Bacon's Rebellion

While I’m no fan of Gene Nichol’s policies at William & Mary — I totally share the concerns of certain members of the House of Delegates about the decisions the college president has made — I’m not sure that hauling members of the W&M Board of Trustees into the General Assembly for questioning is a good idea either.

As Olympia Meola reports for the Times-Dispatch, “Delegates spent 90 minutes yesterday grilling four members of The College of William and Mary’s board of visitors on their view of recent school events, including the Sex Workers’ Art Show, and their intentions for the future.”

I am very uncomfortable with the idea of the General Assembly micro-managing decisions made by Virginia’s college presidents — even when I happen to agree with the delegates on the issues concerned, and even though I have frequently argued in this blog that universities are largely unaccountable to anyone other than their own internal constituencies. As the same time, I worry that politicizing college decision-making could be a cure that’s worse than the disease.

The governor, if I am correct, has the power to appoint the trustees to the boards of Virginia’s public colleges and universities. If W&M trustees back up the president, what can you do? Elect a governor who will put trustees with a different philosophy onto board.

Otherwise, the impetus for accountability should come from college stakeholdersm not from politicians. Recent events at the University of Richmond, a private institution, were noteworthy: An unpopular president was recently unseated by alumni who rose up in revolt and threatened to stop contributing, thus jeopardizing fund raising. Why can’t W&M alumni hold the Nuckol administration accountable, as some already have, by voting with their pocketbooks?

Now that Sen. Richard Saslaw, D-Fairfax, is top dog in the state Senate, the General Assembly is getting a lot more entertaining. Last month, the Senate majority leader characterized Southwest Virginia gun rights zealots as Deliverance creatures (see “Quote of the Day: But First Cue the Banjos“). Once again, to paraphrase Britney Spears, oops, I think he’s done it again.

Concerned about deteriorating tax revenues, Gov. Timothy M. Kaine is putting a freeze on state hiring — and may consider more layoffs, reports Jeff Schapiro with the Times-Dispatch. “Anything is possible; everything is on the table,” Kaine press secretary Gordon Hickey said of firings, which have been limited to less than 100 so far.

By way of background, the number of state employees classified as “General Funded” (which, I presume, means funded by the General Fund, which excludes university employees and other groups over which the governor has little authority) stood at 39,420 in Jan. 2006, when Kaine became governor. By Nov. 2007, the number had risen to 40,788 — an increase of 3.5 percent in note-quite two years.

Given the surge in state spending, that increase in employee count doesn’t sound unreasonable. On the other hand, much of that surge was programmatic — spending on state aid to schools, Medicaid and the like, which should not take many more employees to administer. Also, the increase in the number of state employees should be compared to employment trends among large organizations in the private sector. I can’t readily find any productivity numbers for the service sector, but my sense is that most service-sector companies the size of the Commonwealth of Virginia are reducing employee count, not raising it.

Admittedly, the productivity (or lack of it) of the state workforce cannot be laid exclusively at the feet of Tim Kaine, who inherited an organizational culture that, for many reasons including oversight by the General Assembly, is highly resistant to change. But it is appropriate at this moment of Virginia’s fiscal history to ask: Where are the productivity gains promised by the reorganization of the state’s IT functions? In theory, Virginia is supposed to be saving lots of money on IT spending and equipping its employees to do their jobs more productively. Is that happening?

How is the Virginia Information Technologies Agency working out? Is it over the hump in its difficult reorganization? Is its quasi-independence from the executive branch proving to be a help or a hindrance? Is the contracting out of major functions to the private sector creating the promised benefits?

Inquiring minds want to know.

Here’s the lede and headline in Peter Bacque’s story in the Times-Dispatch about bridges in Virginia with structural problems: It will cost $3.5 billion to replace them all, just a half billion dollars shy of the Virginia Department of Transportation’s annual budget.

Sounds like a crisis! Ready to panic yet?

Here’s the less alarming news that appears in the body of the story: First of all, bridges that are “structurally deficient” are not necessarily “unsafe.” Second, the proportion of problem bridges in the state has been slowly, but steadily, getting smaller during the past 12 years, and is below the national average. This year, VDOT will spend about $150 million to maintain and repair the state’s bridges.

Bottom line: For $150 million a year, or about 1/3 of one percent of VDOT’s budget, we’re slowly working our way through the backlog of bridge repairs. There is no cause for alarm.

The debate over payday lending is getting surreal. Posing as populist champions of the little guy, Republicans in the House of Delegates want to regulate the payday lending industry. They are aligning themselves on this issue with the likes of the Virginia Organizing Project and the Virginia Poverty Law Center. Meanwhile, industry lobbyists are looking to Sen. Richard Saslaw, the Democratic majority leader in the state senate, to save them.

In the latest iteration of the debate, the House Commerce and Labor Committee has approved a “compromise” that would impose regulations somewhat less onerous than those demanded by the industry’s most vocal foes. In addition to capping annualized interest rates at 36 percent, the legislation would allow payday lenders to charge 10 percent loan origination fees and verification fees of up to $5.00.

However, the bill would impose significant restrictions on lending. No borrower could have more than one outstanding loan at one time (ending the practice in which borrowers would obtain loans from competing vendors, sometimes juggling two, three or more loans at one time). Additionally, no one would be allowed to take out more than five payday loans over a year, and there would be a 24-hour cooling off period between loans.

While the R’s may be billing the bill as a “compromise,” it’s not clear exactly who compromised with whom. Apparently, the industry still opposes the legislation. Reports Jeff Schapiro in the Times-Dispatch: “In a hearing room filed with money store employees, lender lobbyist Reginald N. Jones said lawmakers were threatening the jobs of 2,400 workers at the state’s 800 payday-lending outlets, which last year dispensed nearly $1.5 billion in small loans.”

With the bill likely to pass the full House, the hopes of industry lobbyists now focus on Saslaw, who heads the Senate Commerce and Labor Committee and is widely perceived as being “pro business.”

Adding to the weirdness, former Gov. Jim Gilmore congratulated House Republicans for the compromise, and took the opportunity to jab Mark Warner, his rival for John Warner’s expiring U.S. Senate seat. Said Gilmore: “It is no secret that payday lending stores opened under the leadership of Mark Warner and the bill he signed into law. Their loans are deceptive and they should at a minimum be held to the same standards as other small-loan lenders operating in Virginia. Mark Warner’s decision to adopt this policy was wrong.”

To repeat my position on payday lending: I support marketplace transparency and the prevention of fraud. Payday lenders should fully explain interest rates and fees to borrowers. The law should ensure that consumers fully understand the terms and conditions of their loans. Otherwise, lawmakers need to butt out. If consumers can find better terms elsewhere — from family, friends, churches, banks, loan consolidators, wherever — they are highly motivated to do so. The General Assembly, egged on by a bunch of pious do-gooders who won’t suffer the consequences if payday lenders shut down and deprive borrowers of options, has no business setting the terms of loans.

The Republican Party, it appears, has abandoned the principles of free enterprise that it once embraced. If that leaves the Democratic Party as the standard bearer for free markets, then we’re pretty much all doomed.

The war against the much-dreaded and thoroughly feared side boob, has been temporarily avoided:

It seems Sens. Cuccinelli and Peterson have run into a roadblock on their way to greater budgetary transparency. In his newsletter, and in his inimitable style, Ken shows us that at least one of his Senate colleagues, Sen. Edd Houck, thinks we’ve got all the transparency we need right now, thank you:

In our debate on the bill, he said that he doesn’t see any problem with how open our government information is today. Now, remember, Sen. Houck is a Senate Budget Conferee! He has been in the Senate for over 25 years and he has Finance Committee staff at his disposal for his own self-education on budget matters. Do you have that? I didn’t think so.

Sen. Houck went on to say that he was offended by the notion that we needed the bill, as putting in the bill implied that Virginia government was somehow not open and transparent already (I’m not kidding. I mean, I’m funny, but I can’t make this stuff up…). Virginia legislators, much less citizens, cannot find much budget or expenditure information online that’s worth the effort, and it certainly isn’t out there in any organized fashion that makes sensible research possible (forget easy, let’s start with possible…).

I wonder if Senator Houck would accept a challenge to take 10 minutes of his time to see if he can demonstrate that he can in fact find anything about specific expenditures via any online information now available from Virginia Government? Hmmm… I’ll ask. I’ll let you know what I hear back.

Ah the Senate… no matter which party is in charge, it’s the grandees who oversee the budget that have the real power. And it seems they are unwilling to allow even the palest glimmer of light to intrude on their fiefdom.

I continue to be fascinated by the e-mail missives sent out by Richmond Mayor L. Douglas Wilder as he bypasses the Mainstream Media to take his case to the public. His weekly “Visions” newsletter contains data that often gets filtered out in space-constrained news stories, as well as video sound bites that the televisions don’t have time to run. The merits of his arguments aside, the newsletter is one of the more sophisticated uses of digital media that I’ve seen employed in Virginia government. More savvy, even, than the communications coming out of the Governor’s office.