Bacon's Rebellion

There are two standards in the governance/accounting world today: one for the public sector, one for the private sector. Under the rules of the Sarbanes Oxley Act, chief financial officers of publicly traded companies must certify that the financial results they report are accurate. If mistakes are made and financial statements must be recalculated, the company’s stock price usually takes a beating — and the CFO takes a whipping.

Then you have the public sector.

John Bennett, who functioned as “CFO” for the state of Virginia during the Warner administration, knew of a $137 million miscalculation in the state budget back in December but neglected to tell his boss, Mark Warner, or the incoming governor, Tim Kaine. The reaction? Not surprisingly, Republican legislators issued “howls of outrage” (to use a phrase in the Washington Post). Even Warner-loving editorial pundits conceded that Bennett’s action was a no-no. But now that Kaine has identified the problem and proposed how to fix it, the chattering classes seem quite content to move on. Yeah, yeah, it was a mistake, but there are bigger problems, so let’s get over it.

But Del. Tim Hugo, R-Fairfax, among others, isn’t ready to “get over it.” As he rightly observed: “If you were in the private sector and did this, these people would be facing serious consequences.”

Now, I don’t know whether or not people in the Warner administration intentionally covered up the transgression, as some have suggested. But I share Hugo’s view that the incident needs to be investigated — with the proviso that it not be turned into a partisan excuse to bash Bennett or the Warner administration. The problem, I suspect, transcends partisan affiliations.

Somewhere along the line, Bennett failed to communicate a highly significant piece of information. In my experience in the business world, communications breakdowns are rarely due to deviousness or ill will. In this case, the breakdown appeared to have been connected to the transition from one management team (Warner’s) to another management team (Kaine’s). It’s conceivable that laziness or negligence was a factor — perhaps Bennett was itching to wind up and move to his next job — but the purpose of any hearing should be to correct the structural flaws in the budgetary process. The goal should be ensuring that the error is never repeated, not to hang Bennett.

However, because there seems to be a complacent attitude in the press — $137 million accounting errors in a $60 billion state budget really aren’t that big a deal, unless, of course, it had been committed by the Gilmore administration, in which case the scandal would be flogged for months — the momentum may never build to hold those hearings. We’ll have to wait for a Republican administration to make the same mistake — I’m under no illusions that Republicans are somehow exempt from committing such blunders — for the press to work itself into a lather.

William H. Abeloff, the visionary who transformed the urban landscape of the city of Richmond, died at home yesterday. He was 71.

In 1981, when everyone else had written off downtown Richmond as a place to live, Abeloff bought his first parcel in Tobacco Row, a string of abandoned tobacco warehouses overlooking the James River. By 1991, he had renovated the first warehouse into a 260-unit apartment building. Today, a much-expanded Tobacco Row anchors the thriving, mixed-use Shockoe Bottom district, a vibrant center of the advertising-marketing-communications industry and the most popular entertainment district in Central Virginia.

After selling his interest in Tobacco Row, Abeloff then laid the legal groundwork for Rocketts Landing, another urban revitalization project, just downstream from Tobacco Row. His crucial contribution was persuading Henrico County to re-write its zoning code to allow urban, mixed-use development. This unsung achievement has inspired a half dozen or more major mixed-use development projects in Henrico. Like Rocketts Landing itself, none of these projects has yet been built, but they are in the development pipeline, and they represent a marked reversal from the traditional pattern of scattered, disconnected, low-density sprawl.

Abeloff was an old-school Southern gentleman, charming, courteous, gracious. His death is a great loss. But he couldn’t ask for a more enduring legacy: a vital, transformed Richmond riverfront.

(Credit for Tobacco Row photo: Forest City Washington.)

In a blog conference held this afternoon, Gov. Timothy M. Kaine laid out his expectations for the upcoming transportation session of the General Assembly. Abandoning the proposal he pushed earlier this year to raise taxes by $1 billion a year, he will focus on areas of common agreement with the Senate and the tax-averse House of Delegates.

The Governor said he hopes to make progress in three broad areas: (1) reform and privatization of the Virginia Department of Transportation; (2) making the connection between transportation and land use planning; and (3) bolstering stable, ongoing transportation funding through the dedication of more modest revenue streams than he’d proposed earlier this year.

VDOT reform. VDOT has made significant improvements in delivering construction projects on time and on budget, but that’s just a start. Kaine said he expects to see more construction performed under public-private partnerships, and to see an increase in the percentage of road maintenance conducted by private contractors. He anticipates additional VDOT reform bills to surface in the special session.

In a related matter, he said, “you’ll see some announcements on personnel that will take the reform issues further.” (The Governor is expected to announce his selection for the permanent VDOT commissioner after Labor Day.)

Land use. The Commonwealth has “turned a corner” in making the connection between land use and transportation, Kaine said. He has appointed a “community development” sub-cabinet — encompassing the secretariats of Administration, Commerce & Trade, Transportation and Natural Resources — to look for ways “to do planning in different ways than we did in the past.”

Kaine refused to divulge details of any new land use-related legislative initiatives, but he did mention one previously announced issue that he wants to solve: What are the circumstances under which the state accepts subdivision roads into the state road system?

When local governments approve zoning changes or amend their comprehensive plans, they can create new road-maintenance obligations for the state. “A private developer builds the road, then the roads come into the state system to be maintained in perpetuity,” Kaine explained. About 200 miles of road are added to the state highway system each year that way. As maintenance expenses soar, cutting into funds available for new construction, the state has little say about the new obligations it’s forced to take on.

In a related issue, Kaine said that the issue of VDOT subdivision road standards also is “actively under contemplation.” It’s a rare topic upon which builders and environmentalists agree: VDOT standards for road widths are too wide. Builders complain that the roads are expensive to build, while environmentalists contend that wide roads and cross-walks make it difficult to create pedestrian-friendly communities. “Are we being rigid without a real purpose?” asked Kaine rhetorically. “It’s fair game for analysis.”

Dedicated funding streams. “There are ‘free lunchers’ who think we can have a B+ infrastructure on a D+ revenue stream,” Kaine said. “They’re wrong. You’ve got to have reliable resources to do it.” But he acknowledged that House Republicans aren’t likely to budge on his desire for $1 billion in new taxes. He does think, however, that it is possible to reach consensus on some smaller revenue streams. Dedicating automobile insurance premiums and traffic abuser fees to transportation, and supplementing them with General Fund surplus funds, could inject a meaningful amount of money into the transportation system.

Additionally, the Governor sees promise in proposals to create regional transportation solutions that draw upon a combination of regional taxes, local fees and tolls — with all revenue to stay within the region. Such an approach could make a big difference to Northern Virginia and Hampton Roads. Regional plans are not sufficient in themselves to address all the state’s problems, especially in places like Southwest Virginia, but they can be part of the solution.

In sum, Kaine said, “Let’s focus on the areas where we agree.” A number of people are pessimistic that the special session will yield anything meaningful for transportation. “I’m not among them. We have an opportunity to make some great things happen. I’m certainly more optimistic than I was 60 days ago.”

Update: Vivian Paige has an good wrap-up of the blog conference, covering topics that I didn’t address in my post.

As a follow-up to our recent articles about Prince William County transporation and land use planning…

Prince William County, much to its credit, surveys its citizens every year to gauge their satisfaction with county amenities and services ranging from public safety to help for the elderly, waste management to voter registration. The 2006 telephone survey of 1,439 randomly selected individuals is overseen by a third party, Dr. Thomas M. Guterbock, a University of Virginia sociology professor. (View the report.)

The overall picture is very positive. States the 2006 report: “Prince William County residents are on the whole very satisfied with their County government and quality of life.” On most items, changes since the baseline survey of 1993 have been positive. Among the critical indicators, satisfaction with the county’s “value for tax dollars” is up 11 percentage points since 1993.

(As an interesting aside, blacks and Hispanics consistently gave higher rankings to the County’s quality of life than did whites. Income was not a significant variable in influencing opinions.)

However, there are two major exceptions to the happy picture: land use and transportation. States the report: “Satisfaction with how the County is doing in planning how land will be used and developed … is down 9 points.” As a generality, the longer residents have lived in Prince William, the more dissatisfied they are with the way growth was outpacing the County’s ability to accommodate it.

Remarkably, only half the residents pronounced themselves dissatisfied with traffic conditions; half actually declared that they were “satisfied” or “very satisfied.” There were pockets of deep discontent, however, in North County, Gaineville/Linton Hall and Brentsville.

The Prince William Conservation Alliance drew these conclusions in a press release commenting on the survey:

This years’ survey reports that only 39.6% of citizens say they are satisfied with in-county travel conditions. This is an 18 point drop since 2002, and a 23 point drop since 2000.

This steady and statistically significant decline in citizen satisfaction with in-county travel is perhaps especially troubling because it coincides with the time period during which Prince William invested substantial amounts of local tax dollars to construct new and improved roads.

Prince William’s 2006 Citizen Satisfaction Survey continues to show declining citizen confidence in land use planning, growth and transportation processes. This information echoes the visible and growing consensus that we cannot build our way out of traffic congestion.

There’s a cool profile in the Richmond Times-Dispatch today about Chuck Frederickson, the river keeper for the 340-mile James River. As a member of the James River Association staff, he plies up and down the tributary in his 23-foot skiff looking for fish kills, algae blooms and other signs of pollution. By publicizing his findings, he lights a fire under regulators to move quickly on the problem.

Every major body of water in Virginia needs a James River Association and a Chuck Frederickson.

(Photo credit: The Virginia Severe Weather Page.)

The Kaine administration’s transportation policy appears to be in disarray. Here it is, more than a year since the resignation of VDOT Commissioner Philip Shucet, and the Governor has yet to select a replacement. The search has been narrowed to three or four candidates, and an announcement is expected soon. The Warner administration, by contrast, had this key position filled within a few months.

Meanwhile five of 17 positions on the Commonwealth Transportation Board expired at the end of June, and the Kaine administration has yet to replace any of these hold-overs from previous governors. Unlike most state boards and commissions, the CTB exercises real power: The board approves VDOT administrative policies and allocates construction dollars. If Gov. Kaine wants to align transportation and land use planning, he needs CTB board members who share his philosophy.

Peter Galuszka, one of our Road to Ruin writers, has the story, “Who’s In the Driver’s Seat?”

Gov. Kaine declared 2006 to be the “Year of Transportation.” But look what’s happened — or, rather, not happened. Breaking his campaign promises, he backed a huge tax increase for transportation — only to have the proposal soundly defeated in the General Assembly. If he’s got a plan for anything new planned for the special session of the General Assembly later this month, there’s no sign of it. Meanwhile, key transportation positions remain unfilled.

There are positive developments — as Bacon’s Rebellion has taken pains to chronicle. The Kaine administration is soliciting public-private partnerships to upgrade critical transportation corridors, and it’s developing new Corridor Management guidelines to increase capacity of existing thoroughfares. The Kainiacs also altered the debate over land use planning in Loudoun County when it released the VDOT traffic-impact analysis of the South Dulles rezoning proposals.

But these policies are only as good as the people implementing them. And right now, the Kaine administration is firing on only three cylinders.

Update: Kaine spokesman Kevin Hall has responded to our article and blog post. Read it in the comments thread of this post.

The Virginian-Pilot has acknowledged the role of Virginia’s blogosphere in reshaping Virginia politics, most recently in elevating Sen. George Allen’s “macaca” gaff into a full-fledged media feeding frenzy. The editorial also noted that politicians have begun courting bloggers — a trend made manifest by the appearance of high-profile elected officials at the recent blogger conference in Martinsville. (As a side note, Gov. Timothy M. Kaine is holding a “press” conference with bloggers later this week.)

“Judging by their traffic and their traction,” the editorial opines, “Virginia’s blogs are only going to grow in influence, a trend more than a few lament as they point out the blogosphere’s penchant for fierce partisanship and fact-free opinionizing.”

(Another side note: “Fierce partisanship”… “Fact-free opinionizing”… sounds like my critique of the the Pilot’s editorials about transportation and land use!)

But the Pilot concludes with a sound observation: “Judging the blogosphere by its worst members is like judging The New York Times by Jayson Blair, a foolish oversimplification. Over time, blogs will be judged by readers. Those who keep their facts straight and their analysis honest will thrive, while others will wither into obscurity. In the meantime, the more voices that are part of Virginia’s debates, the better off we all are.”

Gov. Timothy M. Kaine made some up-beat remarks in a speech to the General Assembly that the Richmond Times-Dispatch ignored in its coverage of yesterday’s events, perhaps on the grounds that it was insufficiently contentious. But I think his comments are worth repeating — occasionally, we need to remind ourselves that, as much as Virginians disagree about things, we agree about a whole lot more. Said Kaine:

It has been a year of remarkable achievements in Virginia.

In its first ever ranking of the best states for business, Forbes ranked Virginia first.

For the first time ever, Virginia’s “Rainy Day” fund is full.

Our public schools and system of higher education – once again – have been ranked among the nation’s best.

The nonpartisan Tax Foundation ranked Virginia 41st among the 50 states in state and local individual tax burden. Virginia’s business tax burden was cited as the nation’s lowest by the Council on State Taxation. And the U.S. Chamber of Commerce designated Virginia as one of the five top states for overall legal fairness.

Working together, we have ensured that Virginia remained one of only a handful of states that still carries the best-possible Triple-A bond rating.

Strong education, an attractive business climate, award-winning management, rock solid fiscal reliability—these traits combined have continued to produce strong job growth.

In fiscal year 2006, our state added 78,000 new jobs, 14,000 more than forecast.

Our unemployment level remains low – 3.3%, a full point-and-a-half below the national jobless rate.

It’s true, Virginia is in pretty darn good shape. Our strong finances and superior economic performance are no accident.

OK, the time-out is over. Let’s get back to fighting…

At long last, Virginia is on the verge of repealing its death tax. The Senate and House of Delegates finally found something they could agree upon, passing compromise legislation yesterday. Gov. Timothy M. Kaine has indicated his support for repeal, so his signature should be a formality.

As Death Tax foes have argued, the tax on inherited estates posed a huge burden to farmers and family businesses. Having already paid taxes on salaries, profits and dividends for years, family business had to pony up one more time, often by taking on a crippling load of debt or selling the land/enterprise outright.

As House Speaker William J. Howell, R-Stafford, said in a press release yesterday, Virginia’s top-rated business climate just got better. Citing the state’s Number One “Best State for Business” ranking by Forbes magazine, he said: “Repealing unfair taxes and improving our regulatory framework are precisely the kind of positive state tax and regulatory actions enacted over the past decade and more that enabled our Commonwealth to garner this latest accolade.”

Reader Rob Jackson calls attention to an article in today’s Wall Street Journal about the experiment in Stockholm, Sweden, with congestion pricing. It seems that the Swedes, for all their skill in urban planning and their investments in mass transit, are suffering from traffic congestion. Better yet, they’re adopting a market-driven remedy. Socialist though they may be, Sweden’s politicians apparently have a firmer grasp of economics than Virginia’s.

The Greater Stockholm region has nearly two million people. The central city, built upon an archipelago of islands linked by bridges, is particularly prone to congestion. Under contract with IBM, the national government has set up 23 tolling points which, used in conjunction with transponder boxes, laser detectors and cameras, tracks the path of every car in the city. Each time a car with a transponder passes through a toll, the charge is automatically deducted from the driver’s bank account. Tolls vary at different times of the day according to the level of congestion, ranging from the equivalent of $1.38 to $2.76 per hour.

The goal was to alter motorist behavior — and that’s exactly what has happened. Rather than drive to and from work at the same time every day, some Stockholmites (Stockholmers?) are varying their commuting times. Some are taking different routes. Some are riding bicycles. And many are availing themselves of mass transit. As the WSJ explains:

Before the trial began, Stockholm spent about $180 million on improvements to public transportation. It bought about 200 new buses and added rush-hour trains, express bus routes and more park-and-ride lots. But the changes had little impact on the number of people who left their private cars at home. In spring 2006, however, during the trial, use of all forms of public transportation jumped 6% and ridership on inner-city bus routes rose 9%, compared with a year earlier.

Now that the six-month trial has ended, the city has scheduled a referendum to let voters decide whether to make the congestion-pricing scheme permanent. A June poll found that 52 percent of voters favored the plan.

So far, the idea of congestion pricing in Virginia hasn’t gotten past the talking stage. It strikes me as remarkable that our transportation policies are more socialistic than Sweden’s.

So much to blog about and so little time — I’m still catching up from vacation. Well, here goes…

Reader Tobias Jodter recommends to our attention an Aug. 27 article in the Washington Post describing the housing crisis in the suburbs. Writer Michael Grunwald gets straight to the point in the first paragraph:

In the past five years, housing prices in Fairfax County have grown 12 times as fast as household incomes. Today, the county’s median family would have to spend 54 percent of its income to afford the county’s median home; in 2000, the figure was 26 percent. The situation is so dire that Fairfax recently began offering housing subsidies to families earning $90,000 a year; soon, that figure may go as high as $110,000 a year.

Grunwald clearly understands that the problem isn’t simply a lack of affordable housing — it’s the location of the affordable housing.

The root of the problem is the striking mismatch between the demand for and the supply of affordable housing — or, more accurately, affordable housing near jobs. … when Fairfax housing officials gave me a tour recently, they told me many of their employees now drive a full hour from Warrenton in Fauquier County. The media officer interjected that she drives nearly two hours each way from Winchester in Frederick County. The driver said he lives in Winchester, too.

In other words, housing that is “affordable” to blue-collar and pink-collar families is not “accessible” to their jobs. What homeowners save in mortgage payments, they bleed in the cost (more than $.50 per mile) and time associated with commuting. Grunwald even understands the root causes of the problem:

Minimum lot requirements, minimum parking requirements, density restrictions and other controls go well beyond the traditional mission of the building code and end up artificially reducing the development of safe, affordable housing. The unfashionable but accurate term for these restrictions is “snob zoning.” Suburbanites use them to boost property values by keeping out riffraff — even the riffraff who teach their kids, police their streets and extinguish their fires.

Paraphrasing economist Christopher Thornberg, Grunwald concludes: “The best thing local officials can do to promote affordable housing is to get out of the way — stop requiring one-acre lots and two-car garages, and stop blocking low-income and high-density projects.”

First question: Wow, where did the Post find this guy? He’s good.

Second question: Will any of the Post‘s editorial writers absorb what Grunwald has to say?

In the latest edition of Bacon’s Rebellion, I profile Burrell Saunders, the lead architect behind Virginia Beach’s Town Center. This project has converted several blocks of suburban strip development in the Pembroke area into a pedestrian-friendly, mixed-use community with only modest assistance from the City of Virginia Beach. (See “Extreme Makeover.”)

A number of points arise from this column that bear upon ongoing conversations on this blog.

The biggest barrier to re-development of the district was the restrictive city zoning code. Once the city created a special code for the Town Center district, the project began moving.

Increased density does not necessarily result in increased congestion. I visited the Pembroke area from around 8 a.m. to 3 p.m. Friday. The main thoroughfares — Independence and Virginia Beach Boulevards are modestly congested but hardly onerous. Automobile traffic was remarkably light on the side streets.

It won’t take two generations to make significant changes in human settlement patterns. Transportation-efficient development in the right location can have an immediate impact, reducing the number of car trips on crowded arterial roads. Reforming land use in Virginia cannot be dismissed as a long-term solution — it is very much a here-and-now solution.

The August 28, 2006, edition of Bacon’s Rebellion is now online. You can view the whole kit and kaboodle here. Or just check out the following columns:

Extreme Makeover
Burrell Saunders has mastered a skill vital to Virginia’s future: transforming suburban decay into urban cool. His talents are on display at Virginia Beach’s Town Center.
by James A. Bacon

Sportsmanship Matters
In politics, as in baseball, there is a way to play the game.
by Doug Koelemay

Someone Has to Pay
Virginia’s transportation system needs more money, but not all fund-raising schemes are created equal. Some perpetuate the status quo while others encourage innovation.
by Patrick McSweeney

The Whale on the Beach
The era of massive over-consumption of the earth’s natural capital is coming to an end. The only prayer for sustaining our quality of life is to adopt more efficient human settlement patterns.
by EM Risse

Backgrounder:
Quantification of Land Resources and the Impact on Land Conservation Efforts
by EM Risse

Saving Money, Helping Kids
Tuition Assistance Grants of $10,000 would help disabled children to attend private schools with programs tailored to their special needs — and save public schools money in the bargain.
by Geoffrey Segal

When Bureaucrats Rule
Our legislators can enact all the laws they want, but their implementation is easily thwarted if they fun afoul of our state bureaucracy.
by Phillip Rodokanakis

The Real Race Problem
Which is worse: calling someone “macaca” or painting whites as racists in order to perpetuate the cult of victimhood and keep minorities on the liberal plantation?
by James Atticus Bowden

Nice & Curious Questions
Up, Up and Away: Ballooning in Virginia.
by Edwin S. Clay III and Patricia Bangs

There is a lot we could learn from the Europeans, especially about energy and the environment, the subject of our last column as well as today’s column at Bacon’s Rebellion.

One topic is vocabulary. We talk about “linking land use and transportation” and “balancing transport system capacity with settlement pattern travel demand.”

In the EU they are talking about “breaking the link between economic prosperity (aka, growth) and the growth of transport (infrastructure).

Today’s WaPo Metro Section (“Land-Use Studies Crucial, Kaine Says: State to Measure Impact of Projects“) give hope that Tim was listening three years ago.

Expanding and refining the words used might help shift the trajectory of dysfunction towards a sustainable course.

EMR

MainStream Media is going wild with hard news stories, soft personality features and “in-depth reporting” to mark the first anniversary of Katrina.

The recurring theme is: “The Gulf Coast – and New Orleans in particular – are not back to the way they were a year ago.”

Excuse me? Is that not just what everyone would hope? The Gulf Coast – and New Orleans in particular – were death traps waiting to happen a year ago. In many ways Katrina and Rita were only a hint of what might have happened if “The Big One” made a direct hit.

In the early 70s when almost no one was yet talking about Global Climate Change, serious scientists and researchers – climatologist, hydrologists, civil engineers and ecologists all told us that the Gulf Coast had a target painted on its back.

The State of Louisiana paid us hundreds of thousands of dollars to develop a long-term strategy to fundamentally change human settlement patterns on the Gulf Coast, around New Orleans and in the upland urban agglomerations such as Monroe and Shreveport.

The governance practitioners put those plans on the shelf and ignored the advice. They proceeded with Business-As-Usual and Politics-As-Usual. See “Down Memory Lane With Katrina,” 5 September 2005 at db4.dev.baconsrebellion.com

Now no one we have observed – not Brookings who is documenting the recovery effort, not the MainStream Media, not the well intended volunteers, not the well fed government contractors, not the everyday carpet baggers, on one – is paying any attention to the shape of future.

Collectively millions of hours and billions of dollars are being spent on the “recovery” effort, but nothing is being done to implement strategies to Fundamentally Change settlement patterns. It is imperative that human’s ecological footprint shrink at the regional and community scale.

Some houses are being rebuild on raised foundations, there are plans to build higher and better levies. There are no strategic plans for making the New Orleans New Urban Region or the rest of the Gulf Coast more bad weather proof or to create Balanced Communities in the Coastal or the Upland areas of the State.

The Gulf Coast is not back to the way it was? Thank goodness. But it has not moved toward a more sustainable settlement pattern at the regional and community scale either.

Did someone mention Ernesto?

EMR