Tag Archives: James A. Bacon

Beware the Bonds

junk_bondsSweet Briar College had many problems, most notably a high tuition and shrinking enrollment, but the kiss of death was a high debt load. The small women’s college, which announced its intention to close earlier this year, had issued millions of dollars in bonds to pay for such projects as a Village Green that provided eco-friendly residential facilities. The announced closure of the college may have been accelerated by a potential default on $25 million in two outstanding bond issues, reports the News & Advance.

The warning bells had been sounding for more than ten years. But in 20o8 the board of directors approved an $11 million bond issue to build the $3 million Village Green as  well as a new fitness and athletics center.

Last November, S&P  revised its outlook on the BBB rating of the college’s 2006 bond issue from stable to negative. “The negative outlook was a result of numerous factors, including Sweet Briar’s enrollment challenges and high tuition discount rate,” wrote reporter Sherese Gore. “S&P warned of a potential lowering of its rating on the 2006 bonds during the two-year outlook period if there were further declines in enrollment and increased operating deficits.”

Bacon’s bottom line: The big question that bond rating agencies are asking about college finances these days is how well are student enrollments holding up? For most colleges and universities, tuition and fees paid by students is the dominant source of revenue. The cost has gotten so high that many families are balking, and enrollments are eroding at many institutions. The loss of revenue is all the more acute for colleges that have loaded up on debt. The obligation to hold debt obligations sacrosanct accentuates budget cuts to programs. If the quality of education or the residential experience is compromised, colleges run the risk of further enrollment declines, setting off a vicious cycle.

The United States hasn’t appeared to have learned anything from the 2007 real estate crash, which was driven by excessive indebtedness. Federal government borrowing has reached record levels, both in absolute numbers and as a percentage of the GDP. Exploiting near-zero interest rates, businesses are leveraging their balance sheets, taking on debt to increase their return-on-equity numbers while using cash flow to purchase shares. Even households, chastened by the recession and real estate crash, are beginning to take on more debt, although they haven’t matched the excesses of the 2000s. Scarily, China, Japan, France, Spain, Italy and other major economies have been every bit as undisciplined as the U.S. There will be a global debt reckoning.

There is no way of knowing when that day will come. But when it does, the fear-of-debt contagion will spread with frightening rapidity as confidence unravels, transmitted through the international economy in ways that no one today can predict. Survivors of the shake-out will be those who maintain tight financial discipline. For those of us concerned about public policy, that means paying close attention to the finances of state and local governments, industrial development authorities and colleges and universities.

– JAB

Big Data: the New Wave of Wealth Creation

apt

by James A. Bacon

We’ve all been hearing more and more about “Big Data,” which arises from the ability of computers to collect and process unimaginably huge gobs of data and sophisticated mathematical equations to detect patterns and anomalies that can be used to drive business decision-making. Capital One used Big Data before it had a name to revolutionize the credit card business, and it’s one of the biggest, most profitable companies in Virginia. Now comes Arlington-based Applied Predictive Technologies, which just sold out to MasterCard for $600 million.

That’s a remarkable valuation for a 16-year-old company of 300 employees and revenues approaching $100 million. Humongous pay-offs like that are routine for Silicon Valley but they’re rare in Virginia.

“We will stay Ballston-based, but we will be growing faster,” APT chief executive Anthony Bruce told the Washington Post in an email. “Our opportunity to grow and expand will be accelerated by this partnership, in Arlington and elsewhere.”

Here’s how the company describes its product: “APT’s Test & Learn software is revolutionizing the way leading companies harness their Big Data to accurately measure the profit impact of pricing, marketing, merchandising, operations, and capital initiatives, tailoring investments in these areas to maximize ROI.”

An illustration can be seen in the graphic above. Drawing from data on retail and restaurant sales at more than 100,000 locations nationwide, APT charted the impact of the 2015 NCAA Final Four basketball tournament on restaurant sales in Indianapolis. The APT Index also integrates weather and demographic data to allow retail executives to ask an even broader range of questions. It doesn’t take much imagination to see how MasterCard could use its relationship with retailers globally to sell this as a value-added product.

Read “Data Crush” by Chris Surdak to get a feel for how Big Data will transform industry after industry in ways we mortals can barely comprehend. Big Data will blaze a path of creative destruction easily equal to that of the Internet.

Bacon’s bottom line: Momma, don’t let your babies grow up to be lawyers. Engineers and computer programmers will make a decent living in the economy of the early-mid 21st century, but if you want your kid to have a shot at becoming the next Steve Jobs or Bill Gates, tell them to major in any branch of mathematics that lends itself to Big Data analytics.

If you want an argument in favor of STEM education (the “m” stands for mathematics), this is it. The Big Data revolution may have started in the United States, but the industry will move to wherever there are pools of mathematically gifted employees. We neglect mathematical instruction at our peril. (So says the guy who couldn’t tell you the difference between sines, cosines and tangents, much less between integral and differential calculus, much less actually compute anything requiring a retention of anything beyond 8th-grade algebra. I’m a dinosaur but at least I know it.)

Keeping the Spirit of the Constitution Alive

Rob Peck teaches advanced placement U.S. government class at Douglas Freeman. Photo credit: Richmond Times-Dispatch.

Rob Peck teaches advanced placement U.S. government class at Douglas Freeman. Photo credit: Richmond Times-Dispatch.

Kudos to two Richmond-area schools — the Maggie L. Walker Governor’s School and Douglas S. Freeman High School — for their superb performance at this year’s annual We the People competition. Fifty-six teams that made it through districts and regionals competed in the nationals. Maggie Walker, a perennial powerhouse, scored 2nd while upstart Freeman scored 3rd. Grant High School from Oregon came in 1st.

Four-student teams get a multi-faceted topic relating to the U.S. Constitution that could range from the Dred Scott case to the Magna Carta. After having time for research and analysis, they sit across from three judges who engage in a lively Q&A.

Students spent hundreds of hours prepping for the event. As one participant, Carson Whitehurst, told the Richmond Times-Dispatch: “Read a lot. Specifically, the Constitution, court cases, the Federalist and anti-Federalist papers, and anything we could find from scholars or anything related to our question.”

As late-night show comedians frequently remind us with their laughably sad man-on-the-street interviews, civic ignorance is rampant in the United States. It is reassuring to see that in the state whose leading citizens articulated key Constitutional principles more than 200 years ago — James Madison, George Mason, Thomas Jefferson — at least at least a few young people are learning the philosophical underpinnings of our system of governance.

– JAB

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.

Police, Race and the Media

by James A. Bacon

Before people go into conniptions over the politically incorrect thrust of this column, let me make something Hubble telescope clear: I do not condone police brutality toward African-Americans. When incidents occur like the death of Freddie Gray in police custody in Baltimore, the death of Eric Garner on the streets of New York, and most horrifyingly the execution-style slaying of Michael Slager in Charleston, S.C., the facts need to be gathered and police need to be held to account. Police are human. Some make tragic mistakes. Some are no better than criminals themselves. Bad cops need to be demoted, fired or go to prison. And, yes, black lives do matter. All lives matter.

Nothing controversial about that. But someone has to tell another side of the story — an aspect of the story that has been, and I don’t use this word lightly, suppressed in the mainstream media. The fact is, the police in many inner-city African-American neighborhoods are not working with a docile, law-abiding population. While a majority of citizens are like those who, after the recent riot in Baltimore, showed up the next day to clean up the mess that the lawbreakers had made, or the feisty woman in yellow who bitch-slapped her 16-year-old son for throwing rocks at police, there is a significant hard-core criminal element that regards the police, especially white policemen, as the enemy. These criminals are armed and dangerous, and any encounter between them and the police has the potential to turn violent. It is not without reason that policemen regard every encounter as a possible life-and-death situation and approach it in a state of hyper-vigilance.

Unfortunately, the mainstream media is making matters worse — far worse. This is a country of 320 million people. There are hundreds of thousands, perhaps millions, of encounters every day between police and the African-American population. Most are routine. But now that the Black Lives Matter narrative has taken hold, the media play up a tiny handful of encounters that confirm the narrative of omnipresent racism and ignore anything that might confound it. Thus, in recent months the media have magnified three or four incidents, playing them out in the headlines and news reels over weeks, as if they were somehow typical of the interaction between police and African-Americans.

In doing so, the media feeds the sense of grievance among African-Americans and encourages disruptive behavior like the Ferguson riots, the Baltimore riots and the New York shootings of two police officers. Yes, I blame the media for ignoring context, stoking resentments, and worsening the state of race relations in the United States.

Imagine, if you will, that the media were dominated by conservatives. And imagine that conservatives viewed race relations through the prism of black underclass criminality and violence. And imagine that such a media ran front-page headlines and led off national news broadcasts with stories of white policemen dying at the hands of black criminals, day after day… after day. Then, imagine that such coverage was shorn of any context, that evidence of police brutality and injustice were systematically ignored. That would be a right-wing analogue of what we see now.

Let’s throw out a few facts. Last year, 117 police officers died in the line of duty. Forty-eight were shot and 18 killed in “physical-related incidents,” according to the National Law Enforcement Officers Fund. Another 51,625 were victims of assaults, and 14,857 were injured in assaults. States the NLEOF:

Of the 50 firearms related fatalities in 2014, fifteen officers were shot and killed in ambush attacks, more than any other circumstance of fatal shootings in 2014. Nine officers were killed during disturbance calls. Eight officers were shot and killed during a traffic stop or pursuit and seven officers were killed while investigating suspicious persons or circumstances in 2014.

The NLEOF does not break down the number of police killed by African-American perpetrators, but if the percentage of killings is consistent with the number of crimes committed by African-Americans nationally, there would be enough shootings and ambushes for the media to cherry pick and keep one in the news every day of the year. If the media ran reality through a conservative filter instead of a liberal one, instead of discussing police brutality, we would be discussing the crisis of policemen under siege. But the media isn’t conservative. For the most part, reporters and broadcasters define the problem as poverty and racism, so the context of violence against policemen goes missing.

No one tracks the race of the police assailants, but I would hypothesize — that means I will not state it as fact but offer it as a proposition to be tested with real-world evidence — that a disproportionate number of police assailants are African-American. Why would I advance such a conjecture? Because African-Americans, as a result of their long and tortured history in this country, bear an outsized animus toward the police and other authority figures. Perhaps that animus is justified, perhaps it’s not — that’s a side point that does not change the reality that the animus exists and people act upon it.

An anti-police animus is integral to the sub-culture of gangsta rap, which embraces the term of “Nigga” as an assertive form of self-identification, revels in a hyper-masculine ideal of machismo, debases women as “hoes,” glorifies violence and the gun culture, voices continual defiance against white authority and specifically labels the police as the enemy. (View the YouTube compilation above of gangsta rap songs circulating this February; note the prevalence of guns in the videos and the aggressive, in-your-face style of the rappers.) Latinos have their own narco rap, but there is nothing comparable in the white underclass.

The reality of what’s happening in America’s inner cities is much more complex than the racism-and-poverty model. Insofar as people think of police as an occupying force, they will treat police as an occupying force. They will tend to respond more belligerently to police actions. In turn, police will respond in kind. While they may know that not all young black males are armed and hostile, they cannot know ahead of time who is and who isn’t. Not wanting to become one of those Officers Fund statistics, they will tend to treat every encounter as potentially dangerous, frequently responding more aggressively than they should. I do not say that to condone excessive force but to explain it in the context of a mutually reinforcing pattern of behavior between police and the criminal element.

Perhaps this interpretation puts the onus on police to emphasize community police, building bonds of trust in the inner city. Perhaps it means the police should halt tactics, such as stop-and-frisk, that feed the gangsta-rap narrative of police as occupiers. But this interpretation also undercuts the narrative of African-American hoodlums as victims in which every fatal encounter is presumed to be a reflection of racism. Only if we recognize the complexity of the forces of work can we ever hope to have an honest dialogue about race in America. A media fails to convey this complexity fails at the most elemental level to do its job.

Update: The original version of this post contained lyrics from a rap song. I have been informed that the lyrics were a parody. Accordingly, I have deleted the quote.

Grid Pro Quo

Exhaust fumes blown into a sky.The EPA wants to restructure Virginia’s electric grid. Skeptics argue that slashing CO2 emissions will drive electric bills higher. Environmentalists disagree. Who’s right?

by James A. Bacon

President Barack Obama’s Clean Power Plan gives Virginia fifteen years to cut CO2 emissions by 38% from 2012 levels. Not only will the plan usher in a better world of cleaner air, bountiful “green” jobs and diminished global warming, supporters contend, Virginians will use less electricity and enjoy an 8% reduction in electric bills by 2030.

The State Corporation Commission (SCC) has nothing to say about global warming or green jobs, but the staff has commented upon the Clean Power Plan’s impact on electric bills:  Rates under the plan could be 20% to 22% higher for a typical Dominion Virginia Power customer than under a business-as-usual approach. That’s on top of the 14% that electric rates have increased since 2007, including rate adjustments for lower fuel prices that took effect this month, and it doesn’t include the impact on Appalachian Power or smaller utilities.

Who’s right? Will electric bills go up or down?

What we have here is a battle of dueling experts – Obama’s Environmental Protection Agency (EPA) and its allies in the environmentalist community on the one side, and the state regulatory commission and the electric power industry on the other. Whom do we believe?

It’s hard for citizens to know. The issues are anaesthetizingly complex, and few people have the patience to wade through both sides of the issues. For each assertion that one party makes, someone provides a counter. Peel away one layer of the debate, and there always seems to be another.

That’s why God created Bacon’s Rebellion. My goal in this article is to clearly delineate the main points of contention. You may not change your mind – who ever does? — but at least you will leave with a clearer idea of what the issues are.
Because this piece is so long, I have broken it into digestible chunks. Use these links to navigate the article.

The Clean Power Plan and how it works
McAuliffe administration asks EPA to modify Virginia targets
The SCC response
SELC sides with EPA
Nukes vs. Renewables
Wholesale electricity to the rescue
Energy efficiency to the rescue
How reliable is renewable power?

The Clean Power Plan and how it works

The purpose of the Clean Power Plan is straightforward: It is designed to radically curtail the CO2 emissions blamed for global warming by setting CO2 targets for each state. Nationally, the plan aims to cut CO2 emissions by 30%, but state targets vary widely. Under proposed regulations, Virginia would have to slash 2012-level emissions by 38% by 2030, with a majority of the cuts occurring by 2025.

While the EPA sets targets for each state, it theoretically allows states flexibility as to how they achieve those targets. The agency provides four broad strategies, which, it contends, should achieve the goals at a reasonable cost. States can mix and match as best fits their circumstances. The strategies include:

  • Make coal-fired power plants more efficient. By capturing more heat from coal combustion, coal-fired plants can generate the same amount of energy with fewer CO2 emissions. EPA says that an average “heat rate improvement” of 6% should be achievable.
  • Use more natural gas. Although it is a fossil fuel, natural gas releases less CO2 per unit of energy generated than coal. The EPA expects the biggest reductions to come from switching to this fuel.
  • Use more renewables and nuclear. Solar power, wind power and nuclear power release zero CO2. In the EPA’s estimation, this strategy is second only to natural gas in its potential to cut CO2 emissions.
  • Conserve energy. Investing in energy efficiency reduces the demand for electricity, which means less generating capacity is needed. The EPA says it should be possible to increase demand-side energy efficiency by 1.5% annually.

Continue reading

An Encouraging Response

Tara Adams

Tara Adams. Photo credit: Times-Dispatch.

by James A. Bacon

Last week a brawl broke out in the cafeteria of Varina High School in Henrico County, leading to mayhem and a lockdown of the school. On Sunday, 200 parents, teachers, school officials and some students gathered to discuss how the community can prevent future incidents. I found the comments, as reported by the Richmond Times-Dispatch, to be encouraging. No one blamed the police, or the school system, or poverty, or society at large. The prevailing sentiment seemed to be that parents need to step up and hold their children accountable.

“We’ve just got to do a better job as parents,” said Tyrone E. Nelson, Varina District supervisor. “We have to hold each other accountable when we are dealing with our children.”

“We need parents instead of the police to be the presence,” said Tara Adams, a former president of the PTA. “Stand up. Be adults and be accountable.”

However, observed Times-Dispatch reporter Jim Nolan, “It was not lost on the gathering the the parents and students most likely to be in need of hearing the message were likely not in the audience.”

Image capture from YouTube posting, "Crazy Ass Varina Fight."

Image capture from YouTube posting, “Crazy Ass Varina Fight.”

Bacon’s bottom line: In other words, the audience consisted of parents who already do hold their children accountable for their behavior and who show every sign of caring deeply about the quality of education their children are receiving at Varina. With all the wailing and gnashing of teeth about the students on the receiving end of school and police discipline, this meeting serves as a reminder that there are plenty of students from responsible families whose education is disrupted on a regular basis. The mass fight in the cafeteria was an extreme manifestation of a more pervasive problem reflected in smaller altercations and incidents. Thanks to the Sunday gathering, responsible families had a venue to express a perspective that does not get heard enough.

The Varina incident comes as the Henrico County Public Schools system overhauls its Code of Community Conduct, which describes the rights and responsibilities of students and parents, outlines the progressive consequences of continued bad behavior and describes “corrective” strategies.

The new approach has had a positive impact on the number of incidents at schools, William Noel Sr., director of student support and disciplinary review, told me for an article I never ended up writing. Unless the infraction is egregious, he said, there is a process in which the administration meets face-to-face with the student and with parents. A behavior plan and student supports are put into place. The idea is to teach the child to make better choices, while recognizing that there may be reasons based on what’s happening at home why the child is “acting out.”

Sounds touchie-feely to me. But at the time of the interview a few months ago, the approach seemed to be working, as measured by a declining number of infractions. If it’s working, that’s great. But I also think there’s wisdom in what the Varina parents were saying yesterday. The onus of improving school discipline shouldn’t fall mainly upon the schools. Parents have to play a role as well. And that won’t happen unless the responsible members of the community speak up and set expectations of acceptable behavior.

Obessions of Inequality

Graphic credit: "Geographies of Opportunity"

Graphic credit: “Geographies of Opportunity”

by James A. Bacon

Sarah Burd-Sharps and Kristen Lewis, authors of “Geographies of Opportunity,” provide a state-by-state and congressional district-by-congressional district measurement of “well being” across the United States. Overall, Virginia fares reasonably well in the report, scoring 11th overall. Well being is determined by a set of measures for life expectancy, education and median income. But state averages can mask a lot. Indeed, Virginia stands out for the inequality of income and well being inside its borders.

The premise of the report is that there other ways to measure progress than by the usual metrics of economic growth. The study draws upon the United Nation’s Human Development Index to measure three “fundamental human dimensions” — a long and healthy life, access to knowledge, and a decent standard of living. “There is a broad consensus that these three capabilities are essential building blocks for a life of value, freedom and dignity.”

The Index score for the United States as a whole is 5.06. Connecticut is the best off, with an index of 6.17, and Virginia comes in at 11th at 5.47. Mississippi (no surprise) comes in last at 3.81. (Play with the data here.)

Burd-Sharps and Lewis also break down the numbers by congressional district. Virginia has three of the top 20 districts in the nation ranked by well being — the 8th (Arlington, Alexandria, Fairfax), the 10th (Manassas to Winchester), and the 11th (Reston to Quantico). And it has one of the poorest — the 9th, in the far Southwest.

OK, what does all this tell us? I’m really not sure. Other than obsessing about what we all know to be true — there are huge wealth gaps in the United States — the study doesn’t tell us much. Gee, there’s a link between education level and health? Who would have figured? And there’s a link between income and health, too? Gosh, tell me more.

In a sidebar, the study notes how the ethnically pluralistic residents of the 8th district in the affluent Virginia suburbs of Washington, D.C., live eight years longer than the predominantly white residents living in the isolated mountains of Southwest Virginia. Longevity in affluent U.S. congressional districts exceeds that of Japan. Longevity in the poorest districts, like the 9th, compares to Gaza and the West Bank.

So, what do we do about it? Improving human development outcomes in Appalachia, the authors opine, “requires greater investment in peoples’ capabilities to thrive in the new economy” — specifically, a high-quality pre-school experience.

But elsewhere we read that the higher the proportion of foreign-born residents in a congressional district, the longer the district’s life expectancy. In sunny California, there is a “surprising” 3.2-year life expectancy gap in favor of foreign-born Latinos as compared to their U.S.-born counterparts. Surprising — really? It’s only surprising if you think that the only meaningful determinants of public health are education and income levels, and that culture has nothing to do with it. As it turns out, the longer poor Latinos live in the U.S. and adopt fast food-heavy diets, the greater their risk of obesity-related illnesses.

Now that would have been an interesting angle to pursue. When affluent populations have better health outcomes than poor populations, the assumption is that the difference can be attributed to superior access to health care. Surely some of it is. But how much is due to different diets and lifestyles? Are there strategies that attack health problems more directly than, say, by increasing spending on pre-K?

Another thing that irritated me was the failure to adjust incomes for cost of living. If the purpose is to compare well being, the cost of living is a major consideration. The authors contrast Connecticut and Wyoming, states with similar GDPs per capita, in the $65,000 to $68,000 range. “Does this mean that the people living in these two states enjoy similar levels of health, education and living standards?” the authors ask. “It does not. Connecticut residents, on average, can expect to outlive their western compatriots by nearly two and a half years, are 40 percent more likely to have bachelor’s degrees, and typically earn $6,000 more per year.”

Here’s what the study doesn’t bother to tell you. According to CNN Money’s cost of living calculator, earning $50,ooo in Cheyenne, Wyoming, is the equivalent of earning $64,900 in Hartford or $76,600 in New Haven. Incomes are lower? Yes, but the dollar stretches 30% to 50% further. The question I would ask is this: How is it that the residents of Wyoming, who aren’t nearly as well educated as the residents of Connecticut, manage to earn higher incomes on a cost-of-living-adjusted basis?

As an aside, let’s talk about income disparities within congressional districts. Which state do you think has greater disparities of vast wealth and poverty in close proximity — Wyoming, a state of cowboys and coal miners, of Connecticut, a state of inner-city poor and hedge-fund billionaires?

For a document entitled, “Geographies of Opportunity,” this study has almost nothing to say about the economics of opportunity. It has nothing to say about strategies that poor people can pursue to lift themselves out of poverty or lead healthier lives. All recommendations call for an activist and interventionist government. Promote health by cracking down on smoking. Regulate food advertising. Invest public dollars in recreational facilities and (a remedy I actually agree with) in more walkable neighborhoods. Expand pre-school programs. Keep teens in high school until they graduate. Raise the minimum wage. The list goes on with a host of suggestions that have absolutely nothing to do with the data presented. As for the one sure-fire way to wage raises for the poor — create conditions conducive to economic growth so that companies hire more workers, drive down unemployment and bid up wages — it doesn’t warrant a mention.

The numbers in this study are potentially useful. The analysis and recommendations are not.

Adapting to Climate Change: 11 Proposals

UR_proposals

Working under the direction of University of Richmond professors Peter D. Smallwood and Stephen P. Nash, eleven UR environmental studies majors wrote papers on topics relating to the environment and climate change in Virginia. Each paper defines a problem and lays out a practical solution. All eleven papers are compiled in a document entitled, “Nature Virginia’s Economy, and the Climate Threat.” The papers are of such interest that I re-publish the abstracts below. – JAB

Seed Banks: An Insurance Policy Against Extinction from Climate Change
by Casey Schmidt

Climate change is causing the ranges of native species to shift northward at a pace that outstrips the ability of many plant species to migrate and adapt. … Although assisted migration, the process of relocating individuals or spread of seeds through human intervention, has been used successfully in some cases to preserve species, it comes saddled with potential ecological damage, and legal complications arise when these ranges cross state lines.

These complications threaten Virginia’s biological diversity, especially among rare plants and those plants from habitats affected most by climate change. In order to preserve the genetic diversity of native species before populations become isolated and inbred, this paper proposes that Virginia create a seed bank. Seed banks have been used for a variety of reasons worldwide to preserve the genes of plant species, including the preservation of crop species and for research purposes. … For this proposed seed bank, Virginia would use information collected by the state Natural Heritage Program to identify eligible species that face the greatest threat from climate change in order to preserve biodiversity, establish a genetically diverse sample for research, and potentially reestablish these endangered species in the future.

Branching Out: How Virginia Can Use Trees Strategically to Combat Biodiversity Loss
by Taylor Pfeiffer

Biodiversity loss is a consequence of climate change. As greenhouse gas emissions increase global temperatures, decreases in the abundance and diversity of species has reduced ecosystem resiliency during these changes. … Weakened ecosystems decrease the environment’s capacity to provide humans with services like safe drinking water, fuel, and protection from natural disasters. …

The agricultural industry plays a unique role in this environmental conversation, as farmland both contributes to climate change and is jeopardized by the negative effects created by the issue in a complex reciprocal cycle. This relationship, along with the presence of 8.3 million acres of farmland in Virginia, suggests that agriculture should be incorporated into the state’s climate change adaptation and mitigation strategies. …

Agroforestry, the strategic integration of trees in agriculture to create a sustainable land-use system, has been utilized for environmental benefits in the past. … This paper proposes the creation of a statewide program that requires the use of agroforestry on large farms in order to preserve biodiversity in the wake of climate change. An alternative solution is a certification program for farmers who use agroforestry practices to enhance wildlife habitat. Economic incentives and implementation assistance will encourage participation, while funding for the establishment of this program, creation of publications, and organization of events will be sourced from governmental and private grants.

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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.