Tag Archives: James A. Bacon

Let Richmond Be Richmond

Virginia Museum of Fine Arts gallery. Artsy fartsy, it's who we are. Get over it. Embrace it.

Virginia Museum of Fine Arts gallery. Artsy fartsy, it’s who we are. Get over it. Embrace it.

I delivered this speech last night to a gathering at the Branch House in an event hosted by the Virginia Center for Architecture. — JAB

Buffalo, N.Y., a metropolitan region about the size of Richmond, is debating how to pay for a new $1 billion stadium complex for the Buffalo Bills National Football League team. The City of Richmond is debating how to pay for a $56 million stadium for the Richmond Squirrels AA baseball team. I don’t know if Buffalo will ever find the money, but it really doesn’t matter. If professional sports is your yardstick of metropolitan prestige, Buffalo is running – maybe I should say stampeding — Richmond into the dirt.

But, objectively speaking – assuming this audience can be objective – where would you rather live? Let’s look at some commonly used metrics:

  • The Richmond metropolitan region has a lower unemployment rate than the Buffalo metro – 4.8% compared to 5.8%.
  • Richmond has a lower poverty rate – 11.6% compared to 14.4%.
  • Richmond has a higher median household income — $55,300 compared to $46,400.

I think we can safely and objectively say that big league sports is no guarantee of metropolitan prosperity.

While Richmond can’t seem to get a minor league baseball stadium off the ground, consider VCU’s Institute for Contemporary Art. The community managed to raise $33 million through private philanthropy with no angst whatsoever.

Pro football or contemporary art. What do our choices tell us about the Richmond region? Richmond is an artsy fartsy kind of town. And that’s OK. In fact, I’m going to argue that artsy fartsy is a good thing as we reinvent ourselves for the 21st-century Knowledge Economy.

It is commonplace today to observe that the biggest challenge for any metropolitan region is recruiting and retaining the highly skilled, highly creative citizens – scientists, artists, educators, entrepreneurs – who drive innovation and contribute disproportionately to economic growth. Somewhat more controversially, I would argue, those desirable citizens are more likely to want to live and build a career in a region that has vibrant arts & culture than one that has big league athletics.

If you accept that proposition, then it tells you a lot how we ought to be investing our civic capital. For the billion dollars it would take Buffalo, N.Y., to build a bigger, better stadium for the Buffalo Bills, we could make Richmond the arts capital of the Southeastern U.S.!

The urban geographer Richard Florida made a big splash thirteen years ago when he published the book, “The Rise of the Creative Class.” His argument, boiled down to its essence, is that Americans, young Americans especially, were increasingly likely to choose where to live based on the attributes of the region rather than because that’s where they could find a job. He turned economic development on its head. Instead of recruiting corporations, we should be recruiting the creative class. Corporations will follow the creative in order to gain access to employees with the higher-order skills and aptitudes that are in short supply.

If we embrace that perspective, we need to ask two fundamental questions: (1) What does it take to attract young professionals to RVA? and (2) What does it take to keep them here? In other words, how do we do a better job with recruitment and retention?

Richmond has a relatively stable population. We don’t get a huge flux of people moving in or moving out. Fortunately, we do seem to attract more people than we lose — we experience net in-migration. Between 2013 and 2014, the Internal Revenue Service recorded the influx of nearly 32,000 new “tax returns” into the core Richmond region – by which I mean Richmond, Henrico, Chesterfield and Hanover. During the same period, those four localities experienced an out-migration of 29,000 tax returns. That represented a net gain of about 2,800 tax-paying households in a region with about 300,000 tax returns – or a gain of not quite one percent. That’s not bad. But it could be better: We’re not in the same league as national talent magnets like Austin or Raleigh, much less Silicon Valley.

Interestingly, two-thirds of the in-migration came from other locales in Virginia, only one-third from outside the state. Pending closer analysis of the numbers, I would conjecture that that RVA functions as a regional magnet for talent, as opposed to a national magnet, drawing mainly upon the hinterland of smaller Virginia cities and towns. Many could come from the many fine colleges and universities in the state. But we really don’t know. There’s a lot we still need to learn. Continue reading

Back to Big Lick

The old Norfolk & Western Railway headquarters complex, with Hotel Roanoke in the background.

The old Norfolk & Western Railway headquarters complex, with Hotel Roanoke in the background.

by James A. Bacon

In the early 1880s, Gilded Era industrialists created a railroad junction at the town of Big Lick in the Roanoke Valley, opening up the western Virginia coalfields to development. The community renamed itself Roanoke after the river running through it, and the newly formed Norfolk & Western Railway set up its headquarters there. In the late 19th century, Roanoke was a boom town: a hub of railroad traffic and manufacturing and a gateway to the burgeoning Central Appalachia coal industry.

Eventually, the boom subsided, but Roanoke continued to fare well. Besides hosting a number of corporate headquarters, the Star City of the South, so named for the giant star on Mill Mountain, served as the retail and administrative center for much of western Virginia. When I lived there in the early 1980s — covering the coal and railroad beat for the Roanoke Times — Roanoke was a delightful community surrounded by natural beauty. I enjoyed living there and was sad to leave.

But my personal journey mirrored the intractable economics that Roanoke, and other cities its size, is struggling against. As a young reporter, I didn’t see much of a career path upward. To get ahead, I had to move. Ambitious young professionals in other fields faced the same dilemma. No matter how much they liked living there, many had to relocate to rise in the world. As the United States evolved into a Knowledge Economy, large metropolitan regions enjoyed tremendous advantages over Roanoke-sized cities by virtue of larger labor markets.

Roanoke has stagnated since I lived there. The writing on the wall appeared as early as 1982 when the Norfolk & Western Railway merged with the Southern Railway and located the new corporate headquarters in Norfolk. The top jobs left the city but, as part of the deal, the combined Norfolk Southern Railway did keep a major administrative presence in Roanoke. Now, three decades later, comes news that 500 employees working in marketing, accounting, information technology and other departments — desirable white-collar jobs — will be moved to Norfolk and Atlanta.

The company said it is closing the Roanoke office building to achieve departmental synergies, to make better use of its real estate assets and to support its goal of streamlining its management workforce. According to the Roanoke Times, Norfolk Southern President James A. Squires described the action as a consolidation having nothing to do with work force or business issues peculiar to Roanoke. The Roanoke office was less utilized than the offices in Norfolk and Atlanta, he said.

But that’s disingenuous. Of course the move had everything to do with Roanoke — or, more precisely, the size of its labor market. If Norfolk Southern had excess space in Norfolk, Atlanta and Roanoke, in theory, it could have shut down a Norfolk or Atlanta office and consolidated employees to the other two. Office space in Roanoke, I’m willing to wager, has the added advantage of costing less. But, the fact is, Norfolk and Atlanta are much larger labor markets, making it significantly easier for the railroad to recruit employees with white-collar skills.

The migration of corporate operations and white collar employees in the United States goes one way — from smaller cities and towns to bigger ones. The process does not work in reverse.

Looking back, Roanoke had one shot at bucking the trend — hitching up with the scientific and engineering brainpower at Virginia Tech. In theory, Blacksburg and Roanoke could have supported one another, with Virginia Tech spinning off high-tech start-ups and Roanoke providing financial, legal and other professional services. Despite the efforts of the Roanoke-Blacksburg Technology Council to bridge the 42-mile gap, the hoped-for synergies never really materialized. The Roanoke and New River valleys are divided by rugged mountains and connected by a single thread, Interstate 81. The 45-minute travel time created a psychological divide that has been hard to overcome.

It’s tremendously sad. The people of Roanoke are good people. In my personal experience, they are friendly, community-minded and egalitarian in spirit. It doesn’t seem fair that their economic prospects are leaking away because of forces beyond their control. But the world isn’t fair.

Update: I have to modify my categorical statement that the migration of corporate operations from small cities to big cities is a one-way flow. The very day I published this post, Edelman Technology, a German manufacturer of industrial equipment, announced its intention to locate its North American headquarters in Rocky Mount, roughly 30 miles south of Roanoke. The company will hire five to 10 employees including  software specialists, electricians and industrial equipment maintenance staff. So, there are exceptions to the rule. They are few and they are minor, but there are exceptions.

Show the Love, Support this Blog

love_baconDear readers,

Bacon’s Rebellion is Virginia’s leading non-partisan blog devoted to state and local public policy issues. There are other great blogs in Virginia, but they are aligned with one partisan viewpoint or the other. We’re different. We focus on policy issues — not politics — and we entertain a wide variety of perspectives. People don’t read Bacon’s Rebellion to seek confirmation of their biases, they read it to challenge their biases and engage in intelligent, civil discourse.

With one brief interruption, I’ve been publishing Bacon’s Rebellion since 2002. I have supported the blog through sponsorships, in which various groups have provided financial support to underwrite quality journalism. I will continue seeking sponsorships, but the marketplace is changing: People with the resources to hire experienced writers often want to publish their own blogs and publications. I have to put bread on the table, and so does regular contributor Peter Galuszka, and if that means dedicating our time to publications other than Bacon’s Rebellion, then that’s what we have to do.

If you like Bacon’s Rebellion… if you appreciate the content and commentary you find here and nowhere else… I ask you to please support the blog financially. The more readers collectively contribute, the more time Peter and I can devote to Bacon’s Rebellion.

In the left-hand column, you’ll find a “Contribute Now with Paypal” button which will allow you to voluntarily “subscribe” to the publication. (We also take credit cards.) Pick a level of support with which you’re comfortable — $2 monthly, $5 or even $10 — and accept our thanks.

James A. Bacon Jr.
Publisher

Update: Many thanks to readers who have contributed to Bacon’s Rebellion. You are wonderful, we feel your love, but you are too few in number. Therefore, we’re launching into NPR-style fund-raising mode. We will elevate this and other appeals to the top of the blog as long as it takes to generate a respectable revenue flow.

NoVa Still Drives Virginia’s Population Growth

population_change

Virginia’s population surpassed 8.3 million inhabitants as of July 1, 2014, according to the latest estimates by the Weldon Cooper Center for Public Policy’s demographics group. Still the nation’s 12th largest state, Virginia ranked 10th in absolute population growth in 2014.

Despite the economic slowdown caused by sequestration in the past year, Northern Virginia accounted for nearly three-fifths of the state’s population growth. Numerous localities in economically depressed Southside and Southwest Virginia continued to lose population.

 

biggest_gainers2As seen above, the biggest gains in absolute numbers occurred in existing population centers, especially Northern Virginia with  more modest growth in the Richmond and Hampton Roads regions. Loudoun County led the pack over the four-year period.

percentage_growth

In terms of percentage growth, the story was very different. Two groups fared well: older, established urban areas like Fredericksburg, Alexandria, Manassas and Charlottesville showed strong growth; and counties on the metropolitan fringe like Loudoun and New Kent. Growth rate between counties and cities, says Weldon Cooper in a press release, has established “relative parity” since 2010. That represents a marked departure from the pattern that has prevailed since World War II.

– JAB

Addressing the Real Source of Voter Disenfranchisement

voter_disenfranchisementby James A. Bacon

While partisans of a particular political party, which shall go unnamed, works itself into a righteous wrath over Voter Identification laws that supposedly threaten to bring back the Jim Crow era, they have been less vocal about the very tangible disenfranchisement of African-Americans created by the denial of voting rights to people with felony convictions. Perhaps it’s too embarrassing to bring up the issue because it was that very same party, in its pre-Civil Rights incarnation as the party of Southern segregation, that enacted those laws in the first place.

But consider: Of Virginia’s 6.4 million citizens of voting-age population, 450,000 have been disenfranchised by their felony status. The laws disproportionately affect black citizens. In 2010, 20% of the state’s voting-age African-American population could not vote as a result of a felony conviction, according to Helen A. Gibson, a University of Virginia civil rights historian, writing in the current edition of The Virginia News Letter.

In “Felons and the Right to Vote in Virginia: a Historical Overview,” Gibson walks through the history of what she calls “felon disenfranchisement” in Virginia in ante-bellum Virginia, the Jim Crow era and the Civil Rights era. “Despite recent steps toward reform,” she writes, “Virginia continues to struggle with its legacy of one of the highest disenfranchisement rates in the country.”

But the state has made progress in recent years. Former Governor Mark Warner streamlined the application for non-violent offenders to get their voting rights restored, reducing the period they had to wait before petitioning to get their rights restored. Former Governor Bob McDonnell issued an executive order making 350,000 Virginians convicted of non-violent felonies eligible to have their voting rights restored without the three-year waiting period. Most recently, Governor Terry McAuliffe has reduced the waiting time for restoring voting rights to those convicted of violent felonies and petitioned to have drug offenses removed from violent felonies. (Seventy-two percent of Virginians incarcerated for drug offenses are African-American.) The administrative systems for restoring voting rights has not kept pace with these gubernatorial actions, so voting-right restoration lags.

Here’s what I’d like to know: How many people have been unable to vote in Virginia due to Voter ID disenfranchisement compared to how many have been unable to vote compared to felony disenfranchisement? Maybe two or three hundred compared to two or three hundred thousand? Would it be asking too much to have the rhetoric of outrage directed at the source of greatest injustice?

Medical Crush

surdak

Chris Surdak

by James A. Bacon

One day historians will look back upon the healthcare debate in the United States and marvel at how oblivious the politicians, lobbyists and pundits were to the massively disruptive changes to come. Congress battling over Obamacare and Virginia legislators grappling over Medicaid expansion will appear to future generations like so many dinosaurs hunting and munching and rutting, totally unaware that a meteor bearing down on them would bring them all to extinction.

In the view of futurist Chris Surdak, author of “Data Crush: How the Information Tidal Wave Is Driving New Business Opportunities,” the U.S. health care system is beyond reform. Massively entrenched special interests — physicians, hospitals, pharmaceutical companies, insurance companies, Medicare and Medicare recipients —  are deeply wedded to the status quo. “They are politically very powerful,” he tells Bacon’s Rebellion, “and rhetoric is all about self-preservation and self propagation. Who wants to see an unlicensed doctor? Who is against helping sick people?”

But that system is so dysfunctional and resistant to change that it will collapse as entirely new medical practice models emerge. Writing in HP Matter: The Healthcare Issue, Surdak identifies game-changing technologies that will give rise to new medical products and services that will deliver such better outcomes at less cost that they will render the old system obsolete.

New sensors are making it possible to track an ever-growing array of medical markers — temperature, pulse, blood pressure, glucose, cholesterol and virtually any kind of molecular compound — around the clock in real time, and then to transmit that data to central repositories where it can be subjected to predictive analytics. Soon, writes Surdak:

When you or I feel a bit sick it will be completely normal for us to stop by a vending machine at the mall, buy a disposable, $5 plastic cube (like today’s Square credit card reader), lick it, and then get an accurate diagnosis of our ailment in 10 seconds or less.  We’ll then get a coupon for the best treatment for that ailment and an invitation to consult with a five-star specialist in that condition, who practices medicine on a different continent. This will all be normal to us by 2020.

Existing health care providers will avail themselves of these technologies to make incremental improvements to the quality and cost of medical care, but they have no incentive to disrupt the system in which they are so heavily invested. Real change will come from entrepreneurs who build new business models around the technology. Healthcare incumbents can stifle domestic competition — although it is interesting to see how big players like drugstore chains are planning to disrupt the urgent care and diagnostics businesses — but they can’t quash competition from abroad.

Medical tourism, a large and growing industry, will explode, Surdak predicts. Instead of traveling outside the country for big-ticket procedures like open-heart surgery or kidney transplants, patients will consult with their doctors via FaceTime or Skype.

With telemedicine, it won’t matter where I live, or where my provider practices; we will simply log into a consultation session online. As a result, I will seek out the very best providers wherever they are in the world, and they in turn will work to market directly to me through online exchanges not unlike Angie’s List or eBay. This transformation is already taking place, and doctors who do not join such exchanges immediately will, again, find themselves providing commodity services to the least-common denominators in the market.

Traditionally, incumbent businesses have used their power to influence laws and regulations to protect themselves from competition. Change is moving so fast, however, that the politicians and regulators won’t be able to keep up, Surdak says. Much as Uber disrupts the transportation-for-hire industry by entering a market, developing a constituency and then asking for regulatory permission, the new wave of medical providers will develop powerful constituencies — new business ecosystems and, most importantly, happy patients — before the incumbents can shut them down.

If Surdak is right, and I think he might be, there will be a huge reshuffling of winners and losers. The biggest winners will be patients, who will get better medical treatment at lower cost, and the new wave of medical enterprises. The losers will be hospitals, insurers and physicians wedded to the status quo. If they don’t adapt, they will go extinct.

Insofar as state and federal governments pay for half the tab for the nation’s healthcare, governments will be big winners, too. The changes Surdak predicts could bend the medical cost curve radically downwards. Tens of trillions of dollars in future Medicare and Medicaid liabilities could evaporate. Boomergeddon will never arrive, and I’ll have to write a groveling apology.

I asked Surdak if there is anything that government can do to hasten medical disruption, especially at the state level. He suggested that we could get to work dismantling the barriers to change — professional licensure requirements, Certificate of Need regulation, mandated medical benefits — by which vested interests protect themselves. But from his Olympian perspective, he didn’t seem to think it really mattered. Disruption is coming regardless.

From a Virginia-centric perspective, I think it does matter. I draw an analogy with the deregulation of the banking industry in the 1980s. North Carolina got the jump on Virginia, enacting deregulation a couple of years before Virginia did. North Carolina banks started the process of consolidation and rationalization earlier than Virginia banks, eventually growing big enough to swallow the Virginia banks whole. Today, banking is a pillar of the North Carolina economy, not of Virginia’s. Similarly, if Virginia medical institutions are subjected to the full force of Surdakian disruption earlier than their peers in other states, they will have more time to adapt and innovate. They could emerge from the ashes stronger than before.

Will Virginians take up the challenge? I’m not optimistic. We don’t call ourselves the “Old” Dominion for nothing. But you never know. Medical miracles occasionally do happen.

Police Shootings in Virginia — a Social Injustice?

Protests in Ferguson

Protests in Ferguson. Photo credit: St. Louis Post-Dispatch

by James A. Bacon

As the national debate rages over police killing of blacks, Mark Bowes has conducted some excellent reporting for the Richmond Times-Dispatch. It’s easy to argue by media-fueled anecdote, as the United States has been doing for months now. But at some point, we need to look at the numbers. Bowes has compiled a list of all “justifiable homicide” police killings in Virginia between 1990 and 2013. While the numbers do not conclusively settle the question as to whether blacks are being unfairly singled out for state-sanctioned, police violence, they do narrow the parameters of the debate significantly.

According to Bowes, Virginia police have reported 130 people killed by police in “justifiable homicides” since 1990. Of those, 59 were black (45.5%), 70 were white and one was Asian. (The percentages for more recent years, 2000 to 2013, were roughly the same.) The African-American population in Virginia is about 20%.

By the most superficial measure imaginable, then, blacks are more than twice as likely as whites to get killed by police. But the picture changes when  the fatal-shooting ratio is compared to the percentage of violent crimes committed by African-Americans, about 60%. If we’re comparing people who engage in violent crime, blacks are less likely to be shot by police than whites. On the other hand, if we compare the fate of people assaulting law enforcement officers, blacks are somewhat more likely to be killed than whites. The experts quoted by Bowes agree that raw numbers will only take the analysis so far. It’s important to know the circumstances surrounding each shooting.

“Police killings are not random, and we shouldn’t expect killings to be proportionate to the population percentages, but instead proportionate with potentially violent encounters with police,” said Thomas R. Baker, a criminologist at Virginia Commonwealth University.

Baker homed in on another critical dynamic. Scholarly research indicates that blacks have more negative views of police officers than whites do, and they are less likely to cooperate with police.

Much of this distrust and dissatisfaction comes from negative direct and vicarious experiences with the police, including media accounts, and has unfortunately become inculcated among many black Americans. At the same time, police officers are not insensitive to this distrust and dissatisfaction, and may enter encounters with blacks on highest alert.

Providing additional training for police likely will have little effect unless accompanied by cultural changes on how police are perceived in the African-American community, Baker said.

Blacks have legitimate reasons, based in history, to distrust the fairness and objectivity of police. The question is the extent to which that distrust is justified today. Those who are committed to the idea of America as a fundamentally unjust society will say, of course, that it is fully justified. By picking a handful of incidents from across a nation of 320 million people, which then are magnified by the media, they can generate powerful images in support of their position.

But anyone can prove anything by cherry picking the data. Colin Flaherty, author of “White Girl Bleed a Lot,” has built a franchise around the documentation of black-on-white crime, most of which is ignored by mainstream media. Does this anecdotal data prove the existence of a black-on-white crime wave? No. We need to see the numbers.

Let us hope that Virginia never descends into the racial turmoil seen in St. Louis, New York, Cleveland and other cities. People of good will of all ethnicities and ideologies, especially those involved in the criminal justice system, need to work the problem described by Baker: Reduce the negative perceptions blacks have of police and reduce the hair-trigger responses of police active in black communities. As long as the negative perceptions of police are continually fed by national media, however, that won’t be easy to do.

Governance Reform for the Tobacco Commission

Two decades later, and still looking for an economic replacement.

Two decades later, and still looking for an economic replacement.

This is the year for governance reform. Not only will the General Assembly tighten up state ethics laws and consider proposals to strengthen the autonomy and transparency of the Commonwealth Transportation Board, legislators are proposing an overhaul of the way the Tobacco Indemnification and Community Revitalization Commission does business.

A 2011 study by the Joint Legislative Audit and Review Commission found that the $756 million the tobacco commission had spent had only a marginal impact on Southside and Southwest Virginia, tobacco-growing regions whose economies the spending was supposed to diversify.

Now Governor Terry McAuliffe has backed a set of proposals by Republican lawmakers, including commission chair Del. Terry Kilgore, R-Scott, to make the organization more accountable. According to the Richmond Times-Dispatch, proposals include:

  • Establishing an online database of all awards;
  • Reviewing all loans, grants and distributions of money by a “viability manager” such as the Virginia Resources Authority.
  • Adopting a strategic plan every two years to set priorities, measurable goals and quantifiable outcomes.
  • Reducing the number of commission members from 31 to 25;
  • Setting a requirement that 60% of commission members have an expertise in business, economic development, investment banking, finance or education.

Bacon’s bottom line: I’m not sure that anything can take the politics and favoritism out of the dispensation of tobacco commission dollars, but these proposals seem to be a modest step toward more transparency and accountability. So, that’s good.

Alas, the problems of Southside and Southwest Virginia are far bigger than these modest reforms can address. Traditional economic development strategies will not transform the region. The commission needs to underwrite some radical experiments with the venture capital-like mentality that, while most likely will fail, a handful might open up previously unimagined possibilities. The proposed reforms are likely to reinforce group-think, however, and that’s not good.

–  JAB

Transparency, CTB Autonomy Guide New Vision for Transportation Governance

aubrey_layne

Aubrey Layne. Photo credit: Daily News

by James A. Bacon

The Virginia Department of Transportation (VDOT) has a system for dispensing its approximately $2 billion a year in construction funding that is so blindingly complex that only a few people understand it. If I started explaining it to you in detail, I’d probably have to shoot you halfway through to put you out of your misery.

But I’ll give you a quickie overview so you can understand what the McAuliffe administration, working with Republican leaders in the General Assembly, is trying to accomplish by overhauling the funding formula. The end result, said Transportation Secretary Aubrey Layne in an interview yesterday with Bacon’s Rebellion, will be to transfer decision-making power from the executive branch to a more autonomous Commonwealth Transportation Board, allowing the CTB to function as the policy-setting group it was always meant to be.

Construction dollars come from two sources: state and federal. Roughly $900 million a year in state tax revenues goes into the Transportation Trust Fund. Before anything is spent on state construction projects, money is siphoned into the Highway Maintenance Operations Fund to make up for that fund’s perennial deficits. More money is sluiced away for revenue sharing with localities, and yet more for various administrative expenses. Whatever is left can be spent on construction.

Meanwhile, the $1.1 billion or so in federal highway dollars gets sliced and diced, with dollars peeled away to pay off GARVEE bonds, to maintain U.S. bridges and highways, and to fund miscellaneous programs dictated by Uncle Sam. Whatever is left can be spent on construction.

Thanks to the influx of new state tax dollars, there’s a fair amount of money available for construction these days. But as a practical matter, expenditures are so hemmed in by legislative formulas that the system has little flexibility. Under the 2012 transportation funding overhaul, available funds are to be divvied up as follows: 25% to bridges, 25% to pavement, 25% to high priority discretionary projects, 15% to public-private partnerships 5% to unpaved roads, and 5% to intelligent transportation systems. If there’s any money left over — which there isn’t, even with the 2012 tax increases — additional sums go to unpaved roads and to Interstate matches, and the remainder gets divvied up this way: 40% for primary roads (distributed to each of nine transportation districts), 30% for secondary roads (distributed to individual localities), and 30% to urban roads (cities and towns).

“It is a maze. It is opaque,” Layne said. It’s also inefficient.

As a practical matter, little money trickles down to the localities. It’s like the Colorado River  — so much water has been sucked out along the way that there’s only a rivulet by the time it reaches the ocean. By the time money seeps down to individual transportation districts and individual localities, the amounts are so small they take years to accumulate enough money to actually pay for anything. As a result, money just sits there and gets eroded by inflation.

Another problem with the system, said Layne, who served on the CTB before McAuliffe anointed him transportation secretary, is that the executive branch effectively made all the key decisions. “When we came into office, VDOT was working off ‘the Governor’s List.'” The Governor’s List, an informal entity of obscure origin, was a list of projects reflecting the governor’s priorities, which VDOT then submitted to the CTB. “Where we are today, the governor sets the table,” said Layne. “As a CTB member, it’s hard to rearrange the dishes.”

(During the McDonnell administration, CTB members asked some questions and then invariably approved the requests — usually unanimously. The role of CTB members, I argued in “Kings of the Road” two years ago was to lobby behind the scenes to get projects in their transportation districts accepted by the administration. The board itself exercised little oversight.)

Layne’s goal, and McAuliffe’s, is to restore transparency and CTB independence. To make the policy-making board more independent, the administration is backing legislation that would curtail the executive’s ability to remove CTB members except where there’s cause. This would eliminate a repeat of instances like when former Transportation Secretary Sean Connaughton demanded the resignation of CTB member Jim Rich, a vocal proponent of the administration’s Charlottesville Bypass project.

The proposed new funding formula would create transparency by simplifying the system, Layne said. A new 40/30/30 formula would replace the 25/25/25/15/5/5 formula and portions of the 40/30/30 formula cobbled onto it. The new allocation formula would distribute money as follows: Continue reading

More Tidbits on the U.S. 460 Story…

kilpatrick

Charlie Kilpatrick, Virginia Highway Commissioner

Aubrey Layne was acutely aware of the wetlands permitting issues afflicting the U.S. 460 highway project before assuming his position as Secretary of Transportation in January 2014. As chairman of the funding corporation that sold bonds to investors, he had had to disclose in September 2013 that the Virginia Department of Transportation had not yet acquired the necessary permits from the U.S. Army Corps of Engineers to build the 55-mile highway. That’s one reason why, when he took the McAuliffe administration cabinet post, he acted so quickly to shut down the project — he’d been stewing over the matter for four months.

In an article yesterday, the Richmond Times-Dispatch gave a pretty good account of the testimony Layne gave to the House Appropriations Committee. The story made clear that the “secretary’s office” — led by former Transportation Secretary Sean Connaughton — was largely responsible for the decisions that created the debacle, which cost Virginia taxpayers roughly $300 million for work that will never be done or needed. But the T-D overlooked what I considered to be a critical topic: What role, if any, did then-deputy highway commissioner Charlie Kilpatrick play in the debacle?

I was able to glean a few more details in an interview with Layne this afternoon when, among other topics, I pressed him on Kilpatrick’s role in the policy meltdown. In a post this morning, I noted that Kilpatrick had made a presentation about U.S. 460 to the Commonwealth Transportation Board in mid-2013 that omitted the crucial fact that the project had not obtained the needed wetlands permits. Assured that there was no problem, the CTB approved the project financing.

Since then, Kilpatrick has been elevated to Virginia Highway Commissioner.

Layne defended the actions of VDOT personnel during the McDonnell administration. On multiple occasions, he said, VDOT officials went to the “secretary’s office” with issues relating to the wetlands permit. “Every time,” he said, “they got orders to keep on going.”

Without getting into specifics, Layne said that Kilpatrick and VDOT did “balk” at times at what they were told to do. “There was some pushback.” But Connaughton was determined to advance the project, which was the top transportation priority of Governor Bob McDonnell. While Kilpatrick did not inform the CTB of all the relevant facts, Layne said, he was acting as instructed. Layne is confident that Kilpatrick was not driving the decision-making process and does not bear responsibility for one of the biggest managerial screw-ups in Virginia government history.

I belabor this point only because I argued this morning that it is important to ascertain Kilpatrick’s role in the U.S. 460 fiasco. McDonnell’s people are all gone, but Kilpatrick now serves as a senior official of the McAuliffe administration. Unless new information surfaces, I consider Layne’s comments to be the final word on the matter.

– JAB