Category Archives: Transportation

One More Time Now… Devolve Transportation Funding to the States

Graphic credit: Wall Street Journal

Graphic credit: Wall Street Journal

by James A. Bacon

Congress is floundering over what to do about the Highway Trust Fund, which collects the federal gasoline tax and plows it back to the states to finance a smorgasbord of transportation projects. The original justification for the gas tax was to build the Interstate Highway System, but the program has morphed over the years into a  piggy bank for all manner of Interstate, highway, transit and miscellaneous projects that must be supplemented with General Fund appropriations. Congress persons are loathe to relinquish the perk of doling out money to constituents, but fiscal pressures make it impractical to continue the General Fund subsidies, while raising the gas tax is a political killer. What’s a Congress person to do? What he or she does best — dither.

Meanwhile, in the wake of Amtrak’s deadly derailment last week, we hear the usual wailing and gnashing of teeth that America isn’t investing enough in infrastructure.

The idea that the United States is significantly under-investing in infrastructure is nonsense — the kind of special pleading you hear from big construction and engineering firms who grow fat on infrastructure spending. Among the G-7 countries (Japan, Germany, France, the United Kingdom, Italy, Canada and the U.S.), the total capital stock of the U.S. (transportation and other infrastructure) is the third highest, equivalent to 52% of the Gross Domestic Product, as seen in the graphic above, published today in the Wall Street Journal. While Japan is off-the-charts higher, that country arguably has way over-invested in transportation, creating a system that it cannot afford to maintain over the long run.

infastructure_quality

Graphic credit: Wall Street Journal

Likewise, the quality of infrastructure (the general state of repair) is also in the middle of the pack, as seen at left.

The problem isn’t the level of spending, it’s the mis-allocation of spending. As WSJ columnist Greg IP writes (sounding a long-time theme here at Bacon’s Rebellion), the economic Return on Investment of federally funded projects varies widely; indeed  the feds have no mechanism for ascertaining ROI. “It’s nobody’s job in Washington to figure out which roads or bridges we should invest in,” Ip quotes Aaron Klein with the Bipartisan Policy Center as saying.

pavement_life_cycle2It’s time for Congress to get out of the business of building new transportation infrastructure. Having constructed the Interstate Highway System, Uncle Sam should commit to maintaining it and devolve responsibility for other projects to the states. That means adjusting the gas tax to whatever level it takes to maintain that system at an optimal level, and no higher. By optimum, I mean at a reasonably high state of quality and repair and with sufficient spending to undertake deep repairs at the most economically advantageous point on the life-cycle curve. Presumably, that level would require a much lower federal gas tax than the one in place now. A reduction in the federal gas tax would free the states to increase their own gas taxes by a like amount, more, or less, depending upon their circumstances.

A bedrock principle for maintaining an optimum level of infrastructure investment is to put each component — roads, highways, mass transit, ports, airports, railroads — on a user-pays basis. When users pay for the transportation amenities they want, they are more careful about what they ask for. Any other system results in a political free-for-all in which every interest group seeks to get its favored projects funded at the expense of everyone else, in which case ideology and politics prevail over economic rationality.

Juggling Risk on Interstate 66

i66by James A. Bacon

The specter of the botched U.S. 460 project will be hovering over the Commonwealth Transportation Board (CTB) today as Transportation Secretary Aubrey Layne updates the board about project financing for Interstate 66 outside the Washington Capital Beltway, expected to cost in the realm of $2 billion.

Del. Greg Habeeb, R-Salem, set the stage Sunday in an op-ed in the Richmond Times-Dispatch, in which he advocated using a Public Private Partnership (P3) to finance improvements to the critical Northern Virginia transportation corridor as opposed to a “design-build” contract. Design-build was the approach employed in the U.S. 460 connector between Petersburg and Suffolk that resulted in $300 million spent “without a single shovel of dirt being turned.”

Habeeb is asking a vital question: What is the best way to finance and operate mega-transportation projects with costs running into the billions of dollars? Under the old model, the Virginia Department of Transportation (VDOT) designed, built, financed and operated big projects entirely in-house. But with limited transportation funding available and restrictions on how much the state could borrow during the Warner, Kaine and McDonnell administrations, nothing much was getting built. The idea behind P3s was to leverage scarce state funding with private sector funding for tolled projects capable of generating a revenue stream. Toll revenues would pay off the private-sector bonds used to finance the improvements. In effect, P3s amounted to an end run around the tight strictures on how much debt the commonwealth could issue without jeopardizing its AAA credit rating. The debt, and the risk that went along with it, would be shifted to the private sector.

Habeeb likes P3s. Construction of express lanes on Interstate 495 and 95 in Northern Virginia opened on budget and ahead of schedule, he says. Further, he adds, “These two projects produced $5 billion in economic activity but because they were pursued as P3s taxpayers contributed only $492 in state transportation funds.”

By contrast, he writes, the U.S. 460 project was conducted as a design-build, in which design and construction were outsourced to a private-sector consortium but the state planned to finance and operate the highway, “leaving taxpayers on the hook if the project failed” … which it did, costing taxpayers in the neighborhood of $300 million.”

I think there’s a time and place for P3s, but the cost-benefit calculus is more complex than Habeeb acknowledges in a 750-word op-ed. The big bugaboo is risk. There are many types of risk associated with transportation megaprojects, and it isn’t always clear what they are and who is shouldering it. Virginia’s Office of Transportation Public Private Partnerships was tracking risks in the U.S. 460 project — the risk that really mattered, and ended up killing the project, whether or not the U.S. Army Corps of Engineers would not issue required wetlands permits — but the concerns were ignored by the McDonnell administration for political reasons.

Would the U.S. 460 fiasco have been avoided if it had been a P3? Undoubtedly, a private-sector partner would have taken greater precautions to get its permits lined up before expending $300 million of its own money on design and construction-mobilization costs. So, most likely, the fiasco would not have occurred. On the other hand, a P3 partnership was not practicable. Toll revenues would have been so meager that only a small percentage of the project could have been funded privately — that’s why the state decided to take over the financing itself.

It’s easy to forget that there are risks associated with P3s as well. What happens if toll revenues fail to meet forecasts, as has been the case with the 495 Express Lanes? It all depends on how a particular deal is structured. Many projects are backed by federal loan guarantees called TIFIA (Transportation Infrastructure Finance and Innovation Act) loans. Every bond financing provides a buffer for modest revenue shortfalls. But if revenues fall far short, TIFIA eats the loss before non-guaranteed loans do. Instead of state taxpayers taking the hit, federal taxpayers do. If TIFIA bond holders get wiped out, then holders of the private bonds are next in line. In the worst case scenario, as happened with the Pocahontas Parkway outside Richmond, a project can get turned over to the banks.

The commonwealth ordinarily takes great pains to protect itself from financial liabilities in case of P3 failure. But there are other risks. P3 contracts usually last 50 to 100 years, and private-sector partners negotiate terms that protect their revenue stream over the long run. Typically, they insert clauses that restrict the state from building roads, rail lines or other transportation alternatives that might divert paying customers. Unfortunately, there is no way to predict 50 years in advance how future growth and development will alter travel patterns and what options might be necessary.  P3 anti-competitive clauses could limit the ability of the state to provide adequate transportation to some of its citizens far into the future. Those are risks that may not become evident for decades.

I, for one, will be interested to see how Secretary Layne proposes to finance the I-66 improvements. Hopefully, he’s learned the right lessons from the U.S.460 experience.

Portsmouth Takes a Hit from Tunnel Construction

tunnel_traffic

Vehicle traffic through Downtown and Midtown tunnels. Image credit: James V. Koch. Click for larger image.

by James A. Bacon

The City of Portsmouth has been clobbered by the imposition of tolls on the Midtown Tunnel and Downtown Tunnel connecting the city to Norfolk, and hammered again by construction-related disruptions to service on the tunnels. Combined, the impact of tolls and disruption have reduced quarterly taxable sales by $24 million annually, materially harming businesses and crimping tax revenue, finds James V. Koch, president emeritus of the economics department at Old Dominion University in a new study.

In the report, “The Impact of Tolls on the City of Portsmouth: The Evidence 15 Months Later,” Koch is especially critical of the Virginia Department of Transportation (VDOT) and its private-sector partner, the Elizabeth River Company (ERC), for providing motorists inadequate warning of the interruptions to traffic disruptions, thus creating widespread uncertainty among discretionary drivers “east of the river” who might otherwise travel to stores, recreation, churches or social gatherings in the city. “In many drivers’ minds, tunnel closures have become sufficiently unpredictable that they are not going to take chances,” he writes.

Koch does not criticize the decision of VDOT under the McDonnell administration to impose tolls on the formerly toll-free tunnels in order to finance construction of new tunnel lanes and related land-side transportation improvements to alleviate some of the worst traffic congestion in Hampton Roads. Benefits will be felt throughout the region. But he does note that Portsmouth is suffering disproportionately.

Says Koch: “My rough estimate is that Portsmouth is impacted 31 percent more than Suffolk by the tolls and closures, 459 percent more than Norfolk, and 616 percent more than Virginia Beach.”

Bacon’s bottom line:  It’s no surprise that imposing tolls where there were none imposes economic pain. What I find most interesting is Koch’s conclusion that the impact of construction-related disruptions was almost as severe — $10 million of the $24 million — but could be partially mitigated if ERC and VDOT did a better job of alerting drivers, either through advertising or signage, of those disruptions. That is a management issue, not an inevitable consequence of the construction project.

Koch thinks the hit to taxable sales could get worse this year and next. However, the region should start feeling the benefits when the project is complete. As Koch writes:

When all of the construction is completed (and setting tolls aside), the cost of driving in and out of Portsmouth will decline. Vehicles will be able to travel at higher speeds, fewer traffic jams will confer time savings, travel will become much more predictable, vehicle wear and tear will decline, and there will be diminished pollution.  To the extent these reductions in costs exceed the size of the tolls being paid, they will make Portsmouth a more attractive place to live and/or to locate a business.

From a macro-economic perspective, Portsmouth may wind up better off in the long run. But that won’t be much consolation to the businesses that Koch thinks very well could go out of business in the meantime. VDOT and ERC need to act quickly to mitigate what harm they can.

Injecting the “Public” Back into Public-Private Partnerships

P3sWe haven’t heard much about Public-Private Partnerships since the days of the McDonnell administration, which touted P3s as a tool for leveraging limited state transportation funding into more road and rail construction. The problem with the McDonnell team’s reliance on P3s wasn’t the grand strategy but the execution. The tolling of the Downtown-Midtown Tunnel in Norfolk proved so controversial that the state felt compelled to cough up money to buy down the cost of the tolls. Also, the U.S. 460 Connector turned into a fiasco potentially costing the state $300 million, including $250 million in payments to the concessionaire to do nothing even though the U.S. Army Corps of Engineers had balked at issuing wetland permits for the proposed route.

Trip Pollard, staff attorney with the Southern Environmental Law Center, has been one of the most outspoken critics of Virginia’s P3s. But in a recent post on the Brookings Institution blog, he says he sees them as a potentially valuable tool to supplement public funds with private capital. Rather than throw out the P3 option, he argues, we need to build more transparency, public input and government oversight into the P3 approval process. He offers several concrete suggestions.

Speaking of public engagement with P3s, here are the new  “P3 Public Engagement Guidelines” released by the Office for Virginia Public-Private Partnerships. I’m not sure it’s possible to fully reconcile the private sector’s desire to negotiate in secrecy, not in the press, and the public’s right to know. But the McAuliffe administration is making a yeoman’s effort of trying to thread that needle.

Meanwhile, occasional Bacon’s Rebellion contributor Randy Salzman is still doggedly pursuing P3s. He asks a simple question: How is it possible that so many P3s have proven to be financial disasters, and why, knowing their abominable track record, do private-sector players continue to invest in them? Do the private participants engage in behind-the-curtain financial engineering that makes P3s profitable even if revenues fall short and the projects tank? He has come up with some tantalizing leads but no definitive answers. My suspicion: Follow the TIFIA loans, federally backed loan guarantees that absorb much of the risk inherent in P3 projects. What are the underwriting standards for those loans? How many have gone bad? How much in losses has the federal government sustained?

– JAB

Private Investment in the Public Realm

libbie_mill_lake
by James A. Bacon

The American suburbs built since World War II have many deficiencies, not the least of which are expensive, fiscally unsustainable infrastructure and a proclivity toward traffic congestion. But the greatest drawback of all gets the least attention: the poverty of the public realm. Outside of shopping malls, there really is no public realm in the post-World War II suburbs. Streets are not designed for walking. There are no plazas. Parks are accessibly mainly by automobile. The only gathering places are found indoors — libraries, churches, fitness clubs and the like.

But tastes are changing, and a new generation of real estate developers understands that creating quality public spaces — particularly streets, sidewalks and parks — allows them to charge premium prices for their buildings. The key insight they have grasped is that humans are social creatures. Yes, people like their privacy of their homes, but they also enjoy being around other people. They like to walk. They like to watch other people. They like gathering in groups.

Developers in the Richmond region have gotten the message that there is a large unmet demand for “walkable urbanism,” places that make it easy, even delightful, for people to walk around. Walkability goes deeper than the utilitarian function of allowing people to substitute walk trips for car trips, thus reducing traffic congestion. People like walkability because it facilitates social interaction. Sadly, most efforts to build walkable communities in the Richmond suburbs have been underwhelming.

That’s why I’m paying close attention to the development of Libbie Mill-Midtown in Henrico County. Gumenick Properties may be paying keener attention to the quality of the public spaces they’re building in the 800-acre, $434 million project than has any other suburban developer in the history of the Richmond region. As a sign of how seriously Gumenick takes the public realm, the company has engaged the Project for Public Spaces, a non-profit organization launched by William Whyte, the pioneer who first studied the sociology of small public spaces from a scientific perspective.

Little of what Gumenick is doing is new — it’s just been forgotten. Company spokesman Ed Crews describes the project as “retro.” Libbie Mill-Midtown seeks to create “what the urban environment was a century ago,” before counties outlawed mixed-use zoning and developers designed communities largely around the car.

As I explained in a recent post (see “The Invisible Parking Garage“),  Gumenick is building a pedestrian-friendly community. The mixed-use  project is laid out in a street grid with wide sidewalks. Great attention is paid to defining the pedestrian street space and providing a variety of destinations within easy walking distance of apartments and town homes. Gumenick donated land for construction of a new Henrico County library, and plans call for lots of street-level space for restaurants, shops and local services.

Parking is only one dimension of the challenge. The landscape of the Richmond region is pocked with ugly sediment ponds installed to manage storm water. Occasionally, someone sticks some gazebos by them or turns them into something visually interesting like a man-made wetlands. But Gumenick is investing the resources to transform its storm water pond into the focal point of the entire development.

The rendering above is a conceptual sketch of what that lake might look like. The final design will depend upon the buildings constructed around it. But there will be trails, a fountain, plazas, an amphitheater and places where people can touch the water. One of the key insights learned from the Project for Public Spaces, says Crews, is not to fill in the public space with fixed benches and other objects. Instead, provide portable furniture that people can rearrange to accommodate the size of their small groups.

Shane Finnegan, vice president of construction, says the plaza will be built for flexibility in order to accommodate a wide range of activities. For instance, to accommodate tents for farmer’s markets and other events, the design calls for embedding hold-downs in the pavement. Alternatively, the community might bring in taco trucks and a marimba band. The programmatic element of bringing in events and concerts will be important in Libbie Mill-Midtown, as it is in downtown Richmond, Innsbrook and other areas. The difference is that in Libbie Mill, the physical space will be designed from the beginning with that programmatic element in mind.

“This won’t be built in a day,” cautions Crews. Indeed, the project is expected to take 10 years to complete, depending upon market conditions. There needs to be a critical mass of people living and working in the neighborhood for activity in the public spaces to take off.

Bacon’s bottom line: Gumenick is betting that investing in the public realm will pay off. I’d wager that the company has it right.

The Invisible Parking Garage

Draft rendering of planned apartment building at Libbie Mill-Midtown shows how garage rooftop will be used as communal space.

Draft rendering of a planned apartment building at Libbie Mill-Midtown shows how garage rooftop will be used as communal space. Illustration credit: Gumenick Properties.

by James A. Bacon

It is axiomatic among New Urbanists and like-minded brethren in the Smart Growth movement that parking garages create dead space in the urban fabric that discourages walkability and depresses neighboring property values. Some architects try to dress up the structures by giving them facades that imitate the look of regular buildings, draping them with plantings or otherwise making them visually interesting. Another strategy is to hide garages underground or relegate them to the middle of the block.

There is nothing new under the sun, as the old saying goes, so the Gumenick Properties design for a planned apartment building in its Libbie Mill-Midtown project may not be the first of its kind. But I feel safe in saying that it is unique to the Richmond real estate market — and it’s a solution that, economics permitting, should be employed more frequently.

Libbie Mill-Midtown is an 80-acre mixed-use development in Henrico County roughly midway between downtown Richmond and the Innsbrook Corporate Center. The company is billing the $434 million community as “ten minutes from everything.” When complete in ten years or so, depending upon market conditions, the project is expected to have 994 for-sale homes, 1,096 apartments, 160,000 square feet of retail space, a public library and office space. Marketing the project to people who want to rely upon the automobile less, Gumenick is placing tremendous emphasis on walkability.

The development will contain a grid street system and wide sidewalks, and designers are paying close attention to the science of “place making — creating public spaces where people enjoy spending time, as I gathered during an interview last week with  Shane Finnegan, Gumenick’s vice president of construction, and Ed Crews, company spokesman.

This schematic shows the ground-level view of the retail-apartment building planned for Libbie Mill-Midtown.

This schematic shows the ground-level view of the retail-apartment building planned for Libbie Mill-Midtown. (Click for larger image.)

One of the basic rules of place making is to minimize the expanse of parking lots and to hide the parking garages from view. Having erected two retail-office buildings, Gumenick now is designing the first apartment building, which will consist of 40,000 square feet of street-level retail space and 327 apartment units above. In a nod to market reality, the developer acknowledges that most suburban Henrico tenants, while wanting to live in a walkable community, still will own automobiles. Rather than surround the apartments in a sea of asphalt parking, which would diminish the appeal of the streetscape, Gumenick plans to encase the parking garage inside street-facing stores.

Other developers have done the same thing but Gumenick is going one step further. It’s building a pool, terrace and public area on the roof of the parking garage. The parking lot will be totally hidden from view, not just from the street but from the perspective of the tenants living in the apartment building.

Bacon’s bottom line: Gumenick did not divulge financial details of the planned parking structure, but it doesn’t take a construction engineer to figure out that reinforcing a garage so it can support trees, decks and a swimming pool is not an inexpensive proposition. But the invisible parking garage accomplishes two important goals. First, it allows Gumenick to create a shared recreation/courtyard for its tenants. Second, it tucks parking into the middle of the block, preserving pedestrian-enhancing streetscapes. It will be interesting to see how the market responds. Will people pay a premium to live in a walkable community with such amenities? I would. I’m betting others would, too.

The Microtransit Revolution Has Arrived

Oren Shoval and Daniel Ramot, founders of New York's Via private transit system.  “Our goal is to transform public transit from a regulated system of rigid routes and schedules to a fully dynamic, on-demand network,” they say.

Oren Shoval and Daniel Ramot, founders of New York’s Via private transit system. “Our goal is to transform public transit from a regulated system of rigid routes and schedules to a fully dynamic, on-demand network,” they say. What does it take get these guys to come to Virginia?

by James A. Bacon

The smartphone-engendered revolution in urban mobility may have a new name: microtransit. At one end of the transportation is our old friend, the automobile. At the other, we have trains and buses, collectively labeled mass transit. But there is an emerging in-between option, which Lisa Nisenson, writing in the Strong Towns blog, dubs micr0-transit.

Eric Jaffe, a senior associated editor at CityLab, picked up the term in an article last week headlined “How the microtransit movement is changing urban mobility.”

This, of course, is the same phenomenon that I’ve been blogging about on Bacon’s Rebellion for years. As soon as Uber demonstrated that (a) it was possible to connect riders with vehicles through smartphones and (b) algorithms could optimize the number and locations of vehicles in the fleet to accommodate consumer demand for Uber’s car rides, it was only a matter of time before competitors figured out how to do the same thing.

Following Uber’s lead, there have been literally dozens of start-up enterprises — Bridj, which has started service in the Washington region, is the one I featured recently on the blog — that provide flexible new transportation services. To quote Jaffe:

Commuter buses like Leap Transit or Chariot in San Francisco or Bridj in Boston (and now Washington). Dynamic vanpools like Via in New York. Carpool start-ups like Carma. True cab-share options like UberPool (now claiming millions of trips) or LyftLine (now with fixed-point pick-ups). Company and housing shuttles like the Google bus belong in the mix, too.

What you might not appreciate is just how crowded this microtransit space has become. The start-up platform Angel List’s “public transportation” page, currently with 177 projects, seems to grow daily. Its general “transportation” page lists more than 1,000 ventures, and some services like Uber that insist on being labeled “technology.” Plenty of local entrepreneurs don’t bother with the list at all (like a new Omaha bar shuttle). One company, TransLoc, is even building an entire flex-transit platform to help public agencies to join the fray.

Jaffe describes three ways in which microtransit might be a good thing for the world. These fleets of networked cars, vans, minibuses and other vehicles might lure people out of the single-occupancy vehicles. They might identify and serve new niches markets of under-served populations. And they might function as feeders to existing mass transit enterprises, bolstering passenger volume and revenue.

Alternatively, suggests Jaffe, microtransit might not be so good. It might compete with mass transit, “poaching” bus and rail riders in dense transit corridors, requiring more public funding to keep the mass-transit enterprises afloat. While microtransit undoubtedly would take automobiles off the road, microtransit vehicles would be running non-stop — conceivably generating more Vehicle Miles Traveled. Finally, microtransit might “drift into the sort of exclusivity that violates public transit’s equity mission.”

Bacon’s bottom line: Anyone interested in the future of transportation should read Jaffe’s piece. It provides a cogent summary of key issues surrounding microtransit. However, I beg to differ on a couple of key points.

First, an omission from Jaffe’s list: We may not know whether microtransit will result in more or fewer Vehicle Miles Driven, but the phenomenon almost certainly will require fewer cars to deliver the same amount of miles traveled. Fewer idle cars sitting in parking lots means less space — potentially thousands of acres less — for the storage of cars will be required. Anything that allows the nation to recycle parking lots into economically valuable property will stimulate urban economies across the country.

Second, I don’t worry about a move to “exclusivity.” The momentum is in exactly the opposite direction. Uber started out providing a luxury ride service, competing with limousines as much as taxicabs. The company has moved decisively toward the mass market. And if Uber doesn’t make the jump to less affluent riders, others will. In business revolutions like this, start-ups almost always target the most lucrative market slices first — they go for the biggest, fattest profits they can get while they can get it. As long as there are low barriers to entry, as in the case of microtransit, the upscale markets quickly get saturated and businesses migrate to under-served market segments.

My prediction: It is only a matter of years before microtransit begins providing vastly superior transportation services to the poor, as measured by cost of service and flexibility of routes, than they are getting from many municipal bus companies. Public mass transit will bleed customers and face an existential threat. Many will not survive. But the riding public will be better off.

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?

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.

Solid Coverage of the U.S. 460 Fiasco. But the EPA Travesty? …. Chirp. Chirp.

crickettsThe Virginia Department of Transportation has canceled its contract with US 460 Mobility Partners to build the U.S. 460 Connector between Petersburg and Suffolk, Transportation Secretary Aubrey Layne announced Wednesday. The action paves the way for initiating legal action to recover $252 million paid to the public-private partnership concessionaire for preparation and asset mobilization to start building the highway.

Layne had pulled the plug on the project a year ago when it was evident that the U.S. Army Corps of Engineers might not issue required wetlands permits along the proposed 55-mile route. It’s not clear what recourse the McAuliffe administration has to recover payments provided for under a contract negotiated and signed by the McDonnell administration. There is no evidence that U.S. Mobility Partners has done anything wrong (other than negotiate a highly favorable contract). Still, it’s worth the effort. Even recovering half the sum would be a big benefit to taxpayers.

Now… If only the McAuliffe administration would try to recover money from the Environmental Protection Agency for mandating hundreds of millions of dollars in upgrades to coal-fired power plants to reduce toxic emissions like mercury and sulfur dioxide — only to turn around and issue another set of regulations a few years later, the Clean Power Plan, that will effectively force Dominion to shut down three of the four coal plants it just upgraded.

Governor Terry McAuliffe did protect ratepayers from that fiasco, which would have cost Virginia ratepayers some $1.6 billion or more, assuming the facilities were shut down within five years — by getting Dominion to eat the costs instead. In exchange, however, in a legislative deal carved out earlier this year, Dominion gets to freeze its base rates for five years. Some observers characterize that concession as a give-away to Dominion (although Dominion strenuously disagrees).

While the U.S. 460 fiasco rightfully generated a slew of in-depth newspaper reports, the EPA fiasco made one brief blip in the news cycle and then disappeared. The media has made no comparable effort to examine the issue, much less to hold the EPA accountable for the absurdity of enacting regulations that will likely force Dominion (and other electric companies with coal plants) to shut down investments that the agency had required just a few years previously. If Dominion had been ripping off ratepayers to the tune of $1.6 billion, I suspect we’d be hearing about it. But when the EPA is doing the gouging… all I hear is crickets chirping.

– JAB