Category Archives: Taxes

Are We Going Back to Selma?

Posted on May 20, 2012 by Peter Galuszka| 12 Comments

By Peter Galuszka

Imagine it is Alabama in early 1965. The Southern state, like Virginia, has for decades deployed a number of ruses such as poll taxes and literacy tests to prevent U.S. citizens and state residents from voting. These people otherwise would have been qualified voters but also happened to be African-Americans whom the ruling white elite wants to keep from exercising their constitutional right. In Selma in 1965, three civil rights workers, Jimmie Lee Jackson, James Reeb and Viola Luizzo who are advocating for voter rights, are shot and killed in their car by the Ku Klux Klan.

Travel a bit farther into south Texas and find that the Lone Star State has its share of disenfranchisement devices in use to stop Mexican-Americans from voting, even though some have been legal residents from the day Texas became a state and part of the United States. In some counties, Mexican-Americans are by far the large group, which is exactly why the white elite want them not voting in strength.

And imagine, a well-meaning, white, privileged and otherwise intelligent man from these parts supporting restrictions on voting, telling people they should “get over it.”

Welcome to the future. The events in 1965 resulted in the Voters Rights Act, a landmark piece of legislation. Yet when Gov. Robert F. McDonnell signing his own weasely version of the voter identification law supported by arch conservative Republicans in the General Assembly, the Old Dominion, most of which still under federal election supervision for its tarnished past, is putting new roadblocks in front of voters.

They used to have to show a photo ID and if they didn’t have one, they’d sign an affidavit saying they were who they claimed to be. Now, their vote will be “provisional” and they will have to show up official at a later date and show the ID. Only then will their vote be counted. To make things easier, McDonnell is ordering millions of new “voter ID” cards to be issued statewide. Odd that he doesn’t mention how much this will cost since the flavor of the moment is strictly containing budget expenses.

A few points on this rather strange set of events:

  • There have been absolutely no known major scandals involving voter fraud in Virginia. So, if there’s nothing broken, why go through all the trouble to “fix” it?
  • It is clear that restricting voting is a major ambition of the Republican Party which fears that President Barack Obama may get the boost in November’s election as he did in 2008 from the poor, the minorities and the young.
  • Regarding these groups, 25 percent of African-American voters do not have valid government-issued IDs compared with 8 percent of whites, according to a study by the Brennan Center for Justice at New York University. Some 15 percent of people earning less than $35,000 a year likewise have no such ID. According to the Project Vote, about 15,000 people voted without IDs in Virginia in 2008.

Thus, Virginia’s conservative leaders and their cheerleaders are targeting what they consider to be a threatening group of voters as part of a campaign to correct a phony “wrong.” This is just another part of a sweeping socially-conservative agenda that has women, gays, dark-skinned immigrants and African-Americans in their crosshairs.

And no, I’m not going to “get over it.” I refuse to be patronizing when it comes to basic civil rights.

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Posted in Abortion, Budget, Courts and law, Crime and corrections, Demographics, Electoral process, Entitlements, Finance, Gay rights, Governance reform, Race and race relations, Social services, Taxes, Unemployment

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Clarity Amid Blather on Dulles Rail

Posted on May 6, 2012 by Peter Galuszka| 30 Comments

By Peter Galuszka

It has always been supremely puzzling to me why this blog has taken such a strident and shrill anti-union attitude. The shining example is the smear campaign against project labor agreements (PLAs) and Phase Two of the Silver Line of Metro to Dulles airport. The attacks extend to attempts to liquidate personally Dennis L. Martire, a union leader and member of the Metropolitan Washington Airports Authority, whose crimes against the people I cannot understand.

This McCarthy-esque anti-union campaign has become dogma among the harder right Republicans in Virginia. It’s as if we’re standing up and saying there are 50 Communists in the State Department, but no one bothers to ask that the list of names be read because there aren’t any. Ditto the supposed vulnerability of the state’s anti-union Right to Work law, which has been around for decades and is in no serious jeopardy whatsoever.

So, after paddling through all the Bacons Rebellion blather regarding the MWAA and the PLA, I find it refreshing to have a moment of clarity. It comes in today’s Post in a column written by Steve Pearlstein, whose hard-nosed sensibility has caught my eyes before.

Pearstein zeroes in on the all-Republican Loudoun County Board of Supervisors who are throwing big wrenches into long-standing plans to bring public rail transit to Dulles and bring the official airport of the nation’s capital into the 21st century. Gee, I even lived in the DC area when Dulles was opened in the early 1960s and it still doesn’t have the transit links that most of the major airports of the world have.

Here are some points from Pearlstein’s piece:

  • Loudoun’s new board is suddenly sticking its nose into something that county officials generally don’t. That is a $5 billion project managed by a regional agency representing three states and dozens of local jurisdictions.
  • Previous Loudoun boards have long ago committed to Dulles Rail. Only 4.8 percent of the Silver extension and half of the cost of the Loudoun stations and track work are being financed by Loudoun taxpayers.
  • The point of the PLA is not to kiss Big Labor’s butt, but to get enough skilled workers to do the job. The first PLA on Phase One involved a no-strike pledge and flexibility on work rules, Pearlstein says.
  • Despite this background in which a functional process was set up and put to work, Associated Builders and Contractors mostly non-union firms, saw some daylight to quash unions as hard right Republicans and Tea Potters can’t strength.
  • A new deal was hatched. No PLA of sorts, but bidders would get extra points in the bidding competition if they had one. Gov. Robert McDonnell and his Transportation Secretary Sean Connaughton seemed OK with this but later went back on it. There’s even a new state law outlawing PLAs in the Dulles project.
  • Someone hit the “send” button on a new propaganda campaigning about the project’s supposedly exorbitant costs with organized labor somehow responsible. PLAs were alleged to come with a 10 to 15 percent cost markup.  In Phase One is was actually about 3 percent for labor and non-labor units, in effect, a wash. Little problems with the facts there.
  • Despite opponents claims that no one will use the last link of the Silver Line to Dulles, new studies show that residents within a few miles of the stations will likely start using them for their commutes to downtown DC. The added convenience of rail access should be a bump, although limited, to some housing prices.

The vicious anti-union campaign has always left me a bit dumbfounded. It would be one thing is there had been a major and crippling strike in the DC area or anywhere in Virginia, for that matter. The only big strikes that I can remember involved Verizon workers about 12 years ago, Steelworkers at the Newport News Shipyard decades ago and the United Mine Workers of America strike in the mid-1980s. There really hasn’t been anything confrontational in years.

So, why the big attack on labor and Martire and the like? The reason seems to be that the hard right (which may be damning the Romney campaign to the dustbins) has decided that collective bargaining is one the devils it must destroy. We are reeling from barrage after barrage of the evil of labor unions even though Americans have a constitutional right to organize. Unions, which fought for and won better living standards for workers years ago, have been in decline for decades.

Why are they the target? It is somewhat like undocumented aliens. They are an easy target.

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Posted in 2012, Budget, Economic development, Energy, Environment, Finance, Immigration, Infrastructure, Labor & workforce, Land use & development, Planning, Politics, Taxes, The Economy

Something Stinks About This Tax Proposal

Posted on April 30, 2012 by Peter Galuszka| 12 Comments

By Peter Galuszka

Pick a number. Any number.

Could 49,000 jobs be created? How about 44.000 jobs? It could be 77,000 jobs, or maybe as few as 900 jobs. These are the all-over-the-board possibilities suggested by the grandly-named Thomas Jefferson Institute for Public Policy in Springfield, which touts itself as a non-partisan think tank, when, in fact, it is a conservative business lobby.

They have a new study, praised by fellow blogger Jim Bacon, that supposedly would restructure taxes in Virginia in ways to warm the hearts of Gov. Robert F. McDonnell and Lt. Gob. Bill “The Jobs Guy” Bolling. The study suggests somehow changing the states sales tax, while expanding it or not expanding it to ”exempt” sectors. The nut of the study is the elimination of three state business taxes that have been around for years – the Business Professional Occupation Licensing tax, the Machine and Tool tax and the Merchants Capital Tax.

Getting rid of these nettlesome taxes has long been a mission of the state’s business lobby. “There is no net tax increase suggested in this study,” writes TJ Institute president Michael Thompson. The study, however,  seems to suggest that eliminating the three business taxes would cost localities $834.1 million that somehow would come from somewhere else.

I gather the make-up money would come by sticking the poor and middle class with extra sales taxes in areas now “exempt from sales taxes.” The states sales tax is now 5 percent but for some exempt foodstuffs, it is only 2.5 percent. The Thompson study doesn’t say exactly which “exempt” sales taxes would be eliminating (although it presumably would be enough to make up $834 million). It does suggest lowering the sales tax overall, but its target numbers vary and there’s little discussion about which and what exactly.

The more bizarre points of the report are the “nine” scenarios that offer a gobble-dee-gook of combinations. Most of the report makes little sense, but it makes bold jobs growth predictions. “Jobs created” range from 900 to 77,000. There is no clear cut analysis of how these out-of-the-dark jobs numbers come from.

Thompson claims he worked with two outside groups to come at his analysis. One is from Chmura Economics and Analytics, a Richmond-based forecasting firm, hired by the TJ Institute  to study various sales tax exemptions. Its head, Chris Chmura is a reputable, former Fed economist, but if her analysis is solid, there is no way of telling in Thompson’s report.

The voodoo economics seems to come from the so-called Beacon Hill Institute of Suffolk University in the Boston area. The fiscally conservative and politically-charged think tank apparently did the “pick a number” jobs creation numbers crunching. The institute itself is suspect. It gets funding from the arch-conservative Coors beer empire that is famous for finding ways to diminish the rights of gay people. Its findings are under constant attack by Massachusetts labor unions and the Massachusetts Taxpayers Foundation, a watchdog group.

The Thomas Jefferson Institute, in my book, is likewise suspect. It is populated by right-wing lobbyists and not respected economists. In the past, it has touted the supposed benefits of offshore oil drilling in Virginia and cited the projections of an Old Dominion University professor who later told The Wall Street Journal that his estimates were informal and not to be taken seriously.

It is too bad that Bacon’s Rebellion has been hooked by this TJ report without thinking it through.

 

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Posted in 2012, Budget, Children and families, Consumer protection, Economic development, Economy, Energy, Finance, Gay rights, Governance reform, Money in politics, Politics, Poverty & income gap, Race and race relations, Regulation, Taxes, The Economy

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A Win-Win Way to Restructure Virginia’s Tax Code

Posted on April 27, 2012 by James A. Bacon| 51 Comments

Restructuring Virginia’s tax code by taxing services and using the proceeds to roll back business and income taxes would stimulate $340 million in additional investment, create 77,000 jobs and increase real disposable income by $2.78 billion under one of nine scenarios studied by the Thomas Jefferson Institute for Public Policy in a new study, “Tax Restructuring in Virginia.”

The Thomas Jefferson Institute explored the scenarios in collaboration with Chmura Economics & Analytics, a Richmond-based consulting firm, and the Boston-based Beacon Hill Institute to see if reconfiguring the tax code along revenue-neutral lines could yield superior economic performance. “What we found is truly fascinating,” said President Michael Thompson. “So much good could be accomplished by restructuring the current taxes without the overall tax burden being any different than it is today.”

One of the nine scenarios assumed that the state sales tax would be extended to all services, which are currently exempt, except health care. The revenue raised would be applied to eliminating the Business Professional and Occupational License (BPOL), the Machinery & Tool (M&T) tax and the Merchant Capital (MC) tax; to cut the state income tax on the first $5,000 in income; and to trim the top income tax rate from 5.75% to 5.3%.

Such a restructuring would stimulate economic growth by shifting the tax burden from consumption to business investment and income, explained Paul Bachman, director of research at Beacon Hill. The benefits would not be immediate, he said, but would phase in over roughly five or six years.

From an economic perspective, a lower, broader tax base is preferable, said Thompson: Lower taxes produce fewer distortions in the economy, encourage investment and incentivize people to work harder. The Virginia Municipal League and Virginia Association of Counties have told him that as long as the tax restructuring was revenue-neutral for local government, they had no problem with the concept.

BPOL, M&T and MC generate revenues for local governments, while the sales tax goes to state government. Thompson said that an arrangement could be worked out, similar to the roll-back of the telecommunications tax, for the state to offset local governments’ lost revenue.

A potential objection to the restructuring could come from those who see it as hurting lower-income Virginians. It could be argued that businesses and higher-income individuals would see the greatest benefit, while lower-income households would share in the pain of paying the tax on services, like getting a haircut. Thompson contended that his Scenario #7 would benefit less affluent Virginians by eliminating the tax on the first $5,000 in income. Also, he said, the 77,000 jobs created would go predominantly to lower-income workers.

Thompson said he has presented his findings to Governor Bob McDonnell’s policy team and has gotten buy-in from business groups like the Virginia Chamber of Commerce. Said he:

It is time for Virginia to look at its out-dated and antiquated tax code and bring it into the 21st Century. The BPOL tax, for instance, was started almost 200 years ago in order to pay Virginia’s share of the War of 1812. We know the facts in this new study and in our tax model will dramatically improve Virginia’s economy while giving every tax payer a substantial reduction in their state income taxes. We encourage our leaders to pursue a sensible tax restructuring that can help everyone in our state.

Bacon’s bottom line: This proposal has a lot of potential. The plan will generate push-back, though, from people arguing that it would increase the tax burden on the poor. Ideally, changes to the tax code would be not only revenue-neutral but would not add any hardship to the poor. If Thompson can address that concern, the plan looks like a winner.

– JAB

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Posted in 2012, Taxes

ALEC, the Tea Party and the Feral GOP

Posted on April 19, 2012 by Peter Galuszka| 5 Comments

House Speaker William J. Howell

By Peter Galuszka

Virginia’s conservatives have gone through a spasm of controversy as they struggle to find their message. They desperately need to balance their ideas of fiscal discipline and limited government with a wide spectrum of unrelated hard-right social issues.

The clearest evidence yet of the quandary for their soul involves the American Legislative Exchange Council (ALEC), which has just backed away from pushing “Stand Your Ground” laws that were involved in the shooting of a young African-American from Florida, Trayvon Martin.

ALEC had been a cozy, four-decades-old group of deep-pocketed corporations and lobbyists that ghostwrote template-style laws for state legislatures around the country to boost the conservative agenda of cutting taxes and government spending and cater to the business community’s desire for few regulations. For a long while, it seemed like a gigantic Chamber of Commerce funded by big corporate names such as Coca-Cola, Wal-Mart and Johnson & Johnson to push business-friendly laws.

But as the Tea Party movement gained steam in 2010, its disparate elements pushed right-wing social issues that ended up alienating many and polarized legislatures, including Virginia’s General Assembly. That spilled over into ALEC, which ended up pushing voter ID laws designed to take voting power away from minorities when there was no real issue over identity fraud and suck up to the gun lobby by pushing the idea that if one feels under attack, he or she may whip out a firearm and blow away an assailant without much legal consequence.

Incredibly, Virginia taxpayers have shelled out $231,000 over the past decade so legislators, mostly Republicans, can go to ALEC confabs and learn what the latest is in conservative designer legislation. A big player is House Speaker William J. Howell (R-Stafford), who, according to The Washington Post, made 60 percent of his publicly funded trips to ALEC meetings.

The unexpected fury over the  Trayvon Martin shooting involving a Stand Your Ground law blew everyone’s cover. It had the entire cossetted ALEC world tossed on its head. Firms such as Coca-Cola, Mars, Wendy’s and Kraft, all of which are consumer products firms whose billions debate on a positive public image bailed on ALEC. The constant deluge of the Trayvon shooting was very bad for their business. Now ALEC says it is dumping social issues and sticking to economic ones.

Howell didn’t seem to know what to do. He attacked left-leaning critics such as “ProgressVa” and had the bad taste and judgment to personally insult Anna Scholl, the head of ProgressVA at a press conference, demeaning her intelligence by saying he needed to speak to her only in monosyllables. Howell, usually more stately than that, soon issued a public apology to Scholl.

What’s revealing about Howell’s tantrum, however, is how it shows that mainstream conservatives really don’t know what to do with the social radicals in their movement. For years, they’ve enjoyed the upscale, closed-door demeanor of ALEC meetings until the Tea Party types shook everything up. It was fine, everyday work bashing unions and trying to cut taxes for companies and the rich. Yet they became spooked by what ended up being a weak, ephemeral and loosely organized group that they went freak-out if not totally feral.

Big business interests figured it out faster and with the exceptions of firms such as Wal-Mart, they bailed on ALEC. This shows that a lot of the GOP stalwarts in Virginia and nationally have feet of clay. They are not sure of their agenda, as their unimpressive primary run so far has shown. Locally, they have let social right-wingers hijack this year’s General Assembly with issues that had been decided decades ago, such as women’s right to abortions and gay rights. Real work important to the Commonwealth didn’t get done. Because of the distractions, it took four tries to get a (bad) $85 billion budget passed.

It is time to put the Tea Party in its place and get past it. The Republicans are paying a huge price and will probably lose the presidential election if they continue. Meanwhile, the Democrats, who have stood on the sidelines snickering at the GOP melee, need to get engaged and shut down this social nonsense once and for all.

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“Young Gun” Cantor Gets Tiresome

Posted on April 17, 2012 by Peter Galuszka| 3 Comments

By Peter Galuszka

What a difference nine months makes. Last summer, Boy Wonder Eric Cantor, the U.S. house majority leader from Henrico County, was riding high politically.

If he wasn’t snubbing President Barack Obama in meetings over the need to raise the debt ceiling, he was racing to get ahead of the Tea Party parade despite his thoroughly Main Street credentials. With another even more luminous Boy Wonder, U.S. Rep. Paul Ryan, was giving himself into a makeover as a youthful leading light of the New Conservatism.

To underscore that dynamism, cantering Cantor co-wrote, with Ryan and another young Republican congressman, the book “Young Guns,” an ego-saturated tome that draws on 1960s cowboy shows to set him up as a brave gunslinger defending budget discipline righteousness in a saloonful of drunken hacks and slutty Miss Kittys.

But today Boy Wonder has trouble on several fronts. According to Jeff Shapiro, the Times Dispatch columnist, Cantor is pissing off his fellow Republicans with his overweening self-centered nature and shameless attempts to replace Speaker of the House John Boehner.

Cantor dipped into his own Super PAC (curiously named the Every Republican is Crucial Political Action Committee or ERIC-PAC) to buck up an unknown Illinois congressman against a GOP elder in a primary race. Trying, once again, to posture as a budget hawk, he’s gone against the popular U.S. Export-Import Bank which helps fund exports of small and large corporations alike. And, his local allure has backfired so much that his guy lost in a Henrico County commonwealth’s attorney race.

If this weren’t enough, the editorial page of The New York Times has taken apart one of Young Eric’s pet legislative efforts – one that lets “small business” owners deduct up to 20 percent of their business income.

That sounds all well and good since small business is every pols’ flavor of the month. But the Times points out a few little discrepancies – namely, what is a “small business” exactly?

According to Cantor, a small business is one with less than 500 employees. That can include “multi-million-dollar partnerships and corporations.” Businesses this size, the Times says,  aren’t really the big job creators politicians claim they are.

If you really want to get to jobs creation, you have to go down to businesses that have 50 employees or less. Endeavors this size have created one third of all new jobs in the past 20 years. So what does Cantor’s bill mean? According to the Times, it is a thinly-veiled attempt to give the rich, whom Cantor loves to represent, yet another tax break.

Many politicians might get away with such slick actions. The trouble with Cantor is that his persona comes off as that of Eddie Haskell, the cloying jerk of 1950s TV fame, according to New York magazine. Given the way his district runs through red zones, however, it’s likely Eddie (or Eric) will be with us a while longer.

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Posted in 2012, Budget, Economic development, Economy, Electoral process, Money in politics, Politics, Taxes

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Corey Stewart’s Racist Baggage

Posted on April 13, 2012 by Peter Galuszka| 8 Comments

By Peter Galuszka

Corey A. Stewart, the scourge of “illegal” immigrants and standard-holder of good old fashioned American values, is now running for lieutenant governor on the Republican ticket in 2013.

News reports of his recent announcement were predictably bland – comments in the right-wing blogosphere even more so – despite the fact that Stewart is one of the most divisive, if not downright racist, politicians in recent Virginia history.

As a member of the Board of Supervisors of Prince William County since 2003, Stewart is famous for his movement to require county police to profile anyone they suspected of being illegal immigrants if they were stopped. This law was obviously aimed at brown-skinned Latinos. Similar legal requirements were later adopted statewide in Arizona and Alabama, bringing the U.S. global derision.

One immediate effect of Stewart’s 2007 initiative was that Hispanic immigrants started fleeing the county in droves regardless of whether their papers were entirely in order or not. Stewart claims that his move caused violent crime to drop 37 percent in the largely white and wealthy suburb of Washington, D.C. chock-a-block with federal jobs and cul-de-sac homes. More informed individuals, such as Steven Camarota, research director of Center for Immigration Studies, says the link between violent crime and illegal immigration is a lot more tenuous.

Among the negative fallout from Stewart’s xenophobic grandstanding was that it pit white-skinned against dark-skinned and haves against have nots. The lead-in to the law and the aftermath brought on some very ugly scenes that drew to the soul and conscience of what had been a rather quiet, growing county.

For an idea of just how rancid Stewart’s ideas were, check out the short, award-winning film 9500Liberty by Annabel Park and Eric Byler. The 2010 documentary runs less than five minutes or so, but shows Americana at its worst. In one famous scene, an elderly white man screams at Park and Byler to “speak English” and get legal. In response, Park, who was born in South Korea, is a naturalized American citizen and studied at Boston University and Oxford, produces her U.S. passport and flashes it in his face.

Even the chief of the county police has big trouble with Stewart’s law, which Stewart later tried to expand to the rest of Virginia in his “Rule of Law” campaign. My memory of Stewart is in October 2010 at the “Virginia TeaParty Patriots Convention” in Richmond manning a little booth trying to dish out anti-immigrant ideas. He seemed to be ignored amidst the hubbub of deficit hawks, Patrick Henry re-enactors in Colonial garb and gun fanatics packing Glocks and Colt 45s in Velcro holsters.

In any event, bashing immigrants has gone out of style at least for now. The reason is the economy. Fewer undocumented foreigners are coming here because jobs are nil. Ironically, Hispanic construction workers had been flocking to Prince William about 10 years ago to help serve the demand for badly-planned cookie cutter houses, including McMansions.

When the housing market tanked, some stayed, weren’t quite legal and their brown skins became more evident to the white folks when they were shopping at the county’s many strip malls. In an odd way, it’s a bit like Arizona which had been run by dark-skinned Native Americans and Spanish for centuries and was not even a state until 1912. Then, around the 1960s, flocks of retirees of more northern European ancestry showed up. Suddenly, Arizona became “American” and had to be protected.

For his lieutenant governor’s campaign, Stewart seems to have dropped the immigrant bashing because it has gone out of style. Instead, he says, he weathered the recession by not raising taxes in Prince William but investing in roads and “public safety’ (code word for immigrant bashing?) and cutting $143 million from the county budget.

He says:  “Prince William County is a model for how to implement good conservative principles. Taxes are down, crime is down, and growth is up. I am going to bring to the Office of Lieutenant Governor the same conservative principles that I have led Prince William County with over the past 6 years.”

Naturally, he fails to mention that many of those new jobs come out of the federal budget, but no matter. The bigger point is that Stewart is going to have to come to terms sooner or later with the impact of immigration on economic growth now that recovery seems in the air. That will raise the immigration issue yet again.

Even the Wall Street Journal notes on its editorial pages today that too much visa protectionism is hurting the U.S. India is about to file a complaint with the World Trade Organization against a 2010 U.S. law that hikes fees for visas for highly skilled workers from India. Meanwhile, rejections of  H-1B and L-IB visa applications for well-qualified foreign workers are considerably up.

One wonders what Stewart, who is casting himself as  yet another “jobs” Republican, thinks about this. One thing he might be sure of. Some darker-skinned foreigners with PhD.s in highly technical fields that many Americans lack may think twice about moving to Prince William County, or maybe even the Old Dominion if he wins his state race.

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Posted in 2012, Courts and law, Crime and corrections, Demographics, Economic development, Economy, Federal, Finance, Housing, Immigration, Infrastructure, Politics, Race and race relations, Regulation, Taxes, Uncategorized

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What Baconauts Won’t Discuss

Posted on March 30, 2012 by Peter Galuszka| 15 Comments

By Peter Galuszka

Reading the Bacon’s Rebellion Blog always displays breathtaking contradictions. Chief among them is the huge contradiction between pushing “smart growth” and shunning any form of increasing gasoline taxation.

The crux is that we have lots of horrendous sprawl in the state such as all of Northern Virginia, Route 3 in Fredericksburg and U.S. 29 in Charlottesville. We have underfunded and under-maintained roads. That all adds up to a death spiral of bad planning and a slavish adherence to el-cheapo ways of doing things – all in the name of the Cato Institute.

In Virginia, for instance, the state gasoline tax is 17.5 cents a gallon. It hasn’t been raised in 25 years. It hasn’t even been made to adjust for inflation. By contrast, North Carolina’s gas tax is 38.9 cents per gallon.

As politicians, especially Republicans such as Gov. Robert F. McDonnell stubbornly refuse to consider the obvious solution to their many road issues, they have the rest of us jumping through one convoluted hoop after the other trying complicated ways to get funds without taxation. It’s a bit like trying to breathe without air.

That brings up another point – the insane accusations that Barack Obama is responsible for $4 a gallon gasoline. GOPers like Mitt Romney and Bobby Jindal (oil state guy) claim that gasoline prices have doubled under Obama and his energy policies are now creating havoc at the pump. The reality is that setting gasoline prices has a lot more to do with Asian demand the Iranian nuclear facilities than the policies of one U.S. president, who, by the way, has made big progress in weaning the country away from foreign oil.

Yet the biggest irony is spelled out in the latest issue of The New Yorker and comes, surprise, from Romney’s own economics adviser, Greg Mankiw. The Harvard professor recently wrote: “Economists who have added up all the externalities associated with driving conclude that a tax exceeding $2 a gallon makes sense…By taxing bad things more, we could tax good things less.”

Now, if you happen to read Bacon’s Rebellion’s most prominent blogger, we get an education how smart growth could make our lives better. We need to build more housing in more densely-packed areas, go for green zones, reduce wasteful and polluting gasoline use and try mass transit (all dipped in a libertarian flavor of course!)

The unspoken part is what Mankiw brings up. Federal gas tax is a puny 18.4 cents a gallon. If you raise  it to $2 a gallon, as Mankiw suggests, you’d suddenly have smart growth – presto! You’d have a lot of other things, too, such as much higher mileage cars, a fatter federal checkbook and less stupidity when it comes to highway and housing planning.

Are we going to get this? Of course not. The status quo politicians are hardly going to pretend the gas hike issue exists while blaming Obama for something not of his making. Meanwhile, readers of Bacon’s Rebellion will be treated to the increasingly amusing acts of contortionists stretching and folding any way they can to avoid discussing tax hikes. As a former altar boy I can appreciate trying to keep the dogma pure.

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The Uranium Quagmire

Posted on March 21, 2012 by Peter Galuszka| 2 Comments

By Peter Galuszka

For the 50 or so people sitting in the quaint Pepsi-Cola building Tuesday in Danville’s tobacco warehouse district, the information seemed to spawn more frustration than clarity. They had gathered to hear two economic impact reports regarding controversial plans by Virginia Uranium to mine an ore deposit a dozen miles to the north in Chatham.

“The bottom line is that we don’t know what will happen in the future,” said Katherine Heller, a senior economist at RTI International. The Research Triangle Park, N.C. consulting firm had been hired by regional agencies to estimate what happens if Virginia Uranium, owned by local and Canadian investors, proceeds with its plans for a uranium mining and milling complex.

The RTI report, in addition to one prepared for the state by Chmura Economics and Analytics in Richmond, says that barring human error and adequate regulations, the uranium project could be a boon for the depressed, former textile and furniture region. RTI predicts it could bring in 724 jobs and $162 million in a year affecting an area 50 miles from the mine and milling operation. Chmura’s report says essentially the same thing.

Those predictions, however, assume the state overcomes big hurdles, as yet another report by the National Academy of Sciences says it must face. Among those obstacles:

  • Virginia has no laws regulating uranium mining or milling ore into useable yellowcake. Gov. Robert F. McDonnell recommended delaying any decision on voiding a nearly three-decades-long ban on uranium mining in the state until more study is done. He has set up a group to study the issue.
  • According to RTI, the tailings from the uranium deposit that runs 1,500-foot deep will be stored permanently underground in an area near vital drinking water supplies. According to Heller, those dump sites will have to be monitored indefinitely, most likely for thousands of years. There are no plans yet to do such monitoring or how to pay for it.
  • There are no plans yet on requiring Virginia Uranium to set aside funds in escrow to help localities deal the costs and loss of businesses and taxes due a potential spill or accident. It also isn’t clear who will pay for the necessary state regulators and inspectors especially when the upcoming budget is tight and has yet to be approved.
  • There are lingering questions and confusion over how transparent the McDonnell group will be as it studies uranium mining. At first, Cathie J. France, a deputy director of the Department of Mines, Minerals and Energy who heads the uranium committee, said that her group would not hold public hearings but would accept written comment and provide a Web page. After public criticism, Martin L. Kent, McDonnell’s chief of staff, wrote legislators that due to “misunderstanding” there had been a “mischaracterization” of how public comment will be obtained. He says that the group will “accept public comment during four open meetings.”
  • The economic health of the uranium plans depends on highly volatile global uranium pricing. Heller said that RTI based its predictions on a “middle high” estimate that could be subject to big and unexpected swings.
  • So far, studies regarding uranium mining have cost various government entities more than $2.7 million. The RTI study cost $530,000. Yet they all confront the same problem, the impossibility of assessing risk or economic fallout if there are no state regulations or enforcement mechanisms in place to set a benchmark.

The bottom line is that the uranium idea seems terribly premature. Virginia Uranium has already drawn negative attention for taking legislators on expenses-paid trips to places such as Paris. McDonnell wants his committee to make recommendations to the 2013 General Assembly. That may be way too soon.

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Posted in Agriculture & forestry, Disaster planning, Economic development, Economy, Energy, Entitlements, Money in politics, Politics, Property rights, Science & Technology, Taxes, The Economy, Transportation, Water-waste water

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The GERM That Is Destroying Public Education

Posted on March 8, 2012 by Peter Galuszka| 7 Comments

By Peter Galuszka

Sarah Wyscoki seemed to be doing well as a fledgling fifth grade teacher in the District of Columbia public system. Last spring her appraisal praised her “sound teaching” along with her ability to motivate students and keep things positive, according to The Washington Post.

She was fired two months later. Why? The D.C. school system had adopted an Obama-instigated program that puts a much higher emphasis on students’ test scores and their “value added” computer consensus as a way to retain or get rid of teachers. Because of the shift in appraisal methods, Wyoscki went from being a highly regarded teacher to one with a stigma of being fired for poor performance.

Her predicament shows just how efforts to “reform” public school education are so wanting. Barack Obama shares plenty of blame with his “Race to the Top” program. So does George W. Bush with his “No Child Left Behind” program.

Both are known among educators as part of the “Global Education Reform Movement” (or “GERM,”) that is pushing tougher testing and productivity as yardsticks for academic success. But according to The New York Review of Books, the approach teaches children to learn the test and for teachers to teach it. Obama has said that teaching the test is not the way to go, but his program directly c contradicts that motive.

I’ve been fascinated by some of the bloggers on this blog, notably Jim Bacon, who suddenly have taken up the mantle for some type of GERM. Jim, who apparently has very little real life experience in K-12 public education either as a student or parent, writes predictably that education must be made “efficient” and “cost-effective.” I was always puzzled by Bacon’s sudden interest in public school education because it dovetailed with a national offense on the topic by conservatives.

There may be a few little problems with that idea. Writer Diane Ravitch in the Review notes:

“The GERM model seeks to emulate the free market, by treating parents as consumers and students as products, with teachers as compliant workers who are expected to follow scripts. Advocates of GERM often are hostile to teachers’ unions, which are considered obstacles to the managerial ethos necessary to control the daily life of a school. Unions make it hard, if not impossible, to carry out cost savings, such as removing the highest-paid teachers, and replacing them with low-wage, entry-level teachers.”

I wish I could have said it so well. Ravitch is spot on. The problem with the bean-counting efficiency types get hold of social programs, they start treating them as if they were General Electric making a jet engine blade to the best and cheapest tolerance. Fact is, kids aren’t widgets. The same ethos translates into health care, but that’s something else. Another problem with the GERM system is that it always punishes teachers and never the administrators who make much more in salary and decide the issues with the biggest impact, such as budgets.

In her article, Ravitch reviews a book about Finland’s highly successful public school program. Most Finnish teachers and principals belong to one union. The teachers are motivated by a love of teaching, not fear of some arbitrary test and “value-added” methodology that mysteriously massages the results.

I haven’t read the book about Finnish school, but I have been to Finland a bunch of times. It was our major source of resupply when I ran a news bureau in Moscow during the Cold War. I always found the Finns smart, efficient and friendly. I may still have an account at Stockman’s, downtown Helsinki’s largest department store.

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Posted in Children and families, Economy, Education (K-12), Public safety & health, Social services, Taxes

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