Author Archives: Steve Haner

Shrinking Community Colleges Looking to Pivot

Germanna Community College

Nothing like losing a quarter of your customers to get your attention.

That basically is what has happened to Virginia’s Community College System, with last term’s enrollment down 57,000 (actually only 22 percent) from its peak six years ago during the early days of the economic recovery. That drop exceeds the total enrollment at the 17 smaller campuses and has cost the institutions millions in revenue and forced personnel cuts.

Chancellor Glenn DuBois and two of the community college presidents shared that information and spent about an hour Tuesday with the State Council of Higher Education for Virginia laying out steps underway to attract more students, which will have to happen if Virginia is to meet the goals it has set for degrees and work certifications.

DuBois, who has served as chancellor since 2001, spoke again during the meeting at Richard Bland College of his vision of “a college graduate in every household” and of abolishing the phrase “first-generation student.”

One response has been only modest increases in VCCS tuition and fees for the coming year, at 2.5 percent below the official inflation rate and in stark contrast to the four year institutions. The annual cost for a full semester load is around $5,000, but DuBois noted that is still a great deal of money for many Virginians. Students in the community colleges are older, lower income, working part time. Fifteen of the 23 schools have food banks.

Like many of his predecessors, Governor Ralph Northam has made education and workforce development a high priority and Northam talked during his campaign about lowering or eliminating the cost of attending the public community colleges. About 20 states now have some version of a “promise program” where all or some high school graduates face no tuition bills at community colleges.

DuBois said that remains under discussion, which was confirmed a bit later in the meeting by the Governor’s Chief Workforce Advisor Megan Healy. But with a price tag in the hundreds of millions of dollars, “I don’t think that’s going to happen this year,” Healy said. In 2019 the General Assembly will be considering budget amendments, but the Governor doesn’t do his own full budget until 2020.

Absent a sudden commitment to free or almost free tuition, a VCCS task force responding to the situation focused heavily on marketing and process improvements. They are leaving the comfort zone, DuBois said, using words like “pivot” and “evolve.”

What if students didn’t have to apply to attend? The system is working on an open enrollment approach, but it isn’t there yet. It is making progress on reducing the paperwork and migrating the application process to smart phones. People should enroll in one day, “one and done,” said President Janet Gullickson of Germanna near Fredericksburg. “Believe it or not, that’s radical.”

The task force also said to make scheduling, degree planning, advising and even payment and financial aid compatible with the mobile environment. An early alert system can flag a struggling student, so a counselor reaches out to them rather than the other way around.

Do people understand how an associate degree or even a workforce certificate can boost their income? Better marketing may spread the word about the FastForward program which offers reimbursement grants on completion of a workforce credential. The grants “sold out” in their first two years and the General Assembly boosted the funding for this new budget, which may sell out again.

The target audience is no longer 18 to 24-year-olds. DuBois mentioned a Winchester man who lost his long-time job at a recycling center, came to the community college looking for his GED, but in 12 weeks earned a manufacturing technician certificate. He quickly landed a job with 40 percent more pay and, for the first time in his life, full benefits. He will be highlighted as the 10,000th FastForward graduate.

Another popular certificate program for forklift operations takes just four days. Before any of these programs is approved there is a demonstrated demand for the skills.

Gullickson mentioned a basic marketing problem she found at Germanna when she started – no one able to translate for Spanish students dealing with administrative matters. With the changing demographics in that region, the website needed a Spanish version, at an 8th grade reading level so the parents of potential students could understand it.

Work continues eliminating remaining barriers or duplicate requirements for students seeking to start at a community college and then transfer to a four-year institution. There are state grants for that process, too, which not long ago was getting the most attention as a new role for the community colleges. But based on comments Tuesday, the long-term response to the current challenge may be a system that looks more like its original 1960’s focus on workforce training.

Virginia Tuition Hikes Exceed Inflation Again

Cost of attending a four-year state college as a percent of household income. Click for interactive version. Sources: Penn and Vanderbilt

Tuition and mandatory fees at Virginia’s state colleges and universities are rising an average of 5.3 percent for the term starting next month, eighty percent faster than inflation.  The increase at the state’s community colleges for next term of 2.5 percent tracks well behind the current 12-month consumer price index (2.9 percent).

The report is contained in advance materials for the July 17 meeting of the State Council of Higher Education in Virginia. Director Peter Blake reports tuition and fees will increase by an average of $669 at four-year institutions and $113 at Virginia’s community colleges under charges set recently by the institutions’ governing boards. Increases range from $330 at Virginia State University to $1,100 at Christopher Newport University. “The systemwide increase is slightly higher than the increases in the previous two years,” he wrote.

2018 tuition and fee hikes. Source: SCHEV

Looking at tuition alone, the average increase is just under 6 percent, but smaller growth in mandatory fees softens that a bit.  Four years at the College of William and Mary will cost a new freshman paying the full freight almost $94,000 (before room and board), but at that school each incoming class’s in-state tuition rate is fixed for four years. A new in-state student at the University of Virginia will need at least $66,000 for four years but may face three more tuition hikes before graduation.

Christopher Newport University in Newport News had the largest overall increase on a percentage basis, 8.1 percent, and the new cost of four years there for new in-state students is $59,000 (again, with further increases likely.)

Out-of-state price compared to cost. Source: SCHEV

Out-of-state students pay substantially more in tuition than the cost of their education, according to another chart in the SCHEV data. It is more than double at some schools, and close to double at others. The pattern between Virginia and William and Mary reverses, with Virginia charging the higher premium for non-Virginia residents.

The state provides more than $2 billion annually from taxpayers as direct support for the schools or financial aid for individuals. The General Assembly increased General Fund support for the schools by more than $165 million in the new budget, but with most of the additional dollars in the second year of the budget starting July 2019. The increase for the coming school term for operations and aid was a modest $17 million. Much of the new money over the period is going to things unrelated to classroom instruction.

On Friday SCHEV sent out a news release focused on University of Pennsylvania data showing that Virginia’s higher education system faces lower risk than almost all other states. Whether that is because of Virginia’s strength or weaknesses in other states is unclear. It still warned Virginia’s population would not have the needed number of degree or certificate holders by 2025.

Virginia’s 4th graders were highly-ranked compared to other states on the National Association of Educational Performance but only 47 percent were proficient or better in mathematics, and 43 percent proficient or better in reading. By 8th grade those were down to 38 and 36 percent.  In four years those 8th graders are the college admission pool.

The Penn report ranked Virginia 41st on affordability. It included interactive charts comparing the affordability of state systems across the country by comparing costs to average household incomes. Cross-referencing the recent CNBC business network’s Best States for Business ranking, Virginia and Massachusetts had the highest costs on that basis among the top ten states, at 32 percent of household income. Five of the ten had costs at or below 25 percent of household income, with Florida the lowest at 20 percent.

Virginia’s community colleges, which are seeing significant enrollment declines, cost only 17 percent of average household income. That is right in line with most of the other top-ten states in CNBC’s list, with Colorado and Minnesota the most expensive for two-year degrees.

A debate continues to rage over whether rising school costs are driving away students, but the Virginia schools under the largest enrollment pressure, the community colleges and the two historically-black institutions, stand out in the SCHEV data lower overall costs, lower cost increases, and lower mark-ups for out of state students.

SCC Examiner Rejects Dominion Tax Argument

A State Corporation Commission hearing examiner has rejected Dominion Energy Virginia’s arguments that it was correct to ignore a lower federal income tax rate in calculating transmission costs for 2018 and is recommending that the full commission give ratepayers the benefit of the lower tax rate immediately.

Chief Hearing Examiner Deborah V. Ellenberg’s ruling was issued July 9, following a June 29 hearing where Dominion employees said it had to use the 35 percent tax rate in calculating bills running into 2019, even though the federal corporate income tax rate had dropped to 21 percent effective January 1 of this year.  This was the subject of an earlier Bacon’s Rebellion post.

At issue is the rate adjustment clause (RAC) known at Rider T1, which passes along to customers the utility’s cost for transmission services.  It is one of several elements on monthly bills and the utility was seeking a substantial increase.  Dominion had put the higher monthly cost for a residential customer using 1,000 kilowatt hours at more than $4, with higher amounts hitting larger customers.

At the hearing Dominion argued that the T1 rate is driven by a formula approved by the Federal Energy Regulatory Commission (FERC) that includes as a factor the base federal rate, and it had to plug in the higher previous tax rate because it hadn’t consulted with stakeholders since the tax rate had changed.   Consumer advocates at the hearing said there was no prohibition on correcting the rates based on the new tax rate.   The hearing officer agreed.

“I find it disappointing that the Company has taken the position that the revenue requirement should include a 35% federal income tax rate that is no longer in effect rather than incorporate the significantly lower tax rate made effective even before the Company made its informational filing with the FERC in January 2018, and well before it filed this Application in May 2018,” she wrote. “It could, and should have, like other utilities, revised its annual filing to include the known and certain tax rate change. I recommend the Commission direct the Company to file a corrected annual filing with FERC effective January 1, 2018.”

The RAC tariff in question is due to be adjusted September 1 and stay in place 12 months.   Ellenberg suggested that the full commission adjust the new rate to reflect the lower taxes, saving consumers $71 million during the period.  She also suggested an additional reduction of $46 million to reflect the lower tax liability during the first eight months of 2018.  Dominion was arguing that consumers would have to wait until the true-up process in future cases to see rates adjusted to reflect the lower tax rates.

Ellenberg ruled against Dominion on a second point, involving a $13 million credit being paid to Dominion by the regional transmission organization PJM.  Dominion argued that payment was for generation services at its Yorktown plant, which is staying open longer than planned.  Ellenberg agreed with the SCC staff, the Attorney General and other consumer advocates that the payment was for transmission services and should reduce the revenue requirement for Rider T1.  The cost of operating Yorktown is fully recovered in base rates and the fuel charge.

If the full commission adopts her recommendations, Dominion’s request for $755 million for Rider T1 over the next 12 months will be reduced to $625 million, which is about the same as was approved a year ago.  That wipes out the 20 percent increase requested by the utility, with any increase in transmission costs being balanced by the lower taxes.

Back In Top 5, The Challenge Is To Stay There

Corks are popping all over Richmond as the business network CNBC announced this morning that Virginia is back in the top five of its annual survey of best states for business, ranking number 4.  It is the only state in the top five east of the Mississippi. The full Virginia report is here.

The photo on the CNBC page shows a Huntington Ingalls-built warship, but one of the amphibious ships built in Pascagoula, Mississippi.  Perhaps the web designers remember that the first time Virginia topped this list as number one the announcement was made from pier 3 at Newport News Shipbuilding with the future U.S.S. George Bush in the background as Governor Robert McDonnell took the bow.

Governor Ralph Northam will get to enjoy the spotlight this time, and should, but the credit needs to be spread widely. The person doing handsprings should be Stephen Moret, president of the Virginia Economic Development Partnership, who has been focused on improving these rankings since coming to Virginia to fix a broken agency its reputation.

Speaker Bill Howell and the others who joined with McDonnell in pushing forward the transportation tax package years ago deserve a nod, as those projects are starting to come on line. Virginia’s rank for infrastructure improved from number 25 in 2017 to number 20 for 2018, and may continue to rise now.

Also improved over last year was the ranking for education. Despite growing costs Virginia’s higher education system, public and private, remains the envy of many other states, but the focus now extends beyond degrees to work-related certifications.

This ranking is a marketing coup with no immediate value to the average Virginian. Staying in the top five over time will have value, however, as more business location or investment decisions start with Virginia on the short list.

Looking at the details there are only a handful of individual categories where the state ranked extremely well (workforce, education, business friendliness) and only two where Virginia was below the median – the related categories of cost of living and cost of doing business.  First or second quintile scores in several categories resulted in the good overall score.

Those outliers deserve some attention. A huge component of the cost of living and cost of doing business is the cost of electricity and other forms of energy, and the trend lines there are bad despite the energetic public relations efforts of a certain large utility. Another huge component of both is state and local taxes, which are under growing pressure to rise and where Virginia has a chance to be creative thanks to federal tax reform.

Not a time for any resting on any laurels. But some martinis at lunch are indicated.

State Employees Not Funding Own Retirement

Source: VRS Report to JLARC

State and local employees, like many of their peers in the private sector, are declining in droves to contribute to their own retirement plans, despite the availability of matching funds, a.k.a. free money which compounds for decades.

The Virginia Retirement System has been putting new hires into a hybrid retirement plan that combines a defined benefit with a defined contribution plan which depends on employee contributions. More than 85,000 active workers are now part of the hybrid plan, but only 18 percent of those are socking away the maximum 4 percent of their pay, which is matched with another 2.5 percent by the state.

Of the rest, 42 percent are contributing nothing, and 36 percent are contributing  only one-half of one percent, or $50 per $10,000.  Most of those are apparently doing so because the state automatically escalated all contribution rates by one-half of one percent on January 1, 2017 and employees had to then intentionally opt out.

The information was part of the annual report on VRS to the Joint Legislative Audit and Review Commission Monday, covering all aspects of an operation vital to 700,000 participants or beneficiaries.  JLARC was presented with a brief oversight, a longer and more detailed overview, and the report of an outside actuary.

Since that first “automatic escalation” the participation has been dropping and it may continue to drop until a second auto-escalation is planned for 2020.  “Current low rates of voluntary contribution by hybrid plan members will result in lower retirement income,” the presentation slide states.   That’s a major understatement, but the hybrid plan and the low participation are saving the taxpayers a bundle in the short run and will save even more as the previous defined benefits plans fade away.

As of March 1, the overall year to date return was 9.9 percent, slightly behind the goal of 10.0.  No figure was given for the end of the fiscal year on June 30 and the last 90 days have been a trade fear-induced roller coaster.  The long-term return baked into VRS funding assumptions is 7 percent.  The five-year average has been 8.1 percent and the 25-year average 8.2, but as the saying goes, past results are not a guarantee.

The charts tracking the funding status of the various individual retirement plans were all inching up and the average overall is now about 77 percent.  Under current assumptions it will take 26 more years to get back to 100 percent funded, where the state was as recently as 2002.  The key phrase there is “current assumptions.”

“VRS is actuarially sound” concluded Lance Weiss of Gabriel, Roeder, Smith and Co. (GRS), the outside auditor.  He praised Virginia for setting that 7 percent target return a few years back, but then reported it is no longer a conservative assumption but merely a reasonable one.  Many of their clients are moving to 6.75 percent, he said.  A figure below 6.5 percent was hinted at.  With an aging workforce looking at starting benefits in the short term, there is even more reason for Virginia to rethink that 7 percent assumption on return.

The assumption on return is what drives the size of employer contributions.  In another report it was noted that if the two largest funds, those for teachers and for general state employees, moved to a 6.75 percent “discount rate” the state would need to increase its annual contribution by $182 million.  Changing that assumption also drives up the unfunded liability on both funds and pushes the 100 percent funded goal further out.

The reports today were merely accepted, with few hard (or easy) questions. It may take a longer period of market uneasiness to undermine the current return assumptions, but House Appropriations Chairman S. Chris Jones told reporters after the meeting he would consider it.

Senate Finance Co-Chair Thomas Norment did ask out loud if the hybrid plan was “worth keeping” but the question received no response.  The defined benefit plan is gone and unless participation patterns change future VRS retirees (86 percent of whom remain in Virginia) will not have the same comfortable income as current retirees.

“All Matters” Makes Lobbyist Reports Worthless

“Matters Related” phrase used to avoid specifics is blessed by Virginia Ethics Council example.

“With as much specificity as possible.”

That is the instruction given to Virginia registered lobbyists about how they should list the various “executive and legislative actions and procurement transactions” they seek to influence on behalf of their principals.   The instruction to be as specific as possible is routinely ignored and never enforced.

Most of the hundreds of annual lobbyists disclosure forms filed on behalf of corporations, unions, associations, and government entities reveal nothing about which bills, resolutions, budget items or appointments they sought to influence.  Most simply report working on “all matters related to” or “matters of interest to” that company or association or entity.  One Chamber of Commerce lobbyist replied simply: “business issues.”

It is hard to blame the lobbyists for being vague.  In the illustration above, which is from the official example provided on a state website for those filling out the form, the stock phrase “all matters related to….” is shown to be acceptable.

July 1 was the annual deadline for lobbyist filings and if you know how to maneuver on the database you can find them here.  Set the date range for 2017-2018 and then enter a name for the lobbyist or their principal, which can be a client or an employer.  Look for the disclosure reports.  There are still some reports missing but most are up.  (The data will also eventually be picked up on the Virginia Public Access Project lobbyist listings.)

A Glimpse Inside the Process

There are many filings which do list specific bill numbers where the principal’s views were communicated and some even go so far as to list specific budget items by number.  But even in those cases it is not possible to determine if lobbyist expressed support, opposition or sought to amend the bill.  In some cases lobbyists suggested, requested or actually provided the text of a bill or amendment – an important specific detail never reported.

So many of the reports fail to list bill numbers or other details that there is no point in singling out anyone for doing so.  Some of the largest and busiest law firm lobby shops routinely use the “all matters” or “matters related” phrase or something similarly amorphous.

An earlier post described the way some lobbyists evade reporting the names of officials and their families on their entertainment expenses by splitting the cost between more than one client to stay below the $50 reporting trigger.

This failure to require actual details on which bills, appointments or budget decisions are being influenced – ignoring what appears to be a clear instruction – is another weak spot in Virginia’s oversight.  Absent that information the reports are worthless.

Other sections of the reports deal with spending on communication efforts, with advertising, social media and direct mail becoming increasingly common in legislative battles.  How much out-of-town lobbyists spent on hotels for themselves, or whether they rented a locker or subscribed to the bill tracking service, are details which are included.  They are also details which do not matter.

The required information on compensation is also meaningless because most lobbyists pro-rate the amount based on the narrow percentage of their time spent in direct contact with legislators or other officials.   Again, the reports are worthless.

How much information about what bills drew the attention and effort of the lobbyists could be the subject of debate.  The lobbyists’ natural inclination would be to share nothing.  Open government advocates would want to know everything.  Right now “nothing” is winning.

Many of these lobbyists are working for state agencies or for local governing boards, school boards or authorities.  They are spending taxpayer dollars seeking to influence tax and spending decisions or changes to their client’s authority – undisclosed government-to-government lobbying on our dime.

The private company or association lobbyists use private dollars, but are often fighting proposed regulations or seeking for the law to give them an advantage over customers or competitors.  Many of them are seeking tax changes or spending items in the budget that will provide a benefit to them or their stockholders.

One of the most important discussions during 2018 has been about filling an open seat on the State Corporation Commission, still unresolved.  The SCC is the crucial regulator for multiple businesses in Virginia.  You may look in vain for a lobbyist who discloses talking to legislators about any candidate for that job.  Does that mean no lobbyist has weighed in?  Unlikely.

Any competent lobbyist can sit down at the end of the session and list the bills or issues worked in the previous weeks, and some record the specific meetings or communications. (Not all are competent, but that’s another issue.)  They know what they did, and in most cases their employers or clients have received regular reports, with full specificity.  Requiring a list of bills and issues that were worked on the report would not be onerous.

Tennessee License Suspension For Unpaid Debts Ruled Unconstitutionally Unfair to Indigent

Image credit: novacriminalattorney.com.

A federal judge in the Middle District of Tennessee has ruled that Tennessee’s practice of suspending a driving license to compel the collection of delinquent court debts is unconstitutionally unfair to poor people.  She has ordered Tennessee to stop and to start restoring the licenses of people who simply could not pay, but an appeal is likely.

Similar cases are pending elsewhere including one in Virginia which was dismissed but is going back on remand. More than 40 states use the method in some form.  I have not yet been able to find the judge’s written opinion on line, but back in March she issued a memorandum laying out her likely reasoning for a summary judgement in favor of the debtors.

“The fact that it is difficult to collect debts from very poor debtors is a reality faced by people and entities, both public and private, in a wide array of circumstances; indeed, it is a problem as old, presumably, as debt itself,” she wrote.

Also: “Tennessee’s system has the actual effect of imposing a harsher punishment on indigent defendants than on non-indigent defendants based solely on their economic circumstances. A non-indigent defendant has a choice: pay or lose his license. Drivers like (plaintiffs) Thomas and Hixson, they argue, have no such choice. The plaintiffs challenge this differential treatment as unconstitutional pursuant to 42 U.S.C. § 1983.”

The plaintiffs also argued that license suspension is not an option for the collection of private debts, only court debts, 1s further evidence it was not fair.

My introduction to this issue came as the lobbyist for several Virginia law firms doing collection work for various local courts. About five years ago, in budget language that simply appeared in a final state budget document, an additional 17% fee was tacked on to all accounts sent out for collection. The attorney who initially contacted me wanted to know where that anonymous proposal came from, in part because he knew it made it harder for debtors to pay up.

In response to the pending Virginia case, the Virginia Supreme Court directed local courts to allow payment plans that took the defendant’s ability to pay into account. It is not clear whether that was the case in Tennessee or if that is a solution it may propose. It is also not clear yet if that has allowed more Virginians to get their licenses back. It is estimated that one in six Virginians have lost their license over unpaid fines and fees (which do not have to be driving-related at all).

The harsh reality is that state and local governments love this revenue. More than $470 million in fines and fees were assessed in Virginia’s courts in 2017, and more than $200 million were judged delinquent. As high as the basic fines have become, the processing fees and interest magnify the problem in delinquent cases. An annual state report tracks the collection of delinquent fines by the clerks, local commonwealth’s attorneys, local treasurers and a small group of private collectors. It does not appear that collections dropped off in 2017 because of the payment plans.

The even harsher reality is the opponents of this system are right that it ultimately is counterproductive to expect somebody who cannot afford to pay to dig themselves out of debt without basic transportation, which for most means a car. The end of this approach may be in sight, although the judge in her initial memorandum didn’t believe the system was unfair in the case of people who did have the ability to pay. Who decides what, and who is poor enough to be protected from that collection method? It will probably just go away.

An Argument Straight From Wonderland

Step One: Reassure the oysters all is well.

In late December of last year, after a long debate pushed forward by President Donald Trump and covered on an almost hourly basis by the nation’s media, the Congress of the United States adopted a new tax code.  On December 22 it was signed into law, to be effective January 1, 2018.   On the business side the centerpiece was reducing the federal corporate income tax rate from 35 to 21 percent.

Almost two weeks after the law went into effect, on January 12, Dominion Energy Virginia filed paperwork with a federal agency and stated that it’s federal income tax rate for 2018 remained at 35 percent.  This (let’s use a nice word) incorrect statement would result in the company being able to knowingly overcharge customers for 12 months by an estimated $71 million, and to keep that money for an additional 12 months before making a rate adjustment to compensate in late 2020.

If you or I make a known-to-be-false statement to a federal agency to obtain money to which we are not otherwise entitled, and which we know we will have to give back, the word for that is not nice at all.  The FBI might show up on our doorstep.  We might get to see how Martha Stewart decorated her former cell.

That two-digit tax rate was a key point of discussion Friday in a hearing at the State Corporation Commission on Dominion’s request for the higher rate adjustment clause, Rider T1, for transmission costs.  The new transmission charge is the largest of many increases coming in several elements of your bills, as outlined in a story last week.

Dominion employees and lawyers argued that it was correct for them to use the old tax rate when plugging factors into a formula used to determine what customers pay for transmission.  Dominion pointed to a stakeholder process it uses to reach out to customers about changes to elements of that complicated formula.  It holds those meetings in September and has a self-imposed deadline of December 18 to settle on all the elements before making the January filing.

“Any changes should have been agreed upon by December 18” said a Dominion witness.  “There was not enough time.”

There was not enough time to strike out the number 35 and insert the number 21 and recalculate the formula, which was not used to make a rate application with the SCC until May?  For a decision not due until July or August?  Dominion’s legal position Friday was the formula did not ask for its actual tax rate, but for the tax rate which it had discussed with stakeholders four months earlier.  Any change to it in the meantime could not be corrected for another entire year.

One lawyer for consumers asked:  Did the witness think any of the customers would object to a formula change that would lower their future cost?  “I would not want to speculate as to what position customers might or might not have taken.”  That produced some laughter in the room.

In response to another set of questions the witness could not point to anything in the guiding documents preventing an amendment to the formula.  The witness did stress that the protocol called for an “annual” adjustment, and if the calculation was adjusted more than once it would no longer be annual.

The witness and Dominion lawyers kept pointing to language in state law that allows it to fully recover from customers whatever is charged to it by the Federal Energy Regulatory Commission (FERC) or by the PJM regional transmission organization.  In fact, the legislators explicitly stated that those charges are deemed to be reasonable and prudent and cannot be challenged by the SCC. But Dominion determined those rates itself by plugging in the false tax figure.  FERC approves the formula, not the rate – Dominion calculates the rates using the formula – and the formula asks for the current tax rate.

Don’t worry, the Dominion folks assured the hearing officer.  Yes, customers will be charged too much from this September until September 2019 (unless the Commission says no), but the excess dollars will be tracked and will become a credit on the account when the “true-up” process for that 12-month period becomes part of the discussion in the summer of 2020.  FERC directs an interest payment of 3.5 percent or so on over payments.

(If somebody is struggling to pay their bill in the first place, and puts it on a credit card or takes a consumer loan, is 3.5 percent the rate they will pay?  If a large customer didn’t give Dominion those dollars, might it do a little better with it than 3.5 percent?  What will Dominion earn on in over two years?)

It also came out in this hearing that the figure in question is almost $120 million, not $71 million, since the current Rider T1 rate also reflects the old tax rate.  The $46 million excess recovery for taxes for the first eight months of 2018 (January to August) will also be held by the company for another year, to become part of the calculation for next summer’s case.  The $71 million covers the subsequent 12 months until August 2019.

The state’s other major utility, Appalachian Power, made no complaints about too little time and is adjusting its transmission rider to correspond to the lower taxes, with FERC’s blessing.  Adjustments to account for the lower tax rate have been made in other 2018 Dominion rider cases and will be made to its base rates. One 2017 Dominion case that was closing down as Congress acted was re-opened by the SCC so an adjustment could be made.  Yet in this instance DEV stands firm – using the defunct tax rate was mandatory.

Perhaps somebody just thought up this clever argument and decided to try it.  Perhaps a favorable ruling on this opens a door for some other plan.  Don’t be surprised if an adverse SCC ruling on this point has DEV back before the General Assembly in 2019 tweaking the statute.  When Dominion  and the General Assembly get together, a favorite Lewis Carroll poem comes to mind:

A loaf of bread,’ the Walrus said,

Is what we chiefly need

Pepper and vinegar besides

Are very good indeed —

Now if you’re ready, Oysters dear,

We can begin to feed.’

Franklin Street Bike Lanes Coming Next to Residential Brook Road

Franklin Street facing toward Capitol Square. I waited hoping to see a bike. The white truck is parked in the former travel lane.

People who regularly drive downtown Richmond, including many of us who consider ourselves somewhat in touch, were surprised and initially confused by the new dedicated bike lane on Franklin Street that reduced vehicle traffic to one lane after the morning rush.

A similar configuration – except in both directions – is planned for Brook Road on the north side of the city, apparently without any provision for a second traffic lane during peak traffic times.  Unless word gets around in advance this time, the result will again be surprise and confusion.  If you don’t like what’s happened on Franklin you won’t like what happens to Brook.

Now in my tenth year of city living I’ve come to understand that as a driver I am morally inferior to bicycle riders, and my anachronistic ways are preventing the arrival of Utopia.  In nine years I have never once seen a bicycle rider pulled by a cop for running a red light or making an illegal turn, another sign they are a protected class.  They are a political force in a blue city.

The Brook Road plan is not new.  The engineer drawings are now almost a year old with construction coming up fast, but the City Council members who represent the area, Kim Gray and Chris Hilbert, have sponsored an ordinance to stop it.  That brought out bike enthusiasts for a sometimes-heated discussion with Hilbert at a June 28 town hall meeting.  The issue will come to a head in future City Council meetings.

People who use Franklin Street regularly are now aware that what was the left parking lane is for bikes only now and the left driving lane became a parallel parking lane (except between 7 and 9 a.m. weekdays).  The far right lane is also parallel parking.  Vehicles in the single remaining traffic lane are constantly having to stop when a driver ahead seeks to maneuver into or out of one of those parking spaces, and of course traffic is still impeded by the same set of lights and other reasons traffic stops.  Bikes of course still use the vehicle lane, too.

My main objection about Franklin, however, is I don’t see that many bikes at all.  I’ve seen some, but hardly a flow that justifies taking an entire paved lane for their exclusive use and limiting vehicles to one lane for 158 out of 168 hours in a week.  It will be the same on Brook, with thousands of drivers inconvenienced or endangered daily to benefit dozens of riders.

Franklin passes through a business district but Brook runs past several sections of single family homes, and a large apartment complex under construction right in the middle of the proposed stretch will double the residential population and boost traffic.  The stretch of Brook involved (from Gilpin Court near downtown to Azalea Avenue on the Henrico line) also crosses two busy east-west corridors, Brookland Park Boulevard and Laburnum Avenue.

New configuration of five-way intersection at Brook Road, Fauquier Avenue and Laburnum Avenue with dedicated bike lanes on Brook.

Hilbert mentioned the apartment complex as the main reason he has reversed his earlier support for giving bikers two of the four Brook Road lanes.   I live a block from Brook on the same block as that complex, and without that development I would be less alarmed.  Hilbert is concerned that the upshot will be much heavier traffic on the parallel Chamberlayne Avenue, which is mostly apartments and the main bus route in that direction.  He should also be concerned about Seminary and other side streets, which are purely residential and usually narrow.

The idealists think with the dedicated (and certainly safer for them) bike lanes and more mass transit options, usage will grow.  There are places where it is probably happening.  It might be that with another configuration, or a decision to eliminate parking along Brook in order to maintain two travel lanes, it can happen on Brook Road.   This time drivers may assert themselves.  Whatever the outcome, this time it needs to happen without surprise.

Now The House of Delegates Map Must Change

VPAP map showing 11 districts rejected by the court this week, and others likely to change along with them. An interactive version is linked.

The predominant consideration in a legislator’s mind in any effort to draw legislative districts is first, will I get re-elected and second, will enough of my friends get elected or re-elected so we can form a gang and control this place?  The third consideration is can we get this plan signed by the governor and (in Virginia) get it approved by the federal guardians of the Voting Rights Act?

Compactness, contiguity, community of interest – a strong stand in favor of those works well in campaign speeches. Close the doors and turn on the mapping software, however, and they’re back to numbers one, two and three. The third consideration, federal approval, may now leap to number one.

No piece of legislation has been more important to the rise of the Republican Party in the Old South than the Voting Rights Act, because with the creation of every “minority-majority district” the surrounding districts also change demographically. The South’s (and not just the South, by the way) racist efforts to suppress African-American registration and to draw districts that cracked, stacked and packed them to further dilute their political power brought a just and powerful retribution. The impact on black representation was strong and immediate, but so were the corollary benefits for Republicans.

In 1991 the Republicans were the minority in the Virginia House and were victims of a gerrymander. The only effective challenge put up was a GOP complaint to the U.S. Department of Justice involving the House seat then held by the late C. Hardaway Marks of Hopewell, parts of which could have been used to create a new minority-majority district next door. It was so ordered and Marks’ seat went red.

The 1991 plans on both sides created substantially more black majority districts and were the first legislative plans to maximize Section 5 compliance as then interpreted. Within a decade the GOP controlled both chambers. There were many reasons but the Voting Rights Act played a role.

Live by the sword, die by the sword. Judicial interpretation of Section 5 of that federal law is changing. A couple of years ago a federal court redrew Virginia’s congressional seats, effectively replacing Republican Randy Forbes with Democrat Donald McEachin. Now comes a 2-1 U.S. District Court ruling that as many as 33 of 100 House of Delegates seats need to be redrafted because the Republican mapmakers used a fixed 55 percent minimum for the black voting age population (BVAP) in 11 specific districts held by Democrats. The one-seat GOP majority in the House is now even more tenuous. (VPAP has done a marvelous map and the interactive version is here.)

The opinion and the dissent run to 188 pages, but the parts of the majority decision I read boil down to these sentences: “The state has sorted voters into districts based on the color of their skin” and speaking of the consultant used by the GOP: “Insofar as he sought to obtain partisan political advantage by splitting (precincts) in particular ways, he did so by relying on race as a proxy for political preference.”

Given the black voting patterns these days, which may be even more set in stone now than 40 years ago, it is hard not to see that as proxy. What has changed in 40 years is white voting patterns.

Since the initial passage of the Voting Rights Act, Virginia has elected one African-American governor, has twice elected an African-American lieutenant governor, and has twice voted for an African-American for president. The justification for the Voting Rights Act Section 5 requirements in the first place was a strong pattern of racial voting among white voters, strong enough that no black candidate stood a chance unless the district was tailored for his or her success. That is not today’s Virginia.

The ground was already shaky under that foundation by 1991, with Governor Douglas Wilder on the Third Floor and then-state Senator Bobby Scott of Newport News winning in a 65 percent white district. Neither Scott nor Wilder passed on the chance to demand 1991 plans with more minority-majority districts, however, and Republicans in the Senate cooperated with that desire and negotiated a map equally beneficial to them.

Reading the new district court majority opinion, the presumption that African-American candidates need that demographic boost still binds the action of the legislature, and the plan adopted certainly provided it. The problem was uniform reliance on that 55 percent minimum target, which was chosen after careful analysis of the voting patterns in just one legislative district – the rural Southside district held by Del. Roslyn Tyler of Jarrett.

The court accepted the arguments of the plaintiffs that every district needed its own analysis, and many could produce a district open to a black candidate winning with far less than a 55 percent BVAP. It noted that the Tyler district’s results were skewed by the presence of large non-voting prison populations, and by the fiercest pattern in the state of racial pattern voting by its white citizens.  The mandate to the General Assembly is go back and reevaluate all 11 other districts individually, change their lines and those of surrounding districts, and get it done by Halloween.

What wonderful timing for Democrats defending their U.S. Senate seat against a GOP challenger who might have interesting comments to make on the role of federal courts and the wisdom of the Voting Rights Act. That mandate and deadline will be appealed but now that is complicated by the coming period of a 4-4 Supreme Court until a new justice is approved and sworn.

Odds are very good this ruling will stand and the General Assembly will have a new House map for the 2019 election containing several Republican-held districts with higher numbers of African-American voters. Permissible “proxy” or not, the partisan impact is predictable.