities largely ignore. …

Since we don’t know the answer to these basic questions, we can’t even begin to ponder some more sophisticated, but obvious, things that all cities face.

  • How does that tax base change in response to certain policy decisions?
  • What types of land use patterns create the most wealth for the community?
  • What types of land use patterns experience the greatest degree of volatility?
  • How does a park impact Net Present Value? How far from the park does that effect extend?
  • How does a stroad impact Net Present Value? How far from the stroad does that effect extend?
  • Where can we deploy limited resources to have the greatest overall impact?

Keep up the good work, Chuck and Joe!

– JAB

State Workers: GiftGate’s Unsung Heroes

mcD.pixBy Peter Galuszka

The McDonnell corruption trial, now going into its third week, is an enormously sad and tawdry affair bringing shame on the defendants and the prosecution’s key witness, businessman Jonnie R. Williams Sr.

Yet there are heroes — state employees. A number of them have testified over the past week that they sensed that something stunk with the way Williams, who has no formal science training, relentlessly pushed his questionable product and maneuvered to get the state’s prestigious universities to put their imprimatur on it so it could move from being a low margin neutraceutical to a real and profitable pharmaceutical.

“Perhaps the only gratifying aspect of the trial last week was the extraordinary professionalism of the Virginia bureaucracy,” Richmond political analyst Bob Holsworth told the Richmond Times-Dispatch.

He’s spot on. One reads so many attacks on government workers among more conservative writers who see public workers as slow-minded except when it comes to tying business up with regulations — the theory goes. Private workers build wealth and create products. Public workers live off the taxpayer’s dime and should be fired in droves, one theory goes.

Not true in the McDonnells’ case. Tae Health and Human Resources Secretary William Hazel. Former Gov. Bob McDonnell pushed him, including with late night-emails, to set up meetings to promote Williams and his Anatabloc product.

Hazel responded with not only brave professionalism but common sense. “I wouldn’t put the stuff in my mouth,” he testified. When Williams gave him samples, he didn’t put it down in his disclosure forms because “I didn’t think it had any value.”

Hazel is a serious doctor of medicine, honed by science and reason. Someone like that just isn’t going to be swayed by a business hustler with a private jet, Ferrari, various vacation homes and a gigantic credit limits on his cards.

Other heroes and heroines appear to be some of McDonnell’s staff such as Sarah Scarbrough, former director of the Executive Mansion, who worried about Maureen McDonnell’s “mental capacity” and campaign manager Phil Cox who was upset when Ms. McDonnell pushed Williams’ little pills on Ann Romney, the wife of the GOP’s 2012 presidential candidate.

Somewhat less impressive are other witnesses from Star Scientific, Williams’ former company. Former Chairman Paul Perito claimed that he had no idea just what Williams had given the McDonnells and how deeply he had gotten into  the muck with them.

Last summer, I was spending a lot of time reporting on Star and admit that I could never figure it out. Williams’ seemed like money-losing huckster — someone so over-the-top that he could be easily seen through. Yet the other officers and directors at Star, like Harvard-trained Perito, seemed solid.

Perito nixed McDonnell’s campaign to become a paid board member of Star (she’s hardly qualified) and he seemed stunned when Williams’ told him in 2013 that he’d been interviewed by the FBI and state police. It raises questions about Perito that he didn’t know of all of this much sooner.

Still, many Virginia workers caught up in this farcical mess deserve credit for sticking to their guns and professionalism. Hats off to them.

Williams: How to Reach the High and Mighty

Photo by the Richmond Times-Dispatch

Photo by the Richmond Times-Dispatch

By Peter Galuszka

The McDonnell corruption trial has its high and low moments. One theme stands out: the trial is a guidebook of how to gain broach and compromise the power elite of Virginia politicians, in this case the Republicans.

Here are a few takeaways:

  1. Want to break in? Having a private jet is a must, testified former Star Scientific CEO Jonnie R. Williams Sr., also the government’s star witness with immunity from prosecution. By offering the jet to politicians and aides, you a captive audience for the length of the flight. Williams said he got up to six hours of almost undivided attention from Robert McDonnell when he and the former governor were flying in his plane across country from a campaign event with the GOP’s Meg Whitman, then running for governor of California in the Fall of 2010. That’s when they started talking in earnest about promoting Jonnie’s products. Richmond’s odd location is a problem with travel. Having your own plane helps the pooh-bahs bypass “ RIC, IAD, and DCA and fly directly to GOP.”

  2. Republicans like living large. Big names impress. Just after McDonnell won the governorship in 2009, he and his wife meet at the Four Season Hotel in Manhattan. Williams was there with his buddy, high fashion male model Brad Kroenig. During that meeting Ms. McDonnell thought it would be a great idea if she could get an Oscar de la Renta dress for the upcoming inaugural ball. Williams bought drinks, but not any drink. He blew $5,000 on a bottle a Louis XIII cognac. Asked by a defense lawyer why he did so, Williams replied, “I actually don’t care for it all that much but some other seem to.”
  3. Looking for funding under strange circumstances? Somehow Virginia’s Tobacco Indemnification and Community Revitalization Commission always seems to pop up. On his cross-country trip with Williams, McDonnell suggested it as a source of research funding for Williams’ Anatabloc dietary supplement., Williams said. Apparently the plan was to get the University of Virginia to ask for research money, keeping Star and the governor a step or two removed. McDonnell encouraged Williams to contact Jerry Kilgore, a former attorney general and partner at McGuire Woods. Jerry, who later became Williams’ lawyer, has a brother, Terry, who is head of the tobacco commission. In an unrelated matter, the tobacco commission was involved with the sudden and strange resignation this summer of state Sen. Phil Puckett just as a key vote on Medicaid expansion was to happen. The plan was for Puckett to take a top-paying, sinecure-type job at the tobacco commission but it didn’t work out once it was publicized.

As the trial continues, there may be other tips for success. I will pass them along as soon as I can.

How Planners Can Rescue Virginia from the Fiscal Abyss

This is a copy of a speech that I presented to the Virginia Chapter of the American Planners Association Monday, with extemporaneous amendments and digressions deleted. — JAB

Thank you very much, it’s a pleasure to be here. Urban planning is a fascinating discipline. As my old friend Ed Risse likes to say, urban planning isn’t rocket science – it’s much more complex. Planners synthesize a wide variety of variables that interact in unpredictable, even chaotic, ways. In my estimation, you don’t get nearly enough respect and appreciation for what you do

OK, enough with the flattery. Let’s get down to business.

toastThis is you. You’re toast. Unless you change the way you do things, you and the local governments across Virginia you represent are totally cooked. … Here’s what I’m going to do today. I’m going to tell you why you’re toast. And then I’m going to tell you how to dig your government out of the fiscal abyss, earning you the love and admiration of your fellow citizens.

Why You’re Toast

old_people2Here’s the first reason you’re in trouble — old people. Or, more precisely, retired government old people. Virginia can’t seem to catch up to its pension obligations. The state says the Virginia Retirement System is on schedule to be fully funded by 2018-2020. But the state’s defines 80% funded as “fully funded,” which leaves a lot of wiggle room. The VRS also assumes that it can generate 7%-per-year annual returns on its $66 billion portfolio. For each 1% it falls short of that assumption, state and local government must make up the difference with $660 million. As long as the Federal Reserve Board pursues a near-zero interest rate policy, depressing investment returns everywhere, that will be exceedingly difficult. A lot of very smart people think 5% or 6% returns are more realistic. In all probability, pension obligations will continue to be a long-term burden on localities.

potholesSecond, the infrastructure Ponzi scheme — that’s Chuck Marohn’s coinage, not mine — is catching up with us. For decades, state and local government built roads and infrastructure, typically with federal assistance, proffers or impact fees with no thought to full life-cycle costs. State and local governments have assumed responsibility for maintaining and replacing this infrastructure. Well, the life cycle done cycled, and the bill is coming due. We’re finding that we built more infrastructure than we can afford to maintain at current tax rates, leaving very little for new construction.

accotinkThird, after years of delay, serious storm water regulations are kicking in. Local governments bear responsibility for fixing broken rivers and streams like Accotink Creek, showed here. (Yeah, that’s a creek. It’s having a bad day.) Best guess: These regs will cost Virginia another $15 billion. But no one really knows. And it may just be the tip of the iceberg. I recently talked to Ellen Dunham-Jones, author of “Retrofitting Suburbia,” and she noted that a lot of the storm water infrastructure that developers built in the ‘50s and ‘60s is crumbling. The developers are long gone. Someone’s going to have to fix that, too. Guess who?

property_taxMeanwhile, the largest source of discretionary local tax dollars – real estate property tax revenues – is stagnating. According to the Demand Institute, residential real estate prices in Virginia will increase only 7% through 2018 – the third worst performance of any state in the nation. Don’t count on magically rising property tax revenues to bail you out.

In fact, the tax situation is worse than it looks. Demand for commercial real estate is dismal, too. Consider what’s happening to the retail sector. We’re going from this…

shopping_centerTo this..

amazon_warehouse

Every Amazon.com distribution center represents dozens if not hundreds of chain stores closing. It means more vacant store fronts, more deserted malls, less new retail development. Continue reading

Boomer….Wha?

a-bomb peace signBy Peter Galuszka

Remember the federal deficit that lurked behind the corner? Where did it go?

Al Kamen of The Washington Post asks that question in a column today. He writes:

“Not long ago, the federal deficit was projected to destroy the country, our country’s future and just about everything else. The politicians and the news media regularly fretted about what to do. Budget battles shut down the entire government for a couple of weeks.”

He continues: “So, what happened? The simple answer, of course, is that the deficit is way down and, for now, is no longer a big problem.”

The Congressional Budget Office estimated last week that the deficit for f/y 2014 is $492 billion or 2.8 percent of GDP. That puts us back in the early years of the George W. Bush administration.

Hmm. Kinda of makes you wonder where all this out-of-control spending is coming from that the Tea Party types talk about so much.

It is off the media radar screen. The Post has a graphic showing that the words or mention of the “national debt,” federal debt” or “federal deficit,” reached a high around the first half of 2010. The conservative Washington Times the most at 18; The Post with 13; and the New York Times with 10. Now it’s around three.

This isn’t to say that federal spending doesn’t merit watching. But where is Jim Bacon when you need him?

RAM, Coal and Massive Hypocrisy

The Pikesville RAM clinic in 2011. Photo by Scott Elmquist

The Pikesville RAM clinic in 2011. Photo by Scott Elmquist

By Peter Galuszka

Sure it’s a photo op but more power to him.

Gov. Terry McAuliffe is freshly arrived from the cocktail and canape circuit in Europe on a trade mission and is quickly heading out to the rugged and impoverished coal country of Wise County.

There, he, Attorney General Mark Herring and Health and Human Resources Secretary William A. Hazel will participate in a free clinic to help the mountain poor get free health care. The political opportunity is simple: Many of the 1,000 or more who will be attending the Remote Area Medical clinic are exactly the kind of people getting screwed over by the General Assembly’s failure to expand Medicaid to 400,000 low income Virginians.

RAM makes its Wise run every summer and people line up often in the wee morning hours to get a free medical and dental checkup. For many, it’s the only health care they get all year unless it’s an emergency. Another problem: Distances are great in the remote mountains and hospitals can be an hour away.

Mind you, this is Coal Country, the supposedly rich area upon which Barack Obama is waging war and harming local people by not going along with coal executives’ demands on environmental disasters such as mountaintop removal, keeping deep mine safety standards light and avoiding carbon dioxide rules.

The big question, of course,  is why if the land is so rich in fossil fuel, are the people so poor and in need of free medical care? It’s been this way for 150 years. And now, coal’s demise got underway in Southwest Virginia in 1991 when employment peaked at about 11,000. It is now at 4,000 or less. It’s getting worse, not better.

In June 2011, by coincidence, I happened along a RAM free clinic in Pikesville, Ky., not that far from Wise when I was researching my book, “Thunder on the Mountain: Death at Massey and the Dirty Secrets Behind Big Coal.” My photographer Scott Elmquist and I spotted the clinic at a high school. There must have been hundreds of people there —  some of whom told me they had been waiting since 1:30 a.m. It was about 8:30 a.m.

Attending them were 120 medical and dental personnel from the U.S. Public Health Service. They were dressed in U.S. Navy black, grey and blue colored fatigues. The University of Louisville had sent in about 80 dental chairs.

Poverty in Pike County had been running about 27 percent, despite the much-touted riches of coal. Pike is Kentucky’s biggest coal producer.

One man I spoke with said he had a job as a security guard, but he doesn’t qualify for regular Medicaid and can’t afford a commercial plan. In other words, had I interviewed him more recently and had he been a Virginian, he would have been lost through the cracks of Medicaid expansion. Alas, he’s in luck. In 2013, Kentucky opted for a “marketplace” expansion system where federal funds would be used to help lower income buy health plans through private carriers.

Lucky the man isn’t from here. The marketplace plan is exactly the kind that McAuliffe has proposed and exactly the one that stubborn Republicans such as Bill Howell in the General Assembly are throttling. The feds would pick up the bill for expanding Medicaid to 400,000 needy Virginians, at least initially.

Yet another irony. Expanded medical benefits are available just across an invisible border in two states whose coalfield residents somehow never got the great benefits of King Coal.