Tag Archives: James A. Bacon

Mamas, Don’t Let Your Daughters Grow up To Be Co-Eds

Phi Kappa Psi fraternity house at UVa.

Phi Kappa Psi fraternity house at UVa.

When I visited Virginia Tech a few weeks ago, the lead story in the campus newspaper was a take-out on the supposed “campus rape culture.” The number is widely touted that 20% of women are the victims of sexual assault while at campus. My instinct is to dismiss that figure as a figment of the feminist fringe, in which transgressions of any kind, from unwanted touching to real rape, are conflated as “sexual violence.” Many incidents are fueled by the combustible combination of rampant drunkenness and the casual sex of the hook-up culture, in which all normal standards of behavior are obliterated.

That said, rape that everyone recognizes as rape does occur. One such incident, which allegedly occurred at the University of Virginia, is profiled in Rolling Stone. The story of a first year student gang raped in the Phi Kappa Psi fraternity house, if accurate, is absolutely horrifying. What allegedly followed (or didn’t follow) is a travesty. Writes author Sabrina Rubin Erdely:

At UVA, rapes are kept quiet, both by students – who brush off sexual assaults as regrettable but inevitable casualties of their cherished party culture – and by an administration that critics say is less concerned with protecting students than it is with protecting its own reputation from scandal. Some UVA women, so sickened by the university’s culture of hidden sexual violence, have taken to calling it “UVrApe.”

Maybe that’s a fair take on what’s happening at UVa and other colleges, maybe it’s not. There are a lot of conservatives like me whom, I suspect, get turned off by the blather associating campus sexual violence with “patriarchal attitudes” and other such nonsense, as if society ever condoned rape as a “boys will be boys” thing to be swept under the rug. It was social conservatives, after all, who warned that the mixing of genders in college dormitories, the relaxation of visitation rules and the collapse of traditional moral values would lead to precisely the phenomenon we’re discussing today. Such fears were dismissed at the time, of course, as the hilariously antiquated thinking of prissy, tea-sipping old bitties.

But here we are. Feminists have discovered a “culture of rape” in what are arguably the most thoroughly enlightened and liberal institutions in the entire country, our colleges and universities. While I don’t think the Rolling Stone article has captured the entire truth of what’s happening on college campuses, I think it has captured part of the truth. And even that partial truth is ugly enough to take very seriously.

I would ask Virginia newspapers, why did Rolling Stone break this story, not you? If there is a campus rape epidemic on college campuses, are you going to continue to ignore it, highlighting only the cable news spectacles, like that of missing UVa student Hannah Graham, that are unrepresentative of the college experience? Conversely, if there’s not a campus rape epidemic, are you going to ignore that story, too? If the whole problem is wildly exaggerated — analogous, say, to the satanism scare of a couple decades ago — worried parents of college co-eds would like to know.

My suspicion is that there is a widespread problem but that it’s not as white-and-black as portrayed. College kids are… how shall I put this politely…. incredibly horny. The old social mores that held horniness in check have been obliterated. Concentrate thousands of males and females of the same age in a college campus, tear down the moral inhibitions against promiscuous sexuality, and dissolve inhibitions and judgment in a haze of alcohol, and you’re going to have a lot of sexual encounters, some percentage of which, in retrospect, are worthy of criminal punishment and some percentage of which participants simply regret. There is a cultural problem here. It’s not one of oppressive “patriarchy.” But it’s very real.

(Hat tip: The Nutshell by Frank Muraca. Check out Frank’s newsletter — it’s a short but punchy round-up of Virginia news, well worth reading.)

Racial Disparities in SOL Pass Rates Getting Worse

Bacon’s Rebellionmath_data
More SOL data from Lynchburg numbers cruncher Jim Weigand… The chart above expresses the Standards of Learning (SOL) pass rate for blacks and Hispanics as a percentage of the pass rate for whites between 2005 and 2014. The good news is that blacks and Hispanics consistently improved their educational performance through 2010, with Hispanics passing at 90% of the rate as whites in that year.

Then something happened. Minority SOL pass rates tanked. White pass rates declined (a trend not reflected in these charts) but minority pass rates fell even steeper. What happened in that period? Weigand notes that downturn coincides with tighter standards for the math SOLs  in 2012 and for the English SOLs in 2013. The impact of more demanding math tests can be seen in this chart:

SOL_data

 

Virginia school systems have made tremendous efforts to help minority students reach educational parity with whites (and Asians, who out-perform whites). But these charts call into question the effectiveness of those efforts.

If the tests were harder, then why weren’t all groups effected equally? Why did black and Hispanic scores decline relative to white scores? One possible explanation is that minority students are enrolled disproportionately in classes that “teach to the test.” Teachers in these classes got better at instructing their students to answer the kinds of questions that appear in SOL tests. (An analogy: My son is taking an AP course that explicitly, no-bones-about-it, is geared to helping students answer the kinds of questions that appear in AP tests.) But teaching to the test has a big drawback. Make the test tougher, and it doesn’t work.

Just a theory. It doesn’t fit the data perfectly. Perhaps readers can help me refine the theory or present better ones of their own.

Update: At the suggestion of Don Rippert, Jim Wiegand portrayed the same data as the chart above in a different way. Here’s the raw data for each ethnic/racial group, not normalized to whites as above. This shows clearly that whites suffered a decline in SOL pass rates, too.

SOL_pass_rates

Update: These numbers may be skewed by changes in Department of Education questionnaires that allowed students to select more than one race, says Hamilton Lombard with the Tayloe Murphy Center for Public Policy. As a result, for instance, the number of students identifying only as black dropped by 20% to 30% in some divisions. “With the changes, the SOL results by race are really for different populations in 2010 and 2012,” he writes.

– JAB

Proposed CO2 Regs Will Harm Virginia’s Economic Competitiveness

Image credit: Department of Environmental Quality

Image credit: Department of Environmental Quality

by James A. Bacon

Proposed federal regulations to cut future carbon dioxide emissions from electric power plants would put Virginia at a significant competitive advantage by giving the state no credit for its progress in reducing CO2 over the past ten years, asserts the state Department of Environmental Quality (DEQ) in a letter response to the Environmental Protection Agency (EPA).

Even back in 2005, Virginia power plants emitted less CO2, a greenhouse gas, per unit of energy produced than those of other many states, thanks to the state’s reliance upon nuclear power. Since 2005, Virginia power companies have phased out older coal-fired plants and substituted natural gas. Although natural gas is a fossil fuel that emits CO2, it is much cleaner burning than coal and produces less CO2 per unit of energy.

In 2005, coal accounted for 46% of Virginia’s electric generation; by 2012, coal had fallen to 20%.  Virginia reduced carbon “pollution” by 39% between 2005 and 2012, the seventh best performance nationally. In 2012 Virginia ranked 15th among the 50 states for the rate of carbon “pollution” from all electric generating sources.

Rather than credit Virginia for recent progress or how much citizens spent to get there, argues the DEQ letter, the EPA Proposed Emission Guidelines bases its performance targets on a state’s electric generating system as it exists now. States the letter:

EPA’s approach fails to recognize the achievements made by many states, including Virginia, that have reduced CO2 emissions by making significant investments in zero and low carbon emitting generation, such as nuclear power, and rewards states that have not done so by giving them substantially higher CO2 emission reduction targets.

carbon_goals

Source: Division of Environmental Quality

All of Virginia’s neighboring states have electric generating systems that are more carbon-intensive than Virginia’s, but all have emission rate goals substantially higher than Virginia’s final goal of 810 [pounds per Megawatt house]. In fact, the Proposed Emission Guidelines would require greater reductions in megawatt hours or carbon intensity from affected units in Virginia than from similar units in either Kentucky of West Virginia, even though those states generated approximately twice the amount of electricity on a megawatt hour basis from fossil fuel than did Virginia in 2012.

“The disparity in state goals,” writes the DEQ, “leaves Virginia at a competitive disadvantage to its neighbors and numerous other states because they will be able to comply with the Proposed Emission Guidelines more cost effectively. … Such states could use their competitive advantage over Virginia to keep their state electric rates or taxes relatively lower in order to lure away existing Virginia businesses and render Virginia less competitive in the quest for new business.”

Governor Terry McAuliffe says he supports the EPA’s goal of reducing carbon emissions to combat global warming. But he says the proposed regulations could be “more equitable,” according to the Times-Dispatch.

Bacon’s bottom line:  Not only are onerous new environmental regulations being imposed by executive fiat, not based upon anything contemplated by Congress when it enacted the Clean Air Act… Not only are these regulations being enacted  on the basis of claims that runaway global warming (a) is occurring, (b) will prove to be an unmitigated catastrophe and (c) that re-engineering the U.S. economy by reducing CO2 emissions is the best way to deal with it… but the state-by-state implementation of the regulations will punish Virginia for its previous efforts to be environmentally virtuous.

Virginia, like the United States, faces many environmental challenges. As a society, I believe, we should steadily increase our investment in environmental protection. But we also need to prioritize that investment to accomplish the most good per dollar spent. I’m far from convinced that spending billions of dollars — the proposed EPA regs could cost Virginians an estimated $5 billion — will generate anything tangible for Virginia or its environment. If these regulations go through, they will be a tragedy of the first order.

More Money for Millionaires

by James A. Bacon

Here’s one way to look at it: If the commonwealth is going to shower millions of dollars in tax credits and grants to multimillionaires for making movies in Virginia, it might as well give it to Virginia multimillionaires. At least that keeps the money in the state!

According to the Times-Dispatch, the state gave a $200,000 grant and an $800,000 tax credit to the production company that filmed “Field of Lost Shoes” about the Civil War battle of New Market in which VMI cadets helped defeat a Union army. The company is owned by Thomas Farrell II, CEO of Dominion Resources, who co-wrote, invested in and raised money for the movie. Farrell’s son, Peter Farrell, a Henrico County delegate to the General Assembly, also was an investor, co-producer and actor in the movie.

If the state is going to shell out that kind of money to lure film production to Virginia — the independent film company spent nearly $4 million in “qualified expenses” on the project — why give it all away to the likes of multibillionaire Steven Spielberg, who filmed “Lincoln” in the Old Dominion? Share the wealth, baby!

Of course, I’m being totally facetious. The state has no business subsidizing film production for anyone — Virginian or non-Virginian; millionaire, billionaire or pauper — any more than it has subsidizing painters, fiction writers, graphic novelists, musicians, bloggers or any other artist.  Welfare (or incentives, whatever you want to call it) for millionaires is not justifiable in anybody’s moral framework.

The point of the film tax program is to encourage economic activity — film production — in Virginia that wouldn’t take place here otherwise. Did giving Farrell’s production company $1 million induce him to film in Virginia as opposed to somewhere else? Where else was Farrell, a University of Virginia grad, going to film a movie about VMI and a battle fought in the Shenandoah Valley? Kentucky? Southern California?

This is one more instance of Virginia’s political class picking the pockets of taxpayers and redistributing it to the wealthy and politically connected. Republicans, who increased this particular subsidy under the McDonnell administration, are blocking the expansion of Medicaid on the grounds that we can’t afford it (which we can’t). But they’re OK with subsidizing a millionaire’s personal artistic passion? Shame! Shame!

While I deplore the tax breaks, I have to say, the movie trailer looks pretty good. The Farrells lined up some serious B-List talent — Jason Isaacs, Tom Skerritt, David Arquette — and the acting and production values come across as very professional. I hope the movie is a financial success. If it is, maybe Tom Farrell will film more stories from Virginia history… without the benefit of tax breaks.

Optimism Bias and Risk in Public Private Partnerships

The tolling technology is better than ever -- but traffic forecasts are a disaster.

The tolling technology is better than ever — but traffic forecasts are a disaster.

by James A. Bacon

Randy Salzman, a free-lance Charlottesville writer, has spent the last couple of years trying to understand how Public Private Partnerships (P3s) work in Virginia. If the private sector is supposed to be so much more efficient than government, he asks, how  come so many big P3 transportation projects in Virginia and across the nation have gone bankrupt? Why do private sector companies continue investing in similar projects despite the obvious risk? And what exposure do taxpayers when deals go bad? He doesn’t have any definitive answers, but he lays out a lot of good questions in the latest issue of Style Weekly.

Salz, an occasional contributor to Bacon’s Rebellion, gets closest to the truth when he mentions the “optimism bias” in traffic forecasts. In project after project across the country, private P3 companies and  their government partners have over-estimated traffic volumes on the roads they build. Writes Salz:

One study found that the projections tended to be 109 percent more than actual traffic — or more than double — and that nowhere in completed American P3s have actual traffic and toll income come close to projections.

Here in Virginia, flawed traffic forecasts were at the root of the Pocahontas Parkway debacle in eastern Henrico County and, if I’m not mistaken, the Dulles Greenway bankruptcy in Loudoun County (although that was not a P3 project). And there’s a very good chance that the Capital Beltway Express’s Northern Virginia HOT lanes project will experience a similar fate.

I think there are two things going on here. First, the private sector’s flawed traffic project models paralleled flawed public sector models. Everybody in the transportation business extrapolated the growth trends of the ’60s, 70s, ’80s and ’90s indefinitely into the future. I warned a decade ago that that was folly, but not many people listened. Reality set in in the mid-2000s when growth rates started tapering off and during the 2007-2008 recession, when traffic volume actually declined. The reasons are many and complex, as I have enumerated ad nauseum on this blog, but they are fundamental and lasting, not just a blip. We will not in our lifetimes return to the traffic-volume growth rates experienced during the post-World War II era.

The forecasts of traffic volume and associated toll revenues for the P3 projects were predicated on the assumption, now revealed to have been astonishingly naive, that traffic volume would increase on the same trajectory pretty much forever. That’s why the bankruptcies ensued, and why there will be more to come.

If experience tells us anything, the private sector will figure that out before the public sector does. As Salz quotes Lane Construction as saying in regard to proposed Interstate 66 toll lanes near Washington: Traffic projections have an “optimism bias.” Which brings us to the second reason for the wave of bad deals. Once someone, whether a private investor or a government agency, invests hundreds or thousands of man hours in analyzing a project, they get personally invested. No one likes to pull the plug. They want to see the project move forward. They tend to adopt assumptions that will make the project look more viable in order to obtain the financing needed to move it from paper to reality. This bias is so endemic in all types of projects that we can almost call it a part of human nature.

The private sector has built-in bullshit detectors. They’re called investors and bond holders. Investors want to generate a positive risk-adjusted return on investment. Bond-holders want to get their money back, plus interest. They may rely upon flawed traffic projects that no one questions, but they don’t suffer from the optimism bias of the project sponsors. They are naturally skeptical and have an interest in asking tough questions. Now, these investors and bond holders aren’t infallible by any means. They make bad investments, too. But they demand a higher standard of certainty than, say, politicians who want the glory of building a road but won’t be around to take the blame if the project falls apart.

Every toll-backed P3 project sells bonds to investors. How, then, did so many go wrong? The key is to look at how the public partner biased the outcome through subsidies and loan guarantees. Every big P3 project applies for financing from the federal Transportation Infrastructure Finance and Innovation Act (TIFIA). These federally guaranteed loans create a tranche of subordinated debt that creates a layer of protection for private bond holders. In other words, if Project A experiences a revenue shortfall, what revenues it does produce will go to bond holders first. Here’s how the Federal Highway Administration describes it: “The TIFIA lien on project revenues may be subordinated to those of senior lenders except in the case of bankruptcy, insolvency, or liquidation of the obligor.”

This layer of protection significantly reduces the risk for senior bond holders, who then demand fewer assurances than they would otherwise before purchasing the bonds. In Virginia, the commonwealth has reduced project risk by making significant cash contributions as well. Most of the P3 projects set up in Virginia in recent years have used some combination of TIFIA funding and public subsidies to make the projects work. Without these contributions, the perceived risk would have been far higher, and the chances of getting pure private financing would have been much diminished. It’s fair to say that many, if not most, of the deals never would have happened.

Combine these three factors — highly flawed long-term traffic projections embraced by the public and private sectors both, the optimism bias for specific projects, and the diminution of risk through TIFIA financing and public subsidies — and we can explain a lot of went wrong. That’s not an exhaustive list of explanations but it accounts for a lot. Continue reading

The Statewide Implications of the Vihstadt Election

Vihstadt interacts with supporters. Photo credit: ARL Now

Vihstadt interacts with supporters. Photo credit: ARL Now

by James A. Bacon

The election of John Vihstadt to the Arlington County Board in the general election last week, which has gotten very little play downstate, is rocking the Democratic political establishment in Virginia’s most liberal jurisdiction. Electorally speaking, Arlington is bluer than the sky on a clear October day — Obama won 69% of the vote in 2012, Romney 29% — yet citizens have had it up to their eyeballs with gold-plated spending schemes.

Arlington has done a superb job in managing transportation and land use, with the result that it enjoys the best of both worlds: a relatively low tax rate and a bountiful flow of tax dollars into the treasury. The county’s liberal Democratic majority deserve credit for having stuck consistently to their Smart Growth development strategy for decades and for doing an excellent job on execution.

But liberal Democrats do love to spend money, and a series of controversies over $1 million bus stops, an $80 million aquatics center, a $1.6 million dog park and a $350 million streetcar project has a lot of citizens up in arms.

Vihstadt, a Republican-turned-independent, won a special election in April, campaigning against the streetcar project as his signature issue. He won re-election last week with nearly 56% of the vote, making him the first non-Democrat to win a general election since 1983. It’s not as if the Dems didn’t turn out for the election — Arlington voters backed Senator Mark Warner with more than 70% of the vote.

County Board member Libby Garvey, a Democrat, has joined Vihstadt in opposing the controversial project in the five-person board. Now some observers are saying that the three pro-streetcar board members, two of whom stand for re-election next year, are on the hot spot.

The punditocracy has devoted considerable ink to the divining the extent to which the 2014 elections were a genuine Republican “wave” or a reflection of the fact that core Democratic constituencies don’t turn out in off-year elections. Vihstadt’s victory is indicative that something deeper than voter turnout or a new-found love of Republicans lies at the root of the election results. Democratic turnout was not an issue in Arlington’s local election — almost everyone’s a Democrat to begin with. But it seems clear that even some Democrats are uneasy with what is perceived to be runaway spending.

Not everyone sees it the way I do. Robert Parry, a former investigative reporter for the Associated Press and Newsweek, sees the vote as a triumph of the liberals’ all-purpose bogeyman — racism! As Parry observes in a recent column, white Arlingtonians don’t think of themselves as racist. But how else does one explain voter rejection of a streetcar that would provide transportation services to the county’s black community, which has been victimized by slavery… Jim Crow… residential discrimination… income disparities, etc., etc.

“Tea Party-style politicians have learned that — whatever the reality — they can exploit the Old Confederacy’s subterranean racial divisions for political gain,” writes Parry. “As we’ve seen in Arlington County, the strategy works not only in the rural Deep South but in relatively sophisticated communities in Northern Virginia.”

Talk about denial — Arlingtonians may be the most affluent, educated and liberal electorate in Virginia but they are closet racists who were duped by the Tea Party!

Sometimes opposition to big spending is simply… opposition to big spending. Republicans and independents may be greed-heads who selfishly want to spend their own money themselves rather than handing it over to politicians to spend it for them. But even some idealistic Democrats realize that if the United States is to preserve the welfare state, the country, the state and the county can’t afford to run out of money because they frittered it away on wasteful projects.

Other politicians with big spending plans should pay heed. Republican Virginia Beach Mayor Will Sessoms — are you paying attention? Democratic Richmond Mayor Dwight Jones — how about you?

Debt and Deferred Maintenance at Virginia Colleges

debt-revenue

by James A. Bacon

Above, readers will find the chart I called for in yesterdays blog post: the debt burden of Virginia colleges and universities as a percentage of their budgeted revenues. The higher the debt-to-revenue ratio, the more leveraged the institution and, hence, the greater the risk of financial difficulties if and when student enrollments decline. This chart is useful because it suggests that we should start paying closer attention to Christopher Newport University and the University of Mary Washington, both of which have borrowed heavily to fund their building expansions.

Having a high debt/revenue ratio is not necessarily a worrisome sign. The University of Virginia also appears to have borrowed heavily, but (a) it has a multi-billion dollar endowment and a wealthy alumni base to fall back upon in times of trouble, and (b) there is such a high demand to attend the university that there is a negligible chance that it will see an involuntary decline in enrollment. By contrast, Norfolk State University, in the news recently for its eroding financial condition, has a modest debt load. Still, all other things being equal, a high debt-to-revenue ratio puts an institution at greater financial risk.

The debt figures, by the way, I took from the Joint Legislative Audit and Review Commission’s latest report on higher education. The figure denotes the outstanding principal and interest payments due over the next thirty years (FY 2014 to FY 2043). The revenue numbers come from the Virginia state budget “operating budget summary” combining both General Fund and Nongeneral Fund revenues.

Virginia State University and Norfolk State University are widely reported to be experiencing major financial difficulties, in large part reflecting their status as Historically Black Colleges and Universities fifty years after the formal end of racial segregation in America and the lower incomes of their student populations.

But, as Bacon’s Rebellion has been warning and the JLARC report confirms, rising tuition, fees and other expenses are outpacing the ability of students and their families to pay for colleges across the board, with the result that enrollment in Virginia colleges and universities declined last year. Declining enrollment translates into falling revenue, which can be especially devastating to institutions with high debt burdens.

My analysis suggests that Christopher Newport and Mary Washington, the two most highly leveraged public higher ed institutions in the state, could be among the most vulnerable. Neither is a prestige institution with strong pricing power and a large backlog of students clamoring to get in. In a positive sign, however, Christopher Newport’s enrollment did increase by 75 FTE students in 2013-2014 compared to the year before, according to State Council for Higher Education in Virginia data. On the other hand, Mary Washington’s enrollment declined by 138. I don’t want to make too much of one year’s enrollment data but if I were a board trustee at Mary Washington, I’d set a very high hurdle for any additional borrowing.

By contrast, Radford University serves a similar market niche, as a small/medium-sized liberal arts university appealing mainly to in-state students. Radford’s board has kept a very tight lid on debt, and the institution has the lowest debt/revenue ratio of all the colleges.

One more factor should should be considered in our analysis — deferred maintenance. Christopher Newport’s campus is so new that it has a negligible deferred maintenance backlog — about $0.5 million, according to JLARC. That contrasts to Virginia Tech’s $274.5 million backlog, the largest of any higher ed institution in Virginia. In theory, Christopher Newport won’t have major maintenance issues until it has paid off most of its 30-year debt. Mary Washington, by contrast, has racked up $42.5 million in deferred maintenance.

Deferred maintenance, Virginia public four-year institutions. Table credit: JLARC

Deferred maintenance, Virginia public four-year institutions. Table credit: JLARC

Virginia’s College Spending Binge

Higher education spending per student at Virginia public universities compared to regional and national averages. Graphic credit:  JLARC

Higher education spending per student at Virginia public universities compared to regional and national averages. Graphic credit: JLARC

by James A. Bacon

Great minds think alike. The wonks at the Joint Legislative Audit and Review Commission (JLARC) apparently have been obsessing over the issue of college overindebtedness, just as I have here at Bacon’s Rebellion. In its newly issued report, “Addressing the Cost of Public Higher Education in Virginia,” JLARC has found that Virginia’s public colleges and universities have far outspent their peers nationally and regionally on buildings and other capital projects, with the result that they are saddled with major debt and interest payments.

“Total debt service for the state’s 15 four-year public institutions grew from $106.2 million in FY 2002 to $421.4 million in FY 2013,” writes JLARC in its executive summary. “Debt service on this institutional debt is equivalent to nine percent of E&G (Education & General) spending by the four-year public institutions in Virginia.”

Last year, Virginia spent almost $2,872 per student on capital projects more than twice the national average of $1,353. In FY 2009, Virginia institutions spent more than three times the national average. As JLARC observes, this spending occurred despite declines in state support and despite the increasing inability of students to afford higher education.

Meanwhile existing facilities have deteriorated. “As of FY 2011, the total deferred maintenance on E&G facilities was estimated at $1.4 billion, or approximately 19 percent of the replacement value of Virginia’s higher education E&G. … National research has found that every $1 of deferred maintenance results in $4 to $5 in long-term capital liabilities.”

Bacon’s bottom line: Building great facilities certainly adds to the allure of Virginia institutions. Handsome facilities are highly visible to prospect faculty and students, while deferred maintenance and other issues go unnoticed. And, as Peter G. observes in a post below, the impact on urban redevelopment can be striking. The City of Richmond has benefited enormously from the capital spending boom at Virginia Commonwealth University.

Indebtedness and leveraged balance sheets can work for enterprises when the market is expanding and new revenues can cover the cost. But it’s a recipe for disaster if the market tops out or, God forbid, enrollments start to shrink — as is actually happening in Virginia today. Colleges and universities cannot prune their debt burden without defaulting, an act that would effectively sign an institution’s debt warrant. System-wide, $400 million in annual debt service is baked into the cost structure. If higher ed institutions have to start cutting, that’s a big chunk that cannot be touched. Other line items must suffer all the more.

JLARC could have added considerable value to an already valuable report by compiling total indebtedness and debt-to-revenue ratios at each of Virginia’s 15 higher ed institutions. It would be nice to have some advance warning of which institutions are especially at risk. Who knows, maybe such data would encourage asleep-at-the-switch trustees on university boards to start asking tougher questions.

Chart of the Day: Whom to Blame for Tuition Increases?

Statewide tuition increases at Virginia public universities, FY 1998 to FY 2012. Image credit: JLARC

Statewide tuition increases at Virginia public universities, adjusted for inflation, FY 1998 to FY 2012. Image credit: JLARC

At last, an answer to a question that I have frequently posed on this blog: To what extent can tuition increases at Virginia public universities be blamed on a decline in state support for higher education? According to a new analysis by the Joint Legislative Audit and Review Commission (JLARC): about 68%.

The decline in state support doe not account, however, for the surge in student fees, which cover athletics and ancillary programs, or room and board. How much did declining state support account for the total cost of a residential college education? JLARC didn’t ask that question, but a reasonable estimate is about half.

Bacon’s bottom line: Colleges and universities have a legitimate point when they blame the escalating cost of higher education on lower state support. But they also should shoulder as much of the blame themselves, something they have been exceedingly reluctant to do.

Richmond EDA Needs to Open up the Books

Major Dwight Jones (left) and Governor Terry McAuliffe. The commonwealth donated $5 million to the project.

Meanwhile, in the City of Richmond… The Economic Development Authority is ducking transparency in the $74 million Stone Brewing project, a major economic development coup for the city and the state. At issue is the role of the Richmond EDA, which is helping to finance construction of the brewery and related restaurant. On Oct. 22, the EDA picked Hourigan Construction from a field of six contractors.

EDA officials won’t say if Hourigan submitted the lowest bid, on the grounds that the final contract has not been signed yet. Another key question is who Hourigan’s subcontractors are. As Graham Moomaw reports for the Times-Dispatch, the EDA considers not only price but its track record of delivering projects on time and its ability to meet a target of using minority-owned businesses for subcontracts.

The Dwight Jones administration has aggressively pushed economic development such as the Shockoe Slip ballpark, Boulevard redevelopment and the Washington Redskins training camp, in which the city plays a prominent role in financing. Unlike entirely privately financed deals, projects funneled through the EDA are subject to the minority set-aside requirement.

Writes Paul Goldman, a Richmond political activist in a recent email missive:

The EDA is being used for one reason in the Brewery deal: to get around city and state law [that] mandates the use of an open, transparent bid process creating a level playing field and insuring the best result for the city’s taxpayers.

The key to this backroom deal, as the others, is the special “wink, wink” for political influence peddlers and their cronies.

Are buddies of the mayor getting special treatment? Who knows. But that’s the suspicion when city government takes an active role in the financing of economic development projects. Let me be clear: There is no evidence of any wrong-doing. But “trust me” just doesn’t work in this day and age. The public would like assurances that there’s no hanky-panky. Open up the books, please.

– JAB