Virginia Legalized Gambling: Outlook for 2020

Photo credit: Gambling Herald

By Don Rippert

It’s not called the OLD Dominion for nothing. Virginia has lagged the nation in allowing legalized casino gambling. This is especially noteworthy since the United States doesn’t have a very tolerant attitude toward legalized gambling compared to other countries. In other words, Virginia has been a laggard within a lagging nation. That is changing. As of 1997 only two US states allowed legal casino gambling. Today 43 US states have operating casinos.  Virginia is not among those 43 states. Is anybody surprised? However, legislation passed in 2019 will change that. It seems very likely that Virginia will be joining the modern world of legalized gambling in 2020 (and beyond). The biggest barrier to Virginia casinos opening in 2020 is the bureaucracy of our state government. More on that in a moment. First, let’s review a brief history of legalized gambling in the Old Dominion.

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S&P Global Slams Dominion for Gas Plants

Dominion Virginia Power’s gas-burning plant in Brunswick County.

By Peter Galuszka

International financial analysis firm S&P Global has issued a scathing report criticizing Dominion Energy Virginia for over emphasizing future electricity demand and proposing unneeded natural gas-fired generating plants.

According to S&P: “An examination of State Corporation Commission, or SCC, records; Dominion’s past integrated resource plans, or IRPs; campaign finance documents; and independent reports, along with interviews with utility analysts and environmental advocates and statements from Dominion officials, shows that the company has consistently over-forecast electricity demand to justify building new capacity, primarily natural gas plants with dubious economics that will ultimately be paid for by ratepayers.”

Dominion plans on adding at least eight gas plants with a generating capacity of 3,700 megawatts by 2033, S&P reports. An update to its 2018 IRP plan would add three alternatives that would add 2,425 megawatts of gas capacity by 2044. Continue reading

Despite Five Years of Programs, Campus “Rapes” Surged at UVa in 2018

by James A. Bacon

Five years ago, Rolling Stone magazine plunged the University of Virginia into turmoil with its infamous article, “A Rape on Campus: A Brutal Assault and Struggle for Justice at UVA.” Though totally discredited, the story prompted intensive soul-searching by a campus administration primed to believe in the existence of a “rape culture” at the university. As documented in the latest edition of Cville magazine, the university dedicated considerable resources to address the problem of sexual assault.

The university adopted a Policy on Sexual and Gender-Based Harassment and Other Forms of Interpersonal Violence, instituted outreach and training programs, developed a system for reporting and tracking sexual assaults, hired a full-time Title IX coordinator, and beefed up its Equal opportunity and Civil Rights office staff. Counseling & Psychological Services nearly doubled its staff. The Women’s Center received more funding, hired trauma counselors and set up counseling hotlines.

But a curious thing happened. The incidence of sexual assault isn’t improving. Indeed, in 2018 the number of reported “rapes” leaped to 28 from 16 the year before. Continue reading

Mamas, Don’t Let Your Babies Grow Up to Be Anthropologists

The U.S. Department of Education College Scorecard has updated its searchable database so students can see median earnings for disciplines in which 20 or more degrees are granted. Just for yuks, I checked the data for Virginia Commonwealth University where my son is enrolled. It will surprise no one to see that students earning computer science degrees will earn more than three times as much in their first year following graduation as those who earn degrees in drama, music and anthropology.

Parents, if your kid doesn’t consult this tool, you should! See what you’re getting for your investment in his or her college education. Find out how much you’ll have to subsidize the little darling when he graduates!


Way Overdue: Cleanse the State Code of Racist Residue

by James A. Bacon

This 1956 law, enshrined in Chapter 59 of the Acts of the General Assembly, is a dead letter, rendered irrelevant by judicial rulings, others laws, and history, but it’s still on the books:

Notwithstanding any other provision of law, no child shall be required to enroll in or attend any school wherein both white and colored children are enrolled.

“The Commission to Examine Racial Inequity in Virginia Law,” commissioned by Governor Ralph Northam, identified this and 97 other Jim Crow-era laws still lurking in the state code. The governor has committed to repeal the racially discriminatory language. You can view the report here.

“If we are going to move forward as a Commonwealth, we must take an honest look at our past,” said Northam in a press statement. “We know that racial discrimination is rooted in many of the laws that have governed our Commonwealth—today represents an important step towards building a more equal, just, and inclusive Virginia.”

States the report: Continue reading

Games Still Played with “Conformity Windfall”

Look what they did here! This Senate Finance Committee slide from November shows only “conformity windfall” revenue from individual provisions, but then deducts individual and corporate tax relief against those totals to shrink the size of the Taxpayer Relief Fund, source of future tax reform. That’s not what the General Assembly ordered. How much corporate “conformity windfall” is missing from the top line of this chart?

By Steve Haner

Sometimes you have to start the victory lap, even if you only get halfway around the track. A year ago, on Bacon’s Rebellion and in Thomas Jefferson Institute for Public Policy organs, I was beating the drum for a proposal to double the state’s standard deduction, the amount of family income exempt from income tax.

When the smoke cleared, the legislature had made a start, increasing the standard deduction for a married couple from the ridiculously greedy (on the Tax Man’s part) $6,000 to a slightly less ludicrous $9,000. This at a time when the federal standard deduction was going to $24,000, meaning the state taxes Virginia middle-income families more far heavily than Uncle Sam.

To add insult to injury, the legislature delayed the impact of the change until the 2019 tax year, even though it could easily have made it effective for the 2018 tax year that was settled with last spring’s returns and refunds. But the good new is that the change, now in effect, will save Virginians $360 million this year and $236 million on next year’s taxes. Here is what I wrote about it Thursday for the Jefferson Institute.

The legislature agreed to one other major provision proposed by the Jefferson Institute, creating a Taxpayer Relief Fund to hold in abeyance any and all “windfall” revenue not returned by the changes made in that 2019 bill. Remember that as you read on, it is key. The state may be playing a deceptive game which I just figured out and explain below.

Nobody else was talking about the standard deduction before the issue was first raised here, and a number of legislators – including the Democrat who will now chair the House Finance Committee – reported they had seen the Jefferson Institute proposal. Saving taxpayers $600 million over two years is certainly not a bad outcome. And if lightning can strike once…. Continue reading

Virginia tax increases: Outlook for 2020

By Don Rippert

Promises, promises. As Virginia’s new Democratic majority in the General Assembly starts to take power, three issues emerge. First, many of the winning Democratic candidates promised deeper and broader social benefits from the state. Expanded Medicaid, more money for K-12, more money for higher education, more money for green initiatives, etc. Second, few of the winning Democratic candidates spent any time describing just how these expanded social benefits would be financed. Politics as usual. Third, regardless of their expressed political philosophy, the vast majority of Virginians do not want to pay higher taxes. What now? Will the Democrats stick with reforms that don’t require new taxes or move into change areas which can only be implemented with “mo’ money”? If the latter, will the Democratic majority transparently raise taxes or engage in opaque budget trickery?

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Virginia’s Tech Roadmap: Space, Biotech, Cybersecurity and More

by James A. Bacon

A new study, “The Commonwealth Research and Technology Strategic Roadmap,” has identified six strategic technology clusters exhibiting the greatest potential for Virginia’s economic growth. The report, conducted by the State Council of Higher Education for Virginia, is not prescriptive — it does not offer legislative recommendations. Rather, the report identifies fruitful areas for collaboration between education, industry, government, and economic developers.

The most promising areas for focused research and economic development include:

  1. Life and health science
  2. Autonomous systems
  3. Space and utilities
  4. Agricultural and environmental technologies
  5. Cybersecurity
  6. Data science analytics

Collaboration should take the form of aligning investments in R&D, talent development, industry engagement, capacity building (such as venture capital), and marketing/advocacy for the purpose of globally competitive industry clusters. Continue reading

…. And a Nod to the Federal Reserve Bank of Richmond

by James A. Bacon

As a follow-up to my post about Stephen Moret, whose contributions to Virginia’s economic development have been amply recognized, I’d like to acknowledge the work of an important figure who has largely flown under the radar: Tom Barkin, CEO and president of the Federal Reserve Bank of Richmond.

Federal Reserve Bank presidents are quoted mainly for their thoughts about Federal Reserve Board monetary policy. Presidents of the Richmond Fed, for instance, have been known over the years as monetary hawks, advocating the Fed’s role as inflation fighter. Although the Richmond Fed has always gathered data and business intelligence about economic activity in the 5th federal reserve district, which includes Virginia, previous bank presidents rarely delved into the nitty gritty of local economic development.

Barkin is different. He may be engaged in national policy debates — I don’t know — but I can state with certainty that he has reoriented the analytical and research resources of the Fed to figuring out how to promote economic growth and development within his district, which encompasses Maryland, Delaware, West Virginia, Virginia, North Carolina and South Carolina. He has been traveling throughout the region — not just to the big cities — and talking to local leaders. One particular focus has been rural community development. Continue reading

Mr. Economic Development as Biz Person of 2019

Virginia Business magazine has named Stephen Moret, CEO of the Virginia Economic Development Partnership, as its 2019 business person of the year. The recognition is richly deserved. In less than three years, Moret has overhauled the badly dysfunctional VEDP, directed the effort to capture Amazon’s HQ2 project, restored Virginia to a top ranked state for business climate, and launched several initiatives that should improve the state’s economic competitiveness even more in the years to come.

The magazine has an excellent profile in its current edition, telling the story of his upbringing in a small Mississippi town, his winning a Louisiana State University scholarship by playing the trumpet, his contributions as a senior member of Louisiana Governor Bobby Jindal’s administration, and then his move to Virginia as chief economic developer.

The only insight I would add to the Virginia Business profile would be to note the breadth of Moret’s interests. The VEDP has a narrow scope: recruiting out-of-state corporate investment to Virginia (with a side job of promoting foreign trade). Moret, quite rightly, understands that the key to attracting corporate investment is building and retaining human capital. He also comprehends the role of university-centered innovation ecosystems in driving economic growth. Weaving together the strands of corporate recruitment, workforce development, and higher-ed, he has emerged not only as the leading practitioner of economic development in Virginia but its most visible and articulate theoretician.


Two Medicaid Updates: Work Requirement, PBMs

By Steve Haner

Medicaid Work – Training Requirement Dead

Disappointing many, thrilling many, and surprising nobody, the Governor of Virginia has openly broken his 2018 promise to couple expanded Medicaid coverage with a work or job training requirement for able-bodied recipients. Moving people out of poverty is no longer the goal.

Governor Ralph Northam was quoted in posted story by the Richmond Times-Dispatch saying:

“Virginians made clear they want more access to health care, not less. Given the changed makeup of the General Assembly and based on conversations with new leadership, it is unlikely Virginia will move forward with funding a program that could cause tens of thousands of Virginians to lose health care coverage.”

To which outgoing Speaker Kirk Cox responded:

“The Governor and I made personal commitments to each other on this long-term public policy agreement. There wasn’t an asterisk that said, “unless my party wins the next election.” It’s a sad reflection on the value of integrity in modern politics.”

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Virginia marijuana reform: Outlook for 2020

By Don Rippert

Cannabis certitude. The seemingly inexorable march toward legalized marijuana in the United States continues unabated. A poll of 9,900 American adults conducted by the Pew Research Center from September 3 – 15, 2019 found that 67% of the respondents thought cannabis should be legalized. That’s five percentage points higher than Pew’s last poll on the subject conducted in 2018. Many state legislatures are acting on behalf of their constituents. Legal weed sales began last Sunday in Michigan and will commence on New Year’s Day in Illinois. At the federal level the House Judiciary Committee approved a bill legalizing marijuana at the federal level. As of today 33 states have legalized medical marijuana and 11 states have approved the sale of recreational marijuana to adults. Six more states seem very likely to make decisions on legalizing recreational marijuana in 2020 – Arizona, Arkansas, Florida, Missouri, New Jersey and South Dakota. As legal marijuana becomes big business pundits are predicting the future of legal weed. Arcview Market Research and BDS Analytics believe that medical marijuana will be legalized in every state by 2024 and recreational marijuana will be legal in 20 states by that date. Virginia is not among the 20.

Weed in the Old Ancient Pre-historic Dominion. Virginia is one of 15 states where marijuana is fully illegal. (Note: I do not count CBD oil sales as partial legalization). The first step on the long road to legalization is usually decriminalization. In 2018 Virginia’s General Assembly considered a bill to decriminalize possession of small amounts of marijuana. It was killed along a purely party line vote in the Senate Courts of Justice Committee.  In 2019 another decriminalization bill was considered. Virginia’s Republican leadership in the General Assembly couldn’t muster the minimal courage to take the 2019 bill to the full committee and killed it in sub-committee. Later that year the Republicans got their heads handed to them in the General Assembly election. What a surprise.  Now Democrats hold a trifecta in Virginia with control of the House, Senate and Governorship.  Once again, Sen. Adam Ebbin (D-Alexandria) is the patron for proposed legislation to decriminalize possession of small amounts of marijuana. However, this year unlike the past, Ebbin’s party is in control.

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Mo’ Money for Schools Across the Board?

The Virginia Board of Education (VBOE) has published its annual report on Virginia public schools. The report catalogs numerous deficiencies in the state school system, with an emphasis on unequal educational outcomes. And it recommends mo’ money across the board — mo’ money for teacher pay, mo’ money for mo’ teachers and staff, mo’ money for poor schools. You know the drill.

The report contains an informative graphic (replicated above) that shows the changing demographics of Virginia’s school population. The percentage of white students has declined over the past decade. Whites no longer comprise a majority in Virginia’s school population. The percentage of black students has declined as well. But the percentage of Asian and Hispanic students has soared.

The number of English learners has increased from 87,000 students a decade ago to 107,000 students in 2018-19. As it happens, according to the VBOE’s searchable Standards of Learning database, only 34.7% of English as Second Language (ESL) students passed their reading SOLs last year, compared to 80.9% for other students. The disparity for writing was even more dismal.

The Commonwealth can increase educational spending across the board — more money for everybody and everything — or it can focus added spending on where the investment returns are the greatest. The greatest inequality in Virginia schools is between those who speak English as a native language and those who don’t. If we want to reduce educational disparities, we’ll get the most bang for the buck by focusing resources on teaching immigrant kids how to read and write English. Once these students understand what’s being said in class, progress in other subjects will follow. Just a thought…


How U.S. 15-Year-Olds Compare to Their International Peers

Source: Organization of Economic Cooperation and Development (OECD)

by James A. Bacon

Every three years the Organization for Economic Cooperation and Development administers standardized reading, math, and science tests to representative samples of 15-year-olds from dozens of countries — 79 in 2018, to be exact. Despite a decades-long effort in the United States to raise standards, the performance of American teenagers has been stagnant since 2000, reports the New York Times. (Actually, math performance has declined slightly.)

Even worse, as the newspaper summarizes the results of the Program for International Student Assessment (PISA) exams, “The achievement gap in reading between high and low performers is widening. Although the top quarter of American students have improved their performance on the exam since 2012, the bottom 10th percentile lost ground.” A fifth of American 15-year-olds scored so low on the PISA test that it appeared that they had not mastered the reading skills expected of a 10-year-old.

The achievement gap, which is getting wider despite the expenditure of billions of dollars to close it, is a source of consternation — and a mystery — to the educators consulted by the NYTimes. “There is no consensus on why the performance of struggling students is declining. Could it be school segregation? Limited school choice? Funding inequities? Family poverty? Continue reading

UVa Gearing Up for Another Hike in Tuition & Fees

by James A. Bacon

Later this week the University of Virginia Board of Visitors will consider increasing tuition by 3% to 4% in the 2020-21 school year and jacking up fees between 3% to 6%. Here is a copy of the PowerPoint presentation showing the arguments and data that the administration presented the board in its November meeting.

As usual, the UVA administration blames tuition increases on declines in state support for higher education.  “Responsibility for funding educational costs has shifted from the taxpayer to the student,” states one slide. “Increases in tuition have not kept pace with declines in general funds, leaving a gap of $3,648 per student in 2020-2021.”

While those numbers may justify tuition increases in previous decades — UVa bases its calculations on trends going back to 1990-91 — it overlooks the fact that between 2012 and 2018 (the latest year for which I could obtain data from UVa’s annual financial reports), state support increased by $20 million even while academic (non-hospital) spending increased by $511 million! (See support for these numbers here.) The state is to blame for higher tuition? Really? In what universe? Continue reading