Category Archives: Taxes

Dave Brat’s Bizarre Statements

 By Peter Galuszka

Almost a year ago, Dave Brat, an obscure economics professor at Randolph- Macon College, made national headlines when he defeated Eric Cantor, the powerful House Majority Leader, in the 7th District Brat Republican primary.

Brat’s victory was regarded as a sensation since it showed how the GOP was splintered between Main Street traditionalists such as Cantor and radically conservative, Tea Party favorites such as Brat. His ascendance has fueled the polarization that has seized national politics and prevented much from being accomplished in Congress.

So, nearly a year later, what has Brat actually done? From reading headlines, not much, except for making a number of bizarre and often false statements.
A few examples:

  • When the House Education and Workforce Committee was working on reauthorizing a law that spends about $14 billion to teach low-income students, Brat said such funding may not be necessary because: “Socrates trained Plato in on a rock and the Plato trained Aristotle roughly speaking on a rock. So, huge funding is not necessary to achieve the greatest minds and the greatest intellects in history.”
  • Brat says that the Affordable Care Act (Obamacare) is a step towards making the country be more like North Korea. He compares North and South Korea this way:  “. . . it’s the same culture, it’s the same people, look at a map at night, half the, one of the countries is not lit, there’s no lights, and the bottom free-market country, all Koreans is lit up. See you make your bet on which country you want to be, right? You want to go to the free market.” One problem with his argument:  Free market South Korea has had a single payer, government-subsidized health care system for 40 years. The conservative blog, BearingDrift, called him out on that one.
  • Politifact, the journalism group that tests the veracity of politicians’ statements, has been very busy with Brat. They have rated as “false” or “mostly false” such statements that repealing Obamacare would save the nation more than $3 trillion and that President Obama has issued 468,500 pages of regulations in the Federal Register. In the former case, Brat’s team used an old government report that estimated mandatory federal spending provisions for the ACA. In the latter case, Politifact found that there were actually more pages issued than Brat said, but they were not all regulations. They included notices about agency meetings and public comment periods. What’s more, during a comparable period under former President George W. Bush, the Federal Register had 465,948 pages, Politifact found. There were some cases, however, where Politifact verified what Brat said.
  • Last fall, after Obama issued an executive order that would protect up to five million undocumented aliens from arrest and deportation, Brat vowed that “not one thin dime” of public money should go to support Obama’s plan. He vowed to defund U.S. Citizen and Immigration Services but then was told he couldn’t do so because the agency was self-funded by fees from immigration applications. He then said he would examine how it spent its money.

The odd thing about Brat is that he has a doctorate in economics and has been a professor. Why is he making such bizarre, misleading and downright false statements?

How to Reform Virginia’s Conservation Tax Credit

This map, taken from the Virginia Department of Conservation and Recreation website, shows the fragmented distribution of conservation easements on Virginia's upper peninsula.

This map, taken from the Virginia Department of Conservation and Recreation website, shows the fragmented distribution of conservation easements on Virginia’s upper peninsula.

by James A. Bacon

The state of Virginia spends $100 million a year in the form of tax expenditures to place conservation easements on land parcels around the state. Could the state get more for its investment? Amy Murphy, an environmental studies major at the University of Richmond, thinks so. In a paper presented to the  Climate Change and Resiliency Update Commission Tuesday, she recommended three changes t0 make the law more effective, including a restructuring of the tax credit to favor easements that offered greater environmental benefits.

Murphy’s paper on conservation easement reform was one of 11 prepared under the tutelage of biology professor Peter D. Smallwood and journalism professor Stephen D. Nash that were packaged for consideration by the climate change commission. Each paper focused on a practical, small-bore proposal for helping Virginia ecosystems adapt to warming temperatures. While climate change was the unifying theme, it struck me that many of the proposals make sense whether you believe in catastrophic global warming or not.

Murphy’s paper, in particular, addressed concerns that I have long harbored about Virginia’s conservation easement program. On the plus side, the program provides a way to protect Virginia lands from development that is far cheaper than purchasing the land outright. Landowners receive a tax credit worth 40% of the fair market of the value of the land, with deductions up to $100,000 for the year of donation and 10 subsequent years. In effect, taxpayers pay 40 cents on the dollar to protect land from development beyond its current use, typically agriculture or forestry. Not a bad deal.

The problem is that not all land is equally worth conserving. Some lands harbor endangered species and biological diversity; others don’t. Some easements abut other easements, creating larger bodies of protected habitat; others are tiny islands, creating fragments of little ecological value. The state caps the easement credits at $100 million per year but has no system for prioritizing one easement over another.

Murphy proposes creating a statewide plan, to be administered by the Department of Conservation and Natural Resources, to rank and prioritize land based on conservation value. Factors to be considered would include biodiversity, land resilience, land cover, proximity to existing lands and threat of development. Parcels would be scored. Parcels with high scores (of greater conservation value) would receive higher tax credits, while lower-scoring parcels would receive lower credits.

“Ideally, implementing these changes will result in obtaining easements on more land of high ecological importance without altering the total amount of tax credits given annually,” she writes.

A second tweak to the program would address problems created by freezing an easement in judicial stone. Static easements that prescribe specific responsibilities and expectations of future land owners can become outdated over the decades, limiting adaptation to changes in scientific knowledge and climate conditions. Murphy recommends that Virginia require the inclusion of “adaptive management plans” in easement terms. “These plans should require that the landowner manages the land in a manner consistent with preserving the conservation purpose of the easement rather than require specific management techniques.”

Finally, Murphy recommends setting up a system for monitoring easements to ensure that the terms are being adhered to. In Maine, which requires monitoring, 90% of the easements were in compliance — which implies that 10% were not. There is a cost to monitoring, she acknowledges, but the burden “may have a positive influence as [it] may force landowners to limit their holdings so they can provide proper stewardship to them. This may cause a selective pressure away from low value easements.”

Bacon’s bottom line: Virginia’s conservation easement program is a valuable tool for protecting the natural environment. It’s also a great tax break for landowners, some of whom may be motivated to participate for less-than-altruistic motives. Murphy’s recommendations would ensure that this significant state investment yields maximum benefits.

Pulitzer-Winning Series Exposed Richmond Firm

HDL LogoBy Peter Galuszka

There’s been plenty of discussion about the evils of rising health care costs, but unfortunately, one only hears of government wrong-doing.

Private industry actually spearheads a lot of the price gouging — sometimes with government complicity.

And it just so turned out that a high-flying Richmond firm — Health Diagnostic Laboratory  — was at the heart of a scandal that involved ripping off the Medicare program.

The Wall Street Journal on Monday was awarded a Pulitzer Prize for investigative reporting for exposing Medicare fraud. As a result of a front-page story published last Sept. 8, Tonya Mallory, the chief executive and co-founder of HDL, resigned. A few weeks ago, HDL was fined $47 million (while admitting no wrongdoing) after  their Sept. 8 story last year, for paying doctors kickbacks to use their blood tests.

The Journal broke the story after a court battle. It fought to lift a 33-year-old injunction that kept private data regarding Medicare patients. Once the data floodgates were opened, reporters pieced together all kinds of juicy information about health care firms, including HDL.

I have the story here on my “The Deal” blog in Style Weekly.

The upshot? Unlike what you often read on this blog, the problems of rising health care costs may not exactly be government sloth and inefficiency. It can be the private sector gaming the system to their benefit.

Beware Stalling Growth in Northern Virginia

northern virginia mapBy Peter Galuszka

For at least a half a century, Fairfax County, Alexandria and Arlington County have been a growth engine that that has reshaped how things are in the Greater Washington area as well as the Old Dominion.

But now, apparently for the first time ever, these Northern Virginia localities have stopped growing, according to an intriguing article in The Washington Post.

In 2013, the county saw 4,673 arrivals but in 2014 saw 7,518 departures. For the same time period, Alexandria saw 493 arrivals and then 887 departures. Arlington County showed 2,004 arrivals in 2013 followed by 1,520 departures last year.

The chief reason appears to be sequestration and the reduction of federal spending. According to a George Mason University study, federal spending in the area was $11 billion less  last year than in 2010. From 2013 to 2014, the area lost 10,800 federal jobs and more private sectors ones that worked on government contracts. Many of the cuts are in defense which is being squeezed after the wars in Afghanistan and Iraq.

The most dramatic cuts appear to be in Fairfax which saw a huge burst of growth in 1970 when it had 450,000 people but has been slowing for the most part ever since. It still grew to 1.14 million people, but the negative growth last year is a vitally important trend.

Another reason for the drop offs is that residents are tired of the high cost and transit frustrations that living in Northern Virginia brings.

To be sure, Loudoun County still grew from 2013 to 2014, but the growth slowed last year from 8,904 newcomers in 2013 to 8,021 last year.

My takeaways are these:

  • The slowing growth in NOVA will likely put the brakes on Virginia’s move from being a “red” to a “blue” state. In 2010, Fairfax had become more diverse and older, with the county’s racial and ethnic minority population growing by 43 percent. This has been part of the reason why Virginia went for Barack Obama in the last two elections and has Democrats in the U.S. Senate and as governor. Will this trend change?
  • Economically, this is bad news for the rest of Virginia since NOVA is the economic engine for the state and pumps in plenty of tax revenues that end up being used in other regions. Usually, when people talk about Virginia out-migration, they mean people moving from the declining furniture and tobacco areas of Southside or the southwestern coalfields.
  • A shift in land use patterns and development is inevitable. The continued strong growth of an outer county like Loudoun suggests that suburban and exurban land use patterns, many of them wasteful, will continue there. The danger is that inner localities such as Fairfax, Arlington and Alexandria, will be stuck with more lower-income residents and deteriorating neighborhoods. The result will be that localities won’t have as much tax money to pay for better roads, schools and other services.
  • Virginia Republicans pay lip service to the evils of government spending and have championed sequestration. Well, look what a fine mess they have gotten us into.

The rest of the Washington area is seeing slowing growth, but appears to be better off. The District’s in-migration was cut in half from 2013 to 2014 but it is still on the plus side. Ditto Montgomery and Prince George’s Counties.

NOVA has benefited enormously from both federal spending and the rise of telecommunications and Web-based businesses. It is uncertain where federal spending might go and maybe increased private sector investment could mitigate the decline. Another bad sign came in 2012 when ExxonMobil announced it was moving its headquarters from Fairfax to Houston.

In any event, this is very bad news for NOVA.

Amateur Hour at the General Assembly

virginia_state_capitol502By Peter Galuszka

If you are an ordinary Virginian with deep concerns about how the General Assembly passes laws that impact you greatly, you are pretty much out of luck.

That’s the conclusion of a study by Transparency Virginia, an informal coalition of non-profit public interest groups in a report released this week. Their findings  came after members studied how the 2015 General Assembly operated.

Among their points:

  • Notice of committee hearings was so short in some instances that public participation was nearly impossible.
  • Scores of bills were never given hearings.
  • In the House of Delegates, committees and subcommittees did not bother to record votes on 76 percent of the bills they killed.

“Despite a House rule that all bills shall be considered, not all are. Despite a Senate rule that recorded votes are required, not all are,” states the 21-page report, whose main author is Megan Rhyne, executive director of the Virginia Coalition for Open Government. Transparency Virginia is made up of 30 groups, including the American Civil Liberties Union, NARAL Pro-Choice Virginia, the the Virginia Education Association and the League of Women Voters in Virginia.

The scathing report underscores just how amateurish the General Assembly can be. It only meets for only 45 days in odd-numbered years and 60 days in even-numbered years. The pay is pin money. Delegates make only $17,640 a year and senators earn $18,000 annually.

It is not surprising then that a part-time group of 100 delegates and 40 senators can’t seem to handle their 101 committees and subcommittees that determine whether the consideration of thousands bills proceeds fairly and efficiently.

“A Senate committee chair did not take comment on any bills on the agenda except for the testimony from the guests of two senators who were presenting bills,” the report states. In other cases, legislators were criticized by colleagues for having too many witnesses. Some cut off ongoing debate by motioning to table bills. Bills were “left in committee” never to be considered.

The Virginia Freedom of Information Act requires that open public meetings be announced three working days in advance. A General Assembly session is considered one, long open session. But the FOIA is often subverted by sly legislators who manipulate the agendas of committees or subcommittees or general sessions.

Agendas of the General Assembly are not covered by the FOIA because there is too much work to cram in 45 or 60 days. In the case of local and state governments, similar meetings are, presumably because they meet more regularly. House and Senate rules do not stipulate how much notice needs to be given before a committee or subcommittee session. So, crucial meetings that could kill a bill are sometimes announced suddenly.

The setup favors professional lobbyists who stand guard in the Capitol ready to swoop in to give testimony and peddle influence, alerted by such tools as “Lobbyist-in-a-Box” that tracks the status of bills as they proceed through the legislature. When something important is up, their beepers go off while non-lobbyist citizens with serious interests in bills may be hours away by car.

The report states: “While most of Virginia’s lobbyists and advocates are never more than a few minutes from the statehouse halls, citizens and groups without an advocacy presence may need to travel long distances.” Some may need to reschedule work or family obligations, yet they may get only two hours’ notice of an important meeting. That’s not enough time if they live more than a two-hour drive from Richmond.

The report didn’t address ethics, but this system it portrays obviously favors lobbyists who benefit from Virginia’s historically light-touch approach when it comes to limited gifts. That issue will be addressed today when the General Assembly meets to consider Gov. Terry McAuliffe’s insistence that a new ethics bill address the problem of allowing consecutive gifts of less than $100 to delegates or senators.

The only long-term solution is for Virginia to consider creating a legislature that works for longer periods, is better paid, more professional and must adhere to tighter rules on bill passage. True, some 24 states have a system somewhat like Virginia and only New York, Pennsylvania and California have truly professional legislatures.

The current system was created back in Virginia was more rural and less sophisticated. But it has grown tremendously in population and importance. It’s a travesty that Virginia is stuck with amateur hour when it comes to considering legislation crucial to its citizens’ well-being.

Yearning for Something New from “Rich State, Poor State”

rspsVirginia ranks No. 12 in the American Legislative Exchange Council’s just-issued eighth annual “Rich State Poor State” ranking of the economic outlook for the 50 states based on 15 state policy variables. Generally speaking, states the report authored by supply-side economists Arthur D. Laffer, Stephen Moore and Jonathan Williams, U.S. states that spend less (especially on income-transfer programs) and tax less experience higher economic growth rates than states that tax and spend more.

There is no question in my mind that, all other things being equal, higher taxes discourage business investment, job growth and wealth creation. And the evidence seems incontrovertible that over the long run — ironing out short- and medium-term fluctuations — a lower-tax environment is conducive to economic growth.

However, all other things are never equal. Some public investments, especially in education and infrastructure, have a higher social return on investment than others — and, arguably, a higher return than private investment. Likewise, public investment that is efficiently administered yields greater benefits than public investment guided by politics and cronyism.

The ALEC-Laffer economic competitiveness index was a useful ranking when it first came out. It’s important to know how states compare in their tax burden and other measures of economic freedom, such as debt service, judicial impartiality, number of public employees, right-to-work status and minimum wage. But the discussion can’t stop there. Unfortunately, “Rich States, Poor States” hasn’t substantively advanced the discussion since it was first implemented.

  • Yes, job growth and GDP growth are important measures, but they aren’t the only important measures. How about per capita income growth? How about the distribution of income growth — are the rich getting rich while everyone else stagnates? This study should incorporate a wider range of metrics.
  • Which taxes have the most adverse economic consequences? Do certain taxes distort the economy or alter incentives in ways that are more destructive than other taxes?
  • How have the outlook predictions held up? It would be useful to go back to the very first “Rich States, Poor States” ranking and compare outlook to actual performance. What is the correlation between measures of economic freedom and different metrics of growth? What percentage of the variation between states can be explained by Laffer’s measures? 10 percent? 20 percent? More? Less? What other variables matter?
  • Rather than look at total government spending, the study should look at different segments of spending. Is there a correlation between how much a state spends on education and economic outcomes? How about what a state spends on infrastructure? And how about amenities that supposedly matter to members of the creative class?

It seems like Laffer, Moore and Williams are on auto-pilot. The discussion about economic development has left “Rich States, Poor States” in the dust. Simply reiterating old nostrums, no matter how true in a general sense, doesn’t advance the public policy debate. Whacking tax rates is no recipe for prosperity, as Kansas Governor Sam Brownback has learned from his tax-cutting adventure. If this report doesn’t start plowing new ground, intellectually speaking, it will soon outlive its usefulness.

— JAB

A New, Improved Ken Cuccinelli?

ken-cuccinelliBy Peter Galuszka

Is one-time conservative firebrand Ken Cuccinelli undergoing a makeover?

The hard line former Virginia attorney general who lost a bitter gubernatorial race to Terry McAuliffe in 2013 is now helping run an oyster farm and sounding warning alarms about a rising police state.

This is remarkable switch from the man who battled a climatologist in court over global warming; tried to prevent children of illegal immigrants born in this country from getting automatic citizenship; schemed to shut down legal abortion clinics; tried to keep legal protection away from state gay employees; and wanted to arm Medicaid investigators with handguns.

Yet on March 31, Cuccinelli was the co-author with Claire Guthrie Gastanaga, executive director of the American Civil Liberties Union of Virginia of an opinion column in the Richmond Times Dispatch. Their piece pushes bipartisan bills passed by the General Assembly that would limit the use of drones and electronic devices to read and record car license plate numbers called license plate readers or LPRs.

Cuccinelli and Gastanaga say that McAuliffe may amend the bills in ways that would expand police powers instead of protect privacy. “The governor’s proposed amendments to the LPR bills gut privacy protections secured by the legislation,” they write. The governor’s amendments would extend the time police could keep data collected from surveillance devices and let police collect and save crime-related data from drones used during flights that don’t involve law enforcement, they claim.

When not protecting Virginians from Big Brother, Cuccinelli’s been busy oyster farming. He has helped start a farm for the tasty mollusks on the historic Chesapeake Bay island of Tangier. According to an article in The Washington Post, Cuccinelli got involved when he was practicing law in Prince William County after he left office.

He would visit the business and get roped into working at odd jobs. He apparently enjoyed the physical labor and the idea that oysters are entirely self-sustaining and help cleanse bay water.

Environmentalists scoff at the idea, noting that as attorney general, Cuccinelli spent several years investigating Michael Mann, a former University of Virginia climatologist who noted that humans were responsible for the generation of more carbon dioxide emissions and that has brought on climate change.

Some have pointed out that if Cuccinelli had had his way, he would have helped quash climate science, generated even more global warming and sped up the inundation of Tangier Island by rising water levels.

It will be interesting to see if Cuccinelli intends to rebrand himself for future political campaigns and how he tries to reinvent himself.

Cruz, “Liberty” and Teletubbies

AP CRUZ A USA VA By Peter Galuszka

Where’s the “Liberty” in Liberty University?

The Christian school founded by the controversial televangelist Jerry Falwell required students under threat of a $10 “fine” and other punishments to attend a “convocation” Monday where hard-right U.S. Sen. Ted Cruz announced his candidacy for president.

Thus, Liberty produced a throng of people, some 10,000 strong, to cheer on Cruz who wants to throttle Obamacare, gay marriage, abolish the Internal Revenue Service and blunt immigration reform.

Some students stood up to the school for forcing them to become political props. Some wore T-Shirts proclaiming their support of libertarian Rand Paul while others protested the university’s coercion. “I just think it’s unfair. I wouldn’t say it’s dishonest, but it’s approaching dishonesty,” Titus Folks, a Liberty student, told reporters.

University officials, including Jerry Falwell, the son of the late founder, claim they have the right as a private institution to require students to attend “convocations” when they say so. But it doesn’t give them the power to take away the political rights of individual students not to be human displays  in a big and perhaps false show.

There’s another odd issue here. While Liberty obviously supports hard right Tea Party types, the traditional Republican Party in the state is struggling financially.

Russ Moulton, a GOP activist who helped Dave Brat unseat House Majority Leader Eric Cantor in a primary last summer, has emailed party members begging them to come up with $30,000 to help the cash-strapped state party.

GOP party officials downplay the money problem, but it is abundantly clear that the struggles among Virginia Republicans are as stressed out as ever. Brat won in part because he cast himself as a Tea Party favorite painting Cantor as toady for big money interests. The upset drew national attention.

Liberty University has grown from a collection of mobile homes to a successful school, but it always has had the deal with the shadow of its founder. The Rev. Falwell gained notoriety over the years for putting segregationists on his television show and opposing gay rights, going so far as to claim that “Teletubbies,” a cartoon production for young children, covertly backed homosexual role models.

Years ago, the Richmond Times-Dispatch published a story showing that the Rev. Falwell took liberties in promoting the school he founded in 1971. Brochures touting the school pictured a downtown Lynchburg bank building with the bank’s logo airbrushed off. This gave the impression that Liberty was thriving with stately miniature skyscrapers for its campus.

Some observers have noted that Liberty might be an appropriate place for the outspoken Cruz to launch his campaign. The setting tends to blunt the fact that he’s the product of an Ivy League education – something that might not go down too well with Tea Party types – and that he was actually born in Canada, although there is no question about his U.S. citizenship and eligibility to run for question.

Hard-line conservatives have questioned the eligibility of Barack Obama to run for U.S. president although he is likewise qualified.

With Cruz in the ring and Liberty cheering him, it will make for an interesting campaign.

An Inexpensive Experiment

Henrico industrial property anyone?

Henrico industrial property anyone?

by James A. Bacon

Henrico County, my home county, is conducting an inexpensive public policy experiment. If it pans out, the county could improve its competitive posture as a manufacturing location. If it doesn’t, the county hasn’t lost much and can always revert to the previous status quo.

County Manager John A. Vithoulkas has included a 70% cut to the county’s machine & tools tax in next year’s annual budget from $1 per $100 in value to $0.30, a measure that will cost the county an estimated $1.5 million a year in revenue. The cut appears poised to pass, reports Ted Strong with the Richmond Times-Dispatch. It received no opposition in last week’s legislative budget hearings.

“In the long term, this should lead to more manufacturing jobs, which will add more revenue to the county’s coffers,” Vithoulkas said. “We are competing for jobs in the world market now. And we aim to not just compete, but to win.”

The move will help the county capitalize on increased activity in the manufacturing sector, especially “on-shoring” or the repatriation of manufacturing jobs to the United States from abroad, said Gary McLaren, executive director of the Henrico County Economic Development Authority. “We’re serious about attracting manufacturing jobs to Henrico County, and I think this is proof of that.”

Brett Vassey, president of the Virginia Manufacturers Association, described the tax as one of the biggest impediments to manufacturing expansion in Virginia. The tax discourages companies from spending on new equipment that will make them more competitive. “Capital is like water. It flows to the lowest point,” he said.

I’m not totally convinced that the tax cut will make a difference, and it will be hard to determine if is a decisive factor even if Henrico does attract new manufacturing investment. But I think it’s worth a try. On-shoring is a major trend, and Virginia localities should try to exploit it. As labor costs rise in China, many companies are thinking about pulling some of their manufacturing operations back to the U.S. The trend is especially strong in energy-intensive industries that can take advantage of super-low natural gas prices.

But I have two questions. First, will the surging value of the U.S. dollar hurt Virginia (and the rest of the nation) as a manufacturing platform? The economic commentary is almost unanimous that manufacturing will be one one of the hardest-hit sectors. As long as Europe and Japan persist in competitive devaluations of their currencies as a tool to stimulate their economies through their own versions of Quantitative Easing, U.S. manufacturing will suffer.

Second, will Virginia be in a position to exploit natural gas prices? Virginia produces very little of its own natural gas; it relies upon pipelines to bring in gas from the Gulf Coast or (in the future) the Marcellus Shale gas-producing areas of the country. Virginia is bumping up against the ceiling of its gas capacity.

During a February cold snap, Virginia Natural Gas, the AGL Resources subsidiary that distributes gas to the Hampton Roads area, was hard pressed to keep the gas flowing. “Every valve was open,” Ken Yagelski, managing director of gas supply, told me in a recent interview. “We were utilizing all the capacity resources we had to serve our customers.” The company curtailed service to all 108 of its customers who had contracted to have their gas supply interrupted in exchange for a discount in rates. Those customers were prepared for the interruption, so no harm was done, but Yagelski says the incident could be a prelude to the future.

Demand for natural gas in in VNG’s service area is growing one or two percent yearly. VNG is looking to the proposed 550-mile Atlantic Coast Pipeline, a venture in which it is a partner, to supply the gas for the next generation of growth. But the routing of that pipeline has proved to be incredibly controversial, and there is no guarantee at this point that it will be built. If it isn’t,  supply curtailments likely will become more frequent and, at some point, VNG would have to stop taking new customers.

VNG serves Hampton Roads, but would-be industrial customers in the Richmond region would be just as concerned about the reliability of gas supplies.

Bacon’s bottom line: Attracting new manufacturing investment through lower machine & tool taxes is no slam-dunk, and it would be unwise to create expectations that it will lead to sudden success. But if the spike in the value of the dollar proves to be temporary and the Atlantic Coast Pipeline does get built, Henrico’s bet should be one well worth taking. At the very least, a broad-based tax cut that benefits incumbent businesses as well as newcomers is vastly preferable to doling out subsidies and tax incentives to bribe one specific company to invest here.

Interview: McAuliffe’s Economic Goals

 maurice jonesBy Peter Galuszka

For a glimpse of where the administration of Gov. Terry McAuliffe is heading, here’s an interview I did with Maurice Jones, the secretary of commerce and trade that was published in Richmond’s Style Weekly.

Jones, a graduate of Hampden-Sydney College and University of Virginia law, is a former Rhodes Scholar who had been a deputy secretary of the U.S. Department of Housing and Urban Development under President Barack Obama. Before that, he was publisher of The Virginian-Pilot, which owns Style.

According to Jones, McAuliffe is big on jobs creation, corporate recruitment and upgrading education, especially at the community college and jobs-training levels. Virginia is doing poorly in economic growth, coming in recently at No. 48, ahead of only Maryland and the District of Columbia which, like Virginia have been hit hard by federal spending cuts.

Jones says he’s been traveling overseas a lot in his first year in office. Doing so helped land the $2 billion paper with Shandong Tranlin in Chesterfield County. The project, which will create 2,000 jobs, is the largest single investment by the Chinese in the U.S. McAuliffe also backs the highly controversial $5 billion Atlantic Coast Pipeline planned by Dominion because its natural gas should spawn badly-needed industrial growth in poor counties near the North Carolina border.

Read more, read here.

(Note: I have a new business blog going at Style Weekly called “The Deal.” Find it on Style’s webpage —   www.styleweekly.com)