Monthly Archives: February 2014

Second Map of the Day: Where the Young People Are Going

Posted on February 28, 2014 by | 26 comments
Source: Weldon Cooper Center for Public Service

Source: Weldon Cooper Center for Public Service

If the future of Virginia resides with its young people, we can see from the map above that some regions are a lot better off than others.

Luke Juday, several of whose maps I have re-published on Bacon’s Rebellion, has moved to the Weldon Cooper Center for Public Service, where he has begun posting on the Demographics Research Group’s StatChat blog. In this map, he shows where the Millennials moved between their teen years and their 20s by showing in tan/brown/red the localities that exported young people and in green the localities that imported them. (Yellow jurisdictions were a wash.)

The big gainers: Northern Virginia, urban-core cities and college towns. The losers: most everybody else.

— JAB

26 Comments

Posted in Demographics

Map of the Day: Lightning Fatalities

Posted on February 28, 2014 by | 1 comment

lightning

If you’re afraid of lightning, you’re way better off in Virginia than in North Carolina or Maryland!

Source: The Atlantic Cities blog.

— JAB

1 Comment

Posted in Disasters and Disaster Preparedness

Protests Pick Up Against Bay LNG Exports

Posted on February 27, 2014 by | 11 comments

cove point By Peter Galuszka

Protests are picking up against plans to convert a liquefied natural gas shipping facility on Maryland’s western shore of the Chesapeake Bay at Cove Point so  it can both export as well as import the product. The proposed, $3.8 billion project is owned by Richmond-based Dominion Resources.

Four protestors were arrested today for blocking the entrance to the Allegany County Courthouse in Cumberland, Md.  according to the Chesapeake Climate Action Network which has officials in suburban Washington and Richmond.

They are trying to raise concerns that the Dominion project will increase the likelihood of using controversial hydraulic fracturing for gas exports at Cove Point and lead to more greenhouse gas emissions.

The Chesapeake network is just one of a number of activist groups that are drawing attention to fracking for natural gas. The method, which yields more product from hard-to-reach geological formations, involves the use of powerful chemicals. Other worries are that wells leak and are prone to fire. According to the network’s Kelly Trout, leakage throughout the LNG conversion cycles at Cove Point and at its shipping destinations could case as much or more greenhouse gas emissions as coal.

The Cove Point issue of interest to me because I have visited written about the facility and am familiar with coal mining and burning which fracked gas is displacing. Just a few years ago, green groups correctly protested what was going on in the Appalachian coalfields with highly destructive mountaintop removal and mine deaths. There is no question that coal is a major and negative factor for the lives of its workers and the environment in general. It is the single largest contributor to greenhouse gas emissions in this country.

Coal, however, is slipping in importance precisely because of the rise of fracked gas. Although gas prices have been rising recently partly because of harsh winter weather, the surprising crash in gas prices four years ago caught the energy industry off guard. A decade ago, coal had supplied half of the electricity generated in this country and that number has slipped to 35 percent.

Cheap gas has presented the U.S. with another unexpected benefit – rising energy independence. This is why Dominion is so eager to convert an aging LNG import facility in Maryland built in the mid-1970s into an export facility. It has long-term contracts already for exported LNG with Japanese and Indian utilities. Dominion bought the Cove Point facility about 12 years ago after a checkered history in which it  had been through several owners. Cove Point is one of about 20 facilities that are being proposed for LNG exports.

Cheap gas is likewise a curse and brings new uncertainty. Its economic benefits have meant that it is no longer worthwhile to invest billions in carbon capture technologies that might have allowed safer and less-polluting use of coal. Gas is also pushing back the urgency for expanding non-fossil and renewable energy sources such as wind and solar.

I’m of two minds on gas and LNG. On the one hand, gas beats coal hands down. It doesn’t kill as many workers, doesn’t destroy mountains and produces half of the carbon dioxide as coal.

Yet as time goes on, there’s more reason to be suspicious about fracking. There’s no certainty that the toxic chemicals used in the process will not hurt ground water. Natural gas wells do tend to leak and fires, fatalities are not uncommon. Pipelines blow up. Fracking has also been used with great success to tap previously inaccessible oil and shale oil in places like North Dakota. But that raises yet another problem: the use of unsuitable and unsafe railroad tanks cars to haul great quantities of it.

Ms. Trout provided me with material compiled by her group raising questions about leakage and Cove Point. Their research says that with a relatively low leakage point of 1.4 percent, taken over the entire LNG shipment cycle, enough methane would be released into the atmosphere that makes it about 80 percent as bad a carbon dioxide from other sources such as coal.

Cove Point would receive natural gas via pipeline from fracked gaslands in Pennsylvania and possibly Maryland or from pipelines running from Louisiana. At the Bay facility, it would be processed, cooled to minus 265 degrees Celsius, but in huge Thermos-style tanks aboard ship which would travel halfway around the world. In Asia, the LNG would be warmed back into gas, processed and used for fuel. This, she says, presents plenty of opportunities for leaking.

It very well could be. I have no data supporting or refuting the points. Meanwhile, the protests grow stronger and the arguments become more complicated.

11 Comments

Posted in Business and Economy, Economic development, Energy, Environment, Labor and Workforce, Money in politics, Public safety & health, Regulations and Government Oversight, Science & Technology

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The Acid Test for Richmond BRT: Will Property Owners Tax Themselves?

Posted on February 27, 2014 by | 2 comments
BRT in Cleveland

BRT in Cleveland

by James A. Bacon

Momentum is building in the Richmond region to build a 7.4-mile Bus Rapid Transit system along the Broad Street corridor. Transit lovers tout the many blessings that a BRT system would bring, and they discuss the projected costs, but there are two things you never hear them talk about: Risk and ROI (return on investment). No one ever asks if investment in BRT is a competitive use of scarce public capital.

BRT can provide the Richmond region with service comparable to light rail at a fraction of the cost — that’s the message that made it into the lead of an article written by Peter Bacque in the Times-Dispatch this morning. “It’s a very cost-effective way to have a premium transit service,” said Amy M. Inman with the Virginia Department of Rail and Public Transit at a meeting of the Urban Land Institute.

Building a BRT system, in which buses would run on dedicated lanes between Rockett’s Landing, downtown and Willow Lawn, would cost an estimated $53.8 million to build and equip and $2.7 million a year to run. Funding would come from federal, state and local government.

The price is worth it, advocates say, because the bus line would generate millions of dollars of investment along its route. They cite the examples of The Tide light rail line in Norfolk, which has stimulated more than a half-billion dollars of investment, and Cleveland’s celebrated BRT line on Euclid Ave., which has triggered $5 billion in development. The proposed Richmond line bus would run a bus every 10 minutes during periods of peak demand and 15 minutes off-peak. The dedicated lane and the ability to coordinate with traffic signals would make the buses faster and more reliable than regular city buses. The perceived permanence of the transportation enhancement would encourage property owners to invest in new development along the route.

Those observations do have merit. But Richmond BRT advocates seem oblivious to the concept of risk. You will never hear from them, for instance, that not all BRT lines are successful. (Read this Atlantic Cities article to find about the less-than-stellar examples of Cape Town, New Delhi and Bangkok.) Likewise, BRT fans seem oblivious to dangers inherent in building a system largely with state and federal dollars and then having to maintain that system over a decades-long cost cycle with local dollars only. Eventually the bus lane needs to be repaired and the buses need replacing. Also, no one talks about the cost associated with taking two lanes of automobile traffic out of circulation. I don’t believe in privileging automobiles on city streets but it is folly to pretend that eliminating two lanes would be cost-free.

As I explained in a post last April, no one has developed a financial methodology for calculating whether Broad Street BRT would pay its own way or provide a competitive use of local dollars. Advocates are making the case based upon cherry-picked comparisons with other transit systems, vague claims of benefits — BRT would help attract young creative-class workers to the region! — and raw enthusiasm. I am not saying that BRT is a bad idea. I am saying that no one has made a financial case for it.

The acid test. There is an acid test for determining whether Richmond BRT would live up to the promises made for it. Try setting up a special tax district along the route to fund the local share of the project, the ongoing cost of operating the system and the cost of building up a maintenance reserve. I can assure you, property owners along the route will be wildly supportive of the project if someone else is paying for it. They will assure you that BRT will attract tens, maybe hundreds, of millions of dollars of investment. But talk is cheap. Would property owners be willing to subject themselves to a modest surcharge to their property tax in order to make BRT a reality?

If it turns out that property owners are so enthusiastic about the benefits of BRT that they will willingly shoulder a tax surcharge to pay for it, then, great, go for it! Relieving the general public of the burden of paying for the project will disarm the Tea Partiers and anti-tax zealots. The project will be a political no-brainer.

But if property owners aren’t willing to put their money where their mouths are, what does that tell you? It tells you that they have little confidence in those rosy claims of increased property values and turbo-charged development. It tells you that the putative benefits may be way overstated. It tells you that building the project will likely destroy economic value, not create it.

2 Comments

Posted in Infrastructure, Land use & Development, Transportation

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Don’t Expect Increased Real Estate Assessments to Bail out Local Government

Posted on February 27, 2014 by | 4 comments

demand_instituteThere’s bad news for local governments in Virginia that rely upon property tax revenues to support schools, public safety and other priorities. Property values for single-family homes, which account for a large majority of most jurisdictions’ total assessed value, will not increase much over the next few years, according to a new study by the Demand Institute.

Nationally, the picture  is dismal enough. “Double-digit increases in U.S. home prices over the past two years are not indicative of future trends,” states the report. “They were driven largely by investors buying up swaths of distressed homes to meet growing rental demand. Over the next five years, prices will grow over a much slower rate. We forecast existing single-family media home prices to grow at an average annual rate of 2.1 percent between 2015 and 2018 as supply and demand move into sustained equilibrium.”

But there will be significant variations among the 50 states. And Virginia drew the short end of the stick. Of the 50 states and District of Columbia, the Demand Institute ranks Virginia third from the bottom (D.C. is at the very bottom) for expected rebound in the median price for a single-family house between 2012 (the market trough) and 2018 — only 14%.

(There is a discrepancy in the numbers that I am at a loss to explain. Nationally, the median price of single family houses is forecast to increase at an annual rate of 2.1% between 2015 and 2018, or 6.3%.  Yet the report’s breakdown of the states shows every state but D.C. showing increases between 7% and 33% over the same period. If anyone can explain the difference, please let me know.)

There is even greater variation in the forecasts for Metropolitan Statistical Areas (MSAs). The Washington metro area ranks dead last, with anticipated price gains of only 7% between 2012 and 2018 — an average gain of little more than 1% a year.

Richmond is a laggard with only a 17% gain over the same period, while Hampton Roads shows a stronger housing market than most, with a forecast gain of 25%.

Bacon’s bottom line. Rising real estate assessments won’t bail out Virginia local governments like they did in the early 2000s. Meanwhile, localities are grappling with the cost of financing public pensions, meeting state and federal storm-water mandates and replacing aging infrastructure. Either tax rates will rise, government services will be cut… or government officials will have to do things differently. Of the three, the latter course of action is the most desirable, though probably the least likely.

What can we do? Move more aggressively to apply smart-city technologies to manage public facilities and infrastructure more efficiently. Encourage more compact development to maximize utilization of existing infrastructure without incurring the obligation to build and maintain more. Begin integrating online and computerized learning into K-12 curricula as appropriate.

4 Comments

Posted in Housing, Infrastructure, Land use & Development, Taxes

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A Less Destructive Form of Sprawl

Posted on February 26, 2014 by | 6 comments
The red dot marks the location of the proposed George Washington Village.

The red dot marks the location of the proposed George Washington Village on the outer fringe of the Washington MSA. (Click for larger image.)

by James A. Bacon

A development group is asking for approval to build up to 2,900 homes and 1.8 million square feet of commercial space off Interstate 95 in Stafford County. The proposed “George Washington Village” calls for a 1,100-acre town-center development with a mix of single-family detached houses, town houses and apartments to be built over 20 years. The plan includes more than 400 acres of open space, $50 million in new infrastructure and amenities such as parks, athletic fields and swimming pools, according to the Free Lance-Star.

I have long argued that the momentum of growth and development is shifting back toward the urban core. There’s only so much added population that built-up neighborhoods can absorb, however. Getting municipal approval to tear down old buildings and erect new ones in their place tends to be more drawn out than building in empty fields. Therefore, in fast-growth MSAs like Washington, new development will continue to take place on the metropolitan periphery — just at a slower pace than before.

The George Washington Village is anecdotal, to be sure, and it may not be typical of most development taking place on the far southern fringe of the Washington metropolitan area. But I wonder if it is indicative of a broader trend to building more clustered, village-style development in exurbia instead of the traditional pattern of scattered cul-de-sac subdivisions and shopping centers .

I don’t know Stafford County well but most of what I’ve seen strikes me as a featureless wasteland. There is nothing resembling an urban form — just subdivisions smeared across a vast expanse of land, with low-value commercial development strung along state highways like Route 1 and Route 17. The arterials are hideously congested, and it must be extremely expensive providing public services to such scattered, low-density settlement patterns. Any departure from the norm has got to be an improvement.

I haven’t seen any sketches or plans for the George Washington Village but the bare details provided by the Free Lance-Star suggests that housing will be compact by exurban standards — averaging more than four houses to the developed acre. There will be a “town center,” presumably mostly retail, allowing locals to conduct much of their daily business with short car trips without the necessity of overloading the already-congested road network. Who knows, the “village” even may have a walkable component.

By any normal person’s definition, George Washington Village is still sprawl. The location next to I-95 suggests that the village will be a bedroom community, with most people commuting to employment destinations in Northern Virginia. But based on the little evidence we have, it’s a less deleterious kind of sprawl. In an ideal smart-growth world, it would never get built. But Washington, D.C., Arlington, Fairfax County and Prince William County cannot build compact, walkable communities served by mass transit fast enough to serve the region’s growing population. We can wish all we want for smart growth in the urban core but in a growing region, people have to live somewhere. If they’re going to move to exurbia in search of affordable housing, it makes more sense for them to live in clustered “villages” than subdivisions built helter-skelter across the countryside.

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Posted in Land use & Development, Transportation

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Car Sharing Cuts into Automobile Ownership

Posted on February 26, 2014 by | 4 comments
BMW, Ford and other auto manufacturers are pushing shared-rider automobile services, especially in congested European cities. The practice is spreading to the U.S.

BMW, Ford and other auto manufacturers are pushing shared-rider automobile services, especially in congested European cities. The practice is spreading to the U.S.

by James A. Bacon

The spread of car sharing could erode automobile sales and automobile ownership in the years ahead, according to a new study by AlixPartners, a business advisory firm. The study, which surveyed 1,000 licensed drivers in 10 developed car-sharing markets and 1,000 drivers nationally as a control group, found that car sharing appears to be displacing vehicle purchases at a rate of 32 to 1 (one car-sharing vehicle displaces 32 vehicles purchases) — more than double the rate suggested by previous studies.

So far, car-sharing services such as ZipCar, FlexCar, RelayRides and Hubber have eroded automobile sales by approximately 500,000 vehicles. As the business model spreads to other markets, it could reduce automobile purchases by an additional 1.2 million cars through 2020, the study concludes. “While the approximately 500,000 vehicle purchases avoided to date is itself a large number,” said Mark Wakefield, leader of AlixPartners’ North American automotive practice, “this study suggests that car sharing nationally could scale up as these 10 markets have, and if that happens, the impact on the traditional automotive market could be explosive.”

The merger of Zipcar and Flexcar in 2007 is thought by many to have ratcheted up the commercialization of car sharing in North America. The recent advance by larger corporations — including Avis (which bought Zipcar), Daimler, BMW and Enterprise — into car sharing suggests that the industry is accelerating up an adoption S-curve, according to the study.

According to Wakefield, while smartphones and increasing urban density have driven adoption thus far, automated and driverless cars could be key enabling technologies for car sharing to grow well beyond the current early-adopters.

“Car sharing could really get traction as smartphone and automated-vehicle technologies pave the way for new mobility systems throughout America and much of the world,” said Wakefield. “In the future, automated and, especially, driverless cars could be the killer apps for car sharing.”

Bacon’s bottom line: Insofar as Americans voluntarily embrace car sharing because they find it provides more affordable transportation value, it’s a good thing. Taking cars off the road ameliorates congestion and reduces the demand for parking spaces, which consume valuable urban space that could be dedicated to higher and better uses. Local governments can encourage the spread of car sharing by leasing on-street parking spaces to car-share companies like Zipcar at a reasonable price.

Realistically speaking, car sharing is unlikely to amount to anything more than a niche market for several years. If AlixPartners is right, car sharing will reduce car sales by 200,000 vehicles per year on average over the next six years — a rounding error in a U.S. auto market that generated 15.6 million in sales last year. But imagine the impact that driverless cars would have on the market. Instead of hoofing it to a location blocks away where the cars are parked, you could summon a car by smart phone and it would drive to you. That would make the value proposition significantly more attractive. Smart growthers are salivating at the prospect that the economics of urban transportation will be transformed, making urban lifestyles more attractive by comparison. They may be right.

4 Comments

Posted in Transportation

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McAuliffe Peruses Tobacco Commission

Posted on February 26, 2014 by | 3 comments

tobacco leafBy Peter Galuszka

What’s going on with the Tobacco Commission? Gov. Terry McAuliffe wants to know and is asking for a detailed accounting of its finances over the past five years.

The Tobacco Indemnification and Revitalization Commission, created in 1999 with a $1 billion endowment from lawsuit settlements with four major tobacco companies, has been under the gun for years.

The idea was that Virginia would take its settlement from a $206 billion nest egg 46 states won from Big Tobacco and put it to good use. Some states allocated their share solely for health concerns and to convince people, especially children, not to start smoking.

Virginia used part of its funds for this, but also created a slush fund supposedly for economic development in counties affected by changes in the tobacco economy from Southside to Southwest Virginia that grew bright leaf and burley tobacco.

The commission has always operated in a kind of “Andy of Mayberry” fashion without much oversight and that has caused some big problems. The worst was in 2010 when former state Finance Secretary John W. Forbes and later commission head was convicted of using $4 million in tobacco money for personal purposes, like fixing his house.

A 2011 report by the Joint Legislative Audit and Review Commission gave the commission mixed reviews, noting that some projects it funded made sense but others did not.

JLARC praised the commission for its worker training programs and helping expand high speed broadband to rural areas. But it said that the commission needed a better and more sophisticated way of tracking the impacts of projects it funded. Two years earlier, a commission headed by former Gov. Gerald E. Baliles had come up with some similar findings but the commission adopted only eight of 22 of them. One of the Baliles’ recommendations was to have a JLARC study made of the commission but it was not pursed at the time.

One area of concern for the McAuliffe administration is the $20 million in grants provided to Liberty University’s Center for Medical and Health Services spent over the past two years when the commission was making less than $60 million on interest payments.

One could argue that having a medical center in Lynchburg would help residents in Southside but another issue is that Liberty, founded by fundamentalist Protestant preacher Jerry Falwell, is a religious institution. The late Falwell was a major political player. The school is starting an osteopathic medical school which is interesting since it chose not to found a traditional one, although osteopathic doctors receive much the same training as medical doctors.

Speaking of politics, the co-chairman of the tobacco commission is Terry Kilgore, a Republican politician. By coincidence, his twin brother, Jerry, is a former attorney general, gubernatorial candidate and a lawyer for Jonnie R. Williams Sr., the former head of Star Scientific and the man who paid or gave now-indicted former Gov. Robert F. McDonnell and his wife Maureen more than $160,000 in gifts.

At one point, Williams who has not been indicted in the GiftGate matter and is expected to be an important prosecution witness against the McDonnells, tried to push for tobacco commission help with his nicotine-based dietary supplements.

There could be a political motivation with McAuliffe’s query but the tobacco commission has always been a ripe target for good reason.

N.B. Maurice Jones, McAuliffe’s nominee for Commerce Secretary and the former publisher of The Virginian-Pilot, has been targeted by a probe by the U.S. Department of Housing and Urban Development for possible improper lobbying while he was a HUD deputy secretary. It appears there will be no criminal charges but the Jones matter will be part of a Capitol Hill hearing today. Republicans are certain make some political hay out of the matter. Full disclosure, I worked part time for Richmond’s Style Weekly (still do) when Jones was Pilot publisher and oversaw Style. I know him personally.

3 Comments

Posted in Business and Economy, Courts and law, Crime, Corrections and Law Enforcement, Demographics, Economic development, Environment, Government Finance, Government workers and pensions, Infrastructure, Labor and Workforce, Land use & Development, Planning, Politics, Public safety & health, Science & Technology

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Downtown Richmond Falls in Love with the Mid-Rise

Posted on February 25, 2014 by | 16 comments
The old...

Past…

by James A. Bacon

Still need proof that the momentum of growth and development is shifting back to traditional downtowns? Consider this: Roughly 3,000 apartment units are under construction in the Richmond metropolitan region — and half of them are located downtown.

The new. (Photo credit: Richmond Times-Dispatch).

Present… (Photo credit: Richmond Times-Dispatch).

That gem of a factoid was buried in a Times-Dispatch article about the construction of two mid-rise buildings on the edge of Virginia Commonwealth University. A $13.6 million, seven-story structure on Grace Street, owned by the VCU Real Estate Foundation, will be used for classrooms, faculty office, media relations and retail space. A $20 million, 11-story building, developed by private investors, will have 150 apartment units open to anyone, not just students, who wants to rent them. With amenities including a fitness center, rooftop lounge and recreation room, rents will run between $920 and $1,500 per month.

Future...

Future…

The new buildings replace two older structures, one currently used by VCU and the other a seedy, one-story retail building.

The Square Apartments are significant not only for the impact they will have on the urban fabric north of VCU but the fact that, unlike so many downtown apartments, it does not rely upon historic tax credits to make the financing work. (I’m taking a leap in making that statement, but I feel safe in making it — the old structure was destroyed to make way for the new. Nothing of historic value is being preserved.)

Most apartment construction downtown consists of adaptive reuse such as the old Central National Bank building, an art deco treasure, the old Massey Energy headquarters building, and the old warehouses in Shockoe Bottom. The supply of historic buildings that can be retrofitted into apartments is rapidly dwindling. For downtown and neighboring precincts to continue growing, the market will have to be able to supply mid-rise buildings erected on tear-down lots. The Square Apartments demonstrate that such projects can get financed and built. There is no shortage of run-down properties in the Broad Street corridor with no redeeming architectural value that can be converted to mid-rises.

The Richmond real estate marketplace is turning its back on sprawl in way impossible to imagine a decade ago, when development across the region consumed land more voraciously than anywhere else in Virginia. The City of Richmond is debating the merits of mixed-use development focused on a new ballpark in Shockoe Bottom versus mixed-use development focused on a new ballpark on the Boulevard near Interstate 95. Meanwhile, much of the growth in neighboring Henrico and Chesterfield Counties consists of re-developing land at greater density. In Henrico, for instance, Gumenick Properties is recycling an 80-acre tract of lower income housing into 994 single-family houses and 1,096 apartments in a walkable, mixed-use neighborhood over the next 10 years. Meanwhile, Crosland Southeast is converting the old Cloverleaf Mall in Chesterfield into a walkable, mixed-use neighborhood that includes 350 multifamily residences.

That’s not to say that traditional suburban development — scattered cul-de-sac subdivisions and shopping centers — is dead. But the momentum has clearly shifted. The Richmond region is slowly mending itself.

16 Comments

Posted in Land use & Development, Planning

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Welcome to the Big Leagues, Staunton-Waynesboro

Posted on February 25, 2014 by | 8 comments

MSAs

Important news for data junkies: The Office of Management and Budget has updated its boundaries for America’s metropolitan and micropolitan areas. The Weldon Cooper Center for Public Service has helpfully provided a map of the newly drawn boundaries. Here is a summary of the changes:

  • Staunton, Waynesboro, and Augusta County was upgraded from a micropolitan to a full-fledged MSA.
  • Danville and Pittsylvannia County were downgraded from an MSA to a Micropolitan Area.
  • Norton, Dickenson and Wise Counties became part of the Big Stone Gap Micropolitan Area
  • The Richmond MSA shrank with the removal of Cumberland, King and Queen, and Louisa Counties
  • The Virginia Beach MSA lost Surry County
  • The Charlottesville MSA gained Buckingham County
  • The Blacksburg MSA expanded to include Floyd County
  • The Northern Virginia MSA absorbed Rappahannock County

To be included in an MSA, at least 25% of a county’s workforce must commute into an MSA’s urban area.

— JAB

8 Comments

Posted in Uncategorized

“We Don’t Need No Stinking Ethics Reform!”

Posted on February 24, 2014 by | 7 comments

maureen_and_bob(1)By Peter Galuszka

It’s no surprise but Virginia legislators appear to doing as little as possible to upgrade the state’s lax ethics rules. In fact, they may be backtracking on some of them.

In a rational world, one would think that something would be done after the indictment of former Gov. Robert F. McDonnell and his wife on 14 federal felony counts. Maybe then the state, which has some of the weakest ethics rules for public officials in the country, would take serious corrective steps.

True to form, with only two weeks left to go in this year’s General Assembly session, legislators are still clinging to their conceit of Virginia exceptionalism.

They insist on believing that somehow the Old Dominion is still dominated by gentlemanly cavaliers who are too honest to be burdened with much oversight. Questioning their integrity disrespects  people of  their assumed social class and is in poor taste.

Indeed, according to Washington Post columnist Robert McCartney, the mishmash of laws is actually quite shocking when you consider just how other worldly their proposals are. Consider:

  • Both the House of Delegated and Senate have bills that would require filing disclosure statements electronically instead of on paper as required now. The bills don’t require the filers to have their statements notarized. Why? Too inconvenient to do so digitally. Of course, they could make it a felony to lie on the statements, but that’s considered too harsh.
  • There would be a new cap on gifts of more than $250 but no limit on how many times gifts could be given. By this logic, an individual or corporation seeking influence could give a total of  $10,000 worth of gifts as long as they are split 40 ways.
  • This applies only to “tangible” gifts like McDonnell’s famous, engraved Rolex watch worth $6,500 from the chief executive of dietary supplement maker Star Scientific. Most gifts given by Dominion or Altria and the like are “intangibles” similar to trips to the Master’s golf tournament in Georgia or hunting safaris in Africa. ProgressVA, an advocacy group, found that of 756 gifts they studied, only 18 were considered “tangible.”
  • Lastly, and most important, there will be no ethics commission with teeth. There will be some kind of “advisory” commission that will not have the power to investigate or subpoena unlike institutions some 40 other states have. Like many forms of regulation in Virginia, this moves things to the “voluntary” level, giving those in power the benefit of the doubt.

Hopefully, Gov. Terry McAuliffe will show stronger leadership than he has so far on this issue. He has issued an executive order cutting gives to his staff to $100 but that doesn’t apply to the General Assembly.

Legislators led by the likes of House Speaker Bill Howell seem to see real ethics reform as anathema brought on by outside forces. They see it as insulting to their personal sense of honor.

Many support McDonnell who goes on trial in July. That support, however, is not showing up in “Legal Defense for Bob” funding. My guess is that he’ll cop a plea before then since he needs $1 million for his lawyers and is nowhere close to getting it.

Curiously, according to the Post, McDonnell was offered a deal by federal prosecutors to plead guilty to lying on bank statements and they’d let his wife Maureen off the hook. No deal, said McDonnell.

7 Comments

Posted in Courts and law, Crime, Corrections and Law Enforcement, Media, Money in politics, Politics, Regulations and Government Oversight

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America’s Most Egalitarian City… Less of a Distinction than It Appears

Posted on February 23, 2014 by | 10 comments

Egalitarian... but comparing apples with oranges.

Measured by income extremes, Virginia Beach is the most egalitarian large city in the country. Among households in 2012, the average income of the Top 5% was only six times that of the average income for the Bottom 20%. That compares to Atlanta, where the ratio was almost 19 to one, San Francisco, where the ratio was almost 17 to one.

In a recent paper, Brookings Institution scholar Alan Berube calculated the ratio for the 50 largest cities in the United States.

Berube observes that regions with great income disparities can be classified into two groups: cities like San Francisco where there are exceptionally high incomes (lots of wealth creation going on) and cities like Atlanta where there are exceptionally low incomes (little upward mobility).

Virginia Beach would appear to be an example of a city with modest extremes of wealth and poverty. In that sense, one could say it is the most middle class of all the nation’s largest cities. But there’s really not much to brag about here. Only a small portion of the “city” consists of urban core: the old resort area. Norfolk and Portsmouth were the urban centers of the south Hampton Roads region. Demographically, Virginia Beach is a middle-class suburb. The city owes its egalitarian distinction to the fact that Berube, not taking into account Virginia’s unique system of local government, was comparing apples to oranges.

Note: I have totally rewritten this post to correct a major misunderstanding in the original version.

— JAB 

10 Comments

Posted in Poverty & income gap

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Flotsam and Jetsam from the Week Past

Posted on February 22, 2014 by | 12 comments

Here are some of the stories I couldn’t get to last week:

Kevin Spacey in "House of Cards." If there's one business nastier than politics it's Hollywood.

Kevin Spacey in “House of Cards.” If there’s one business nastier than politics it’s Hollywood.

Filmflam. It’s not often that I find myself agreeing with Sara Okos with the Commonwealth Institute, but we see eye-to-eye on the subject of motion picture tax credits. The House of Delegates has passed a bill doubling the tax credit to up to $25 million over the biennial budget at a time when many other states are scaling back. Writes Okos in the Half Sheet:

The most rigorous studies show that motion picture tax credits aren’t effective generators of economic development. The jobs that they create are temporary and low-paying. In the movie biz, most highly paid, highly skilled workers are brought in from other regions, while low-skilled workers are the ones hired locally and take home only a fraction of the total wages associated with a project. Because the film industry is highly mobile, those jobs don’t last after a movie wraps.

House Republicans have lost their way. Seriously, how can they claim to be fiscal conservatives when they pull stunts like this? What’s going on? Are they hoping to pick up production of the Netflix political series “House of Cards,” which is threatening to pull up its sets and decamp to another state unless Maryland agrees to more tax credits? Yuck. If there’s a business dirtier than inside-Washington politics, it’s this one.

What’s happening in Charlottesville? Charlottesville appears in the list of 10 fastest-shrinking metropolitan economies in the United States, with a loss of 2.2% in gross metropolitan production, according to 24/7 Wall Street, the second straight year of decline. Yet unemployment remains at reasonably robust 4.6%. This makes no sense. I can’t think of anything that would account for such a shrinkage. Is this a statistical anomaly? Does anyone have an explanation?

tysonsLiving the High Life in Tysons. We’ll soon find out how much market demand there is for living in Tysons. Developers have begun marketing new luxury high-rises being built as part of the mammoth make-over of the congested, car-centric business district into a walkable mixed-use community. One-room studios are being listed for between $3 and $4 per square foot — the same price as in the established Clarendon neighborhood of Arlington County, considerably more expensive than in Reston but cheaper than in Washington, D.C. The tricky part is this: Renters would be paying walkable-neighborhood prices… without the walkable neighborhoods. They might get a walkable city block, but it will take years for the rest of the walkable urban fabric to fill in around them. The Washington Post has the story here.

loudoun_gravel_roadsPreserving gravel roads. Here’s an interesting turn-around. Typically, Virginians living on dirt and gravel roads have begged and pleaded with the Virginia Department of Transportation to pave them. Now comes a bill, HB 416, that would require VDOT to keep 300 miles of unpaved road in western Loudoun County as they are rather than paving, straightening or widening them. It appears that the residents of rural Loudoun like their windy dirt roads, some of which pre-date the Civil War, and want to keep them that way. Greater Greater Washington has the story here.

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Posted in Business and Economy, Land use & Development, Taxes

Self-Driving Cars to Government: Eat My Dust!

Posted on February 21, 2014 by | 13 comments

eat_dustby James A. Bacon

It’s amazing how Self-Driving Cars (SDCs) have burst into the consciousness of thinkers about transportation and urban development in the past month or two. Even more remarkable, the thinking hasn’t yet polarized into Republican/ Democratic, left wing/right wing camps. Eric Jaffe, a contributing writer to the center-left Atlantic Cities blog, has just written how a dynamic and innovative private sector may well leap-frog an ossified and gridlocked government sector to create the nation’s next transportation revolution, driverless cars — a position with which I largely concur.

Jaffe’s post was inspired by an article by Clifford Winston and Fred Mannerling in Economics of Transportation. I quoted the same article earlier this week in a post about properly taxing trucks to cover the damage they cause to roads and highways. That was just one of several opportunities created by new technology for government to wring greater efficiency from the nation’s transportation network. Unfortunately, the forces of inertia are great. Write Winston and Mannerling:

Our discussion of policymakers’ failure to implement this technology has culminated in the eternal debate over whether the public or the private sector is better able to spur technological change that contributes to growth. In the case of highways, we conclude that it is likely that the private sector will eventually implement driverless car technologies, and that those technologies will benefit motorists by leapfrogging the technological advance that the public sector has put on hold.

As Jaffe observes, government could implement many useful changes right now: “Proper road pricing could decrease traffic, not to mention generate transportation revenue. Better pavement design could reduce maintenance costs and vehicle damage. Stronger traffic control systems could improve safety on the road.” But government officials, he suggests, suffer from a bias toward the status quo.

Federal, state and local governments will get around to implementing those strategies eventually. They’ll just take way longer than it will take the private sector — driven by competition, the profit motive and organizational cultures that reward innovation — to put driverless cars on the road.

Unfortunately, government — or, more precisely, the tort system — still can muck up driverless cars. The key issue is liability for automobile accidents. As I hope to elaborate in a future article, our tort system is peculiarly mal-adapted to Self-Driving Cars. There can be little doubt that SDCs, which don’t get distracted, don’t get road rage and don’t drink, smoke dope or fall asleep at the wheel, will cause fewer accidents than humans. But the electronic components that make them safer overall create a special problem in individual court cases. The coding inside the software is so complex that it is impossible for automakers to prove that a flaw in the code did not cause an accident.

Writing in the Wall Street Journal, Don Howard and Mark P. Mills sing the praises of SDCs and address the liability issue head-on:

Self-driving cars shift liability for accidents from people, with relatively shallow pockets, to the deep pockets of manufacturers. …

The self-driving-car solution is clear. Congress should pre-empt [the National Highway Traffic Safety Administration] and the trial lawyers and pass a National Autonomous Vehicle Injury Act. The Fords and Nissans and Googles and Qualcomms should voluntarily create an Autonomous Vehicle Event Reporting System. And industry players should also create a National Autonomous Vehicle Compensation System. 

Ideally, there would be a national legal standard. But if Congress is too gridlocked to act, the states should enact their own solutions. C’mon, Virginia, it’s time to get moving.

Update: I am informed that included in the FY 2015 budget is $1 million to support an inter-departmental work group to “identify regulatory challenges related to the development, testing, and use of unmanned technologies across all modes of conveyance. The work group shall suggest strategies to attract and promote the development of unmanned technology applications and companies, federal research at facilities located in the Virginia, venture and human capital, and applied research and technology that contribute to the growth and development of the unmanned systems sector in the Commonwealth.”

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Posted in Courts and law, Regulations and Government Oversight, Science & Technology, Transportation

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The Tragic Lessons of Kiev

Posted on February 21, 2014 by | 16 comments

A pro-European protester swings a metal chain during riots in KievBy Peter Galuszka

The news from Ukraine is frightening and familiar.

At least 100 people have been killed in rioting in Kiev. Some were shot by Interior Ministry snipers after demanding that President Viktor Yanukovych allow new elections. The latest is that he may do just that.

Like all former Soviet republics, Ukraine has been caught in the usual post-collapse of the U.S.S.R. Liberal Democrats can’t amass enough power to overturn leftovers from the Communist system who have prisons and police at their disposal.

The economy has not recovered from the shock of the Soviet split up. It happened too fast. You can’t go from a seriously ossified command structure that provided cradle-to-grave services, crash it and then pretend the “magic of the market” will work overnight, or even in 25 years.

These failures have set up the tragedy in Kiev that if not controlled soon, could get truly scary. All Europe needs right now is a civil war on its edge. So far, the Ukrainian military is not involved and luckily for the world, Ukraine apparently got rid of its 5,000 nuclear weapons after the Soviet Union broke apart in 1991.

For me personally, the Kiev drama is reminiscent on several levels. I used to go to Kiev and Ukraine fairly often. Downtown Kiev is lovely. The main drag where the violence is taking place is on Khristyatyk Street, an impressive boulevard of monuments and buildings. I used to stay at a hotel around the corner near a leafy park on a bluff overlooking the Dnieper River.

Ukrainians are pleasant and friendly – somewhat like U.S. Midwesterners or Southerners. Ukraine used to be a farming dynamo until Stalin got involved. It also has some impressive industries, including advanced metallurgy and an aircraft plant that makes gigantic Antonov cargo planes. Tragically, it was also the scene of Chernobyl.

There’s been an underlying tension between western Ukrainians who felt much more in common with Western Europe and the east where Russians and their language prevailed. The friction, however, never got as intense as between Russians and, say, the Chechens or Central Asians. Ukrainians are very close in religion, language and color. There were rivalries and insults, such as Russians who dubbed Ukrainians “Hok-lee” which is a putdown of the Ukrainian language which is very close to Russian but has different inflections. Some Ukrainians hate being called “the” Ukraine because it means “on the edge” of Russia.

Vladimir Putin is a major player in today’s problems. Just as Ukraine was getting closer to the European Union in aid, trade and funding, Putin swept in with a $15 billion aid package. Putin is part of the old “Sil” or “forces” such as the KGB who have re-emerged in a new form, sort of like the robo-cop in the Terminator II movie. Continue reading →

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Posted in Business and Economy, Disasters and Disaster Preparedness, Economic development, Electoral process, Environment, Planning, Politics, Poverty & income gap

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