Bacon's Rebellion

Virginia’s primo, AAA bond rating is not imperiled by the budget impasse, Gov. Timothy M. Kaine and senior Virginia legislators said yesterday after spending a day in New York getting grilled by the major bond-rating agencies. “We told them we were all very optimistic that we’re going to have a budget,” Kaine declared upon his return to Richmond. “But they told us they’d be watching.”

Robert A. Kurtter, senior vice president for state ratings at Moody’s Investors Service, said his firm will “evaluate the circumstances as they evolve.” He was not overly concerned that Virginia is nearly three months late completing a budget, report Michael Hardy and Jeff Schapiro with the Richmond Times-Dispatch, because there is still time to resolve the issues. Said the T-D:

Should Virginia be forced to operate without a budget, Moody’s would closely monitor the state’s contingency plan and determine whether it ultimately fashions a fiscally responsible solution, said Kurtter.

Twenty-two days left in the fiscal year… and counting…

(I am posting this on the behalf of Mark Rush, head of the department of politics at Washington & Lee University. — Jim Bacon)

Phillip Rodokanakis’s column, “Political Landscaping” (May 30, 2006), raises some important issues about the political parties’ rights of association. More important, it raises an esoteric issue: Who, exactly, is the Republican (or Democratic) Party—the voters, the elected officials or the party organization?

While the GOP has gone to court to challenge § 24.2-509 (which gives incumbents the right to choose their method of renomination) of the state code, I wonder whether we really want the courts to step in to this mess. Essentially, this is not a legal conflict. It is a family feud between the elected officials (who would be nuts to give up the right to choose their method of renomination) and the party officials (who are the principal victims of the code). By rights, the courts might just tell the political parties to get their houses in order.

Rodokanakis cites the U.S. Supreme Court decision (California Democratic Party v. Jones) as proof that the Supremes still support the associational rights of political parties. Problem is, the political parties went to court to prevent an initiative from compromising their associational rights. In Virginia, the law in question is part of the state code—put into effect by Democratic and Republican legislators.

I generally prefer the notion of strong party organizations. But, do we really want the courts to declare that elected legislators have no say in running the parties? Americans have never really promoted the notion of a strong party organization. Voters split tickets. They seldom become dues-paying, card-carrying, placard-waving party members. They like the idea of the primary election. I don’t see this lawsuit capturing the imagination of the public

Also, for what it’s worth, we can’t rely on the US Supreme Court for much in the way of support for the strong party notion. If we look at the court’s campaign finance decisions, we’ll see very little respect for the parties.

Does any one know the genesis of this part of the state law? When did incumbents gain the right to choose the manner of renomination? The law is clearly an attack on parties, party bosses, smoke-filled rooms, etc. But, it essentially turns candidates (and those seeking nominations) into independent contractors.

You can argue state constitutional theory all day long regarding the right of Gov. Timothy M. Kaine to run the government July 1 in the absence of a budget approved by the General Assembly. But 99.9 percent of the electorate is less interested in legalisms than in whether maximum security prisons are staffed with guards, whether the state police are patrolling the highways, whether DMV offices stay open, whether mental institutions remain staffed and the like. In the court of popular opinion, Tim Kaine is not likely to encounter much resistance if he usurps power to keep basic services functioning.

As the Washington Post quotes the Governor this morning:

“I am not going to let Virginians suffer because of inaction,” Kaine said at a news conference. “The Constitution doesn’t contemplate legislative inaction draining all the blood out of the executive and judicial branches.”

We’re already hearing the meme repeated that Republicans have proven they can’t govern. That’s a simplistic statement: The problem isn’t “Republicans” per se, but a deep philosophical division between Republicans in the Senate and Republicans the House of Delegates — a division as profound as that between Republicans and Democrats. But no matter. If essential government services get shut down, few members of the public will make that distinction.

If General Assembly Republicans want to ensure an electoral shellacking next year, they need do no more than refuse to agree to a budget, plunge the state into crisis — a crisis that will, assuredly, generate national attention — and let Democratic Governor Tim Kaine become the savior of sanity.

Twenty-three days left in the fiscal year… and counting…

The commercial real estate market is changing. Big developers are getting the message that the traditional pattern of development — scattered, disconnected, low-density — isn’t matching up with the demands of the marketplace. With luck, our lawmakers will get the message, too, and start devising ways to make it easier for developers to do the right thing.

The latest big announcement comes from Maryland-based Lerner Enterprises, which plans to build an 18-story, 472,000-square-foot office tower in the mixed-use Corporate Office Center in Tysons II. Billing the building as “state of the art,” Lerner sees itself as redirecting future growth in Tysons “away from urban sprawl, where cars and parking dominate the aesthetics, to one of urban centers where pedestrian amenities and public spaces unite to form a sense of place.”

The project will add an elegant enclosed pedestrian bridge system across Tysons Boulevard, linking the development with the “extensive amenity base” at the Ritz-Carlton, PalmRestaurant and the wide array of shops and restaurants of the adjacent Galleria. The heart of the complex, a plaza-like courtyard, will organize the entries for the office tower, retail and parking facilities. Landscaping, sculpture and architectural paving will enhance the formal entry court, which is conceived as an extension of the building’s lobby.

The building also will install state-of-the-art elevators, mechanical systems and high-performance glass, meeting “green” building standards and achieving Energy Star’s highest rating. (See press release here.)

I can’t tell enough from the scant details supplied by Lerner whether the project really delivers on the promise of creating a pedestrian-friendly environment that provides connectivity to neighboring properties. But, at a minimum, Lerner is talking the talk. And that’s a necessary precondition for walking the walk.

(Photo credit: www.tysons2.com.)

I’ve long maintained that real estate prices in Virginia are out of control and headed for a bust. Nothing makes my point clearer than this chart, created by Chmura Economics & Analytics and scheduled for publication tomorrow in VA Newswire.

The image is fuzzy because I had to shrink it to fit this blog format, but the divergence since 2001 between the green line (change in Virginia housing prices) and the blue line (change in U.S. housing prices) comes through clearly. The increase in Virginia housing prices has outpaced the increase for the U.S. by a wide and growing margin. The strongest price increases, according to Chmura, have been concentrated in Winchester, Northern Virginia and Hampton Roads.

What goes up must come down. When mortgage rates are rising and income is increasing at only five percent per year, it is impossible to sustain price increases of 20 percent or more per year, no matter how severe the local housing shortage. Inevitably, as speculative excess is wrung from the market, price increases will cool. The first big question is whether there is sufficient froth in the market to lead to an outright retreat in prices. The second big question is what will happen to local tax revenues and tax rates when property values fall and reassessments roll around. It won’t be pretty.

Not only is Virginia heading for a fiscal crisis, but it may be heading for a constitutional crisis as well. The Senate and House of Delegates managed to get budget talks back on track last week, but negotiations derailed faster than an Amtrak train in a snow storm. Judging by the exchange of letters released to the public, relations between the Senate and House budget conferees are as acrimonious as they’ve ever been.

There are 24 days left to patch together a budget before the fiscal year ends. Then the state enters a constitutional crisis. Gov. Timothy M. Kaine says he has the authority to keep basic state services running without a budget. But Attorney General Robert F. McDonnell says he does not. (Read the Washington Post coverage.)

Meanwhile, senior state lawmakers are due to visit bond rating agencies in New York. Virginia may be the best managed state in the country when the politicians are actually speaking to one another, but it’s not looking terribly well managed right now. Only two years ago, on the heels of the last recession, Virginia’s political class was consternated that the state’s AAA bond rating might be cut. Wouldn’t it be ironic if, despite the 2004 tax increase and a $1.5 billion surplus, the rating agencies cut Virginia’s bond rating anyway this year?

Interesting news in a telcon today. A big event is planned for political activists and junkies of the Right persuasion. Virginia Conservatie Action PAC (VCAP) is going to host a Conservative Convention for Virginia.

One day affair with volunteer delegations from every city and county on Saturday, November 11th , 2006 at the Richmond Convention Center.

Presidential candidates Allen, Frist, McCain, and Romney scheduled to appear, unless their truth changes. Huckabee is a maybe – if his schedule changes.

Keynote speaker is scheduled but hush-hush for now.

Other Conservative organizations are invited to participate.

This is part of the VCAP effort to identify and build a voting base of 1 million Conservative Virginian voters.

More details to follow as they are developped.

It’ll be very interesting to see if this effort can move the ball in Virginia’s electoral politics and in policy issues in the General Assembly.

Full Disclosure: I was asked and volunteered to be on the Steering Committee. Hope my business travel doesn’t take me out of state in early November.

Bob Gibson with the Charlottesville Daily Progress points to an alarming sideline conflict between the Senate and House budget negotiators in the General Assembly. House Republicans have inserted budget language that would ban funding for “any entity” — including the University of Virginia and Virginia Commonwealth University — “that conducts human stem cell research.”

Two UVa professors of neurological surgery — Roy C. Ogle and Gary K. Owens — are conducting embryonic stem cell research in the areas of bone regeneration and smooth muscle research. Ogle, says Gibson, is an expert in skull reconstructive surgery.

Gibson relies upon Del. Brian J. Moran, D-Alexandria, who denounces the House action as “irresponsible,” as at least one of his sources, so it’s conceivable that we’re not getting the full story. But if the account is substantially accurate — and Gibson seems to be a reliable reporter — I find the House action mystifying. Even President George W. Bush’s “ban” of stem cell research prohibits only the federal funding of stem cell research, and it allows exemptions for pre-existing lines of stem cells. Apparently, the House budget language would go beyond prohibiting the application of state funds for stem cell research and — can this possibly be true? — would eliminate all state support for the universities outright.

If such budget language were enacted, UVa and VCU could not possibly absorb the loss of state funding, so they would have no choice but to kill the research programs. That’s called extortion. The stem cell ban is also… how shall I put this delicately… not an astute move politically.

By positioning the House far to the right of President Bush on the stem cell issue, such punitive budget language would hand the state Senate an issue which to flay the House in the budget negotiations — look how out of control these guys are! — and the Democrats an issue with which to flay the GOP at the polls. The stem-cell measure needs to be deep-sixed as quickly as possible before the story goes mainstream and creates a debacle.

I’m late blogging this story because my Blogger interface wouldn’t cooperate yesterday. But better late than never…. Now that he’s no longer working for Richmond city hall and his talk radio show is on hold, Paul Goldman has resumed e-mailing his famous GoldmanGrams.

In the latest, Goldman wonders if the Democratic camp of the blogging community has shot itself in the foot by aggressively attacking Harris Miller and favoring Jim Webb for the Democratic party nomination for U.S. Senate. In effect, Goldman suggests, by positioning Miller as the victim early in the campaign, those attacks have inoculated him against charges of negativity in the late phases of the campaign. Says Goldman:

Without the bloggers’ over-the-top attacks on Miller, would this be a different campaign right now? We will never know. But we do know that in the new two weeks, Miller will be free to make an almost exclusive negative against Webb because the bloggers created the climate to do it.

From what I’ve seen personally, the “negative” campaigning has consisted mainly of mass-mailed material in which Miller questions Webb’s Democratic Party credentials. That’s pretty mild. If I were a Democrat, I would consider it a legitimate issue. But Bob Gibson with the Charlottesville Daily Progress cites details of aggressive robocall messages here.

You can read the text of the GoldmanGram here.

Read Slantblog’s take on the GoldmanGram here. And Conaway Haskins at South of the James.

The Washington Times lead editorial today (June 3, 2006), “Conservative sites un-Googled”, exposed a problem I heard about two weeks ago. Two web sites that carry my ‘nationally-focused’ op eds, MichNews.com and New Media Journal, were told by Google that they were removed for ‘hate content’.

“The offending material cited by Google were articles criticizing radical Islam and Islamists. Upon review, the articles contain language no more – in some cases far less – inflammatory than the numberous Muslim web sites a user can find when searching Google News.”

Google’s bowing to Islamists isn’t “any less cowardly and, as we’ve seen in Europe, dangerous to a free society. “

“Islamists have exploited Google’s seemingly well-intentioned business practices to silence critics. Because if you can’t find it using Google, chances are you won’t find it all.”

In light of the civil suit here in Virginia against anonymous blogger – Black Velvet Bruce Lee – and comments about blogging at today’s State Central Committee, RPV meeting, it brings the issues of free speech, responsibility and rights up again for Virginians.

Google shouldn’t edit for ‘hate speech’. Neither should others. If the speech is hateful and stupid enough, it will be self censoring because no one will read it or care. The laws for slander and libel should still apply. But PC speech codes, especially when they are manipulated by Islamists, should be discarded.

I’ll never forget when a lawyer (U Va Law) told me that if I said, “Homosexual behavior is sinful,” then I had committed hate speech which should be made into a hate crime, prosecuted and punished.

Freedoms require ever-lasting vigilance.

Bacon’s Rebellion has long promoted telework as one solution, among many, that would help address traffic congestion in Virginia. Telework makes abundant economic sense. But it may not always make political sense. What would happen, for instance, if Washington, D.C., wanted to tax the income generated by employees whose formal place of work was in D.C. but who teleworked three days a week from a location in Virginia? Double taxation would destroy an employee’s incentive to telework.

That issue hasn’t arisen here… yet. But it could, given the District’s propensity for trying to stick higher taxes on out-of-state residents.

A similar issue has, in fact, occurred in New York, which, according to Networkworld.com, “requires those who sometimes work in the office of their New York employers to pay state income taxes — not only on the income they earn while physically in New York, but also on the income they earn at home.”

A recent U.S. Supreme Court decision implicitly backed New York’s practice and opened the door for other states to start collecting a nonresident income tax. But two Connecticut senators have introduced the Telecommuter Tax Fairness Act that would undo some of the damage. U.S. Rep. Frank Wolf, from Northern Virginia, has joined the effort to get the bill passed, and the federal bureaucracy, which is promoting telework aggressively, also is behind the bill. Let us hope it passes.

(Thanks to reader and blogger Jim Duncan for passing this on.)

One of the more interesting laws to emerge from the 2006 General Assembly is one that promotes the “clustering” of housing in fast-growth counties. An argument can be made that clustering makes a lot of sense in areas zoned for low-density development — say, one house per five or 10 acres. By clustering the houses together instead of smearing them across five-acre lots, developers can (a) create more green space, and (2) economize on the construction of subdivision roads and utilities. Both are desirable outcomes.

However, some observers caution that “clustering” will do nothing to alleviate traffic convestion. The same number of houses still will be served by a bundle of cul-de-sac roads that still empty into the same collector road. Nothing in the legislation promotes connectivity to other subdivisions or other collector roads. The same traffic bottlenecks will exist.

The law strikes me as a modest step forward but an incomplete one. Bob Burke has the goods in his story, “Cluster Clash.”

Jim Patrick, a Shenandoah County blogger who happens to serve on the board of supervisors, has weighed in with a lengthy analysis of l’affaire Vehrs. Patrick makes a number of valuable points, but one that deserves continued scrutiny is what he terms the “old economy meets the new economy.”

In the old assembly line and sweatshop models, the type of factories in [Martinsville/Henry County] previously flourished on, workers stay at their stations and keep moving ‘working’. MHC’s prosperity was founded on large corporations, typified in the 1956 classic The Organization Man, where corporate values engulfed personal beliefs.

The new economy’s growth has paralleled the growth of personal computers. Production is judged by outputs “…how well people are doing their jobs — rather than simply trying to make sure that employees look busy.” U.S. economic performance and individual productivity has boomed at the same time as computer and Internet usage has boomed.

Vehrs’ job is to answer calls and dispense information; absent from debate was what he should do during non-productive time. None of the commenters gave a clue as to what employees should do when the assembly line runs in fits and starts; the time between calls.

I’m not rehashing the merits of Vehrs’ punishment — Vehrs has atoned and found forgiveness, and everyone should move on — but I, like Patrick, worry what kind of precedent has been set for state employees. If strategies such as teleworking and hoteling are ever to be viable (See “Telecommuting May Be Coming to a State Agency Near You“), state government needs to evolve towards a “knowledge economy” organizational model that allows employees to work more autonomously. I fear that state government may have taken a big step backward.

Reader and blogger Ben Martin submits the following data point: The Progressive Group of Insurance Companies, the third largest auto insurer in the country, offers an insurance discount up to 15 percent for low-mileage drivers. (See Progressive’s Virginia promotion here.)

The underwriting logic seems obvious: If you drive fewer miles, you’re less likely to be involved in an automobile accident.

The private sector gets it. Why doesn’t the government? Why can’t the Commonwealth of Virginia come up with a transportation financing scheme — for road maintenance, at least — as logical as Progressive’s? The fewer miles you drive… the less the wear and tear you put on state roads… the less you pay to maintain those roads. Conversely, the more you drive, the more you pay.

Just as an insurance company might adjust your insurance rates depending upon the type of car you drive — certain models are more likely to suffer extensive damage in an accident; certain models do a better job of protecting their occupants than others — why can’t the Commonwealth charge more for vehicles, such as tractor trailers, that cause more damage to our roads than, say, a Volkswagen Beetle or a Ford Focus?

If the insurance industry can do it, why can’t the state of Virginia? Why do our lawmakers devise Rube Goldberg financing schemes that sever the connection between taxes paid and Vehicle Miles Driven? Why is it so hard to sell the entirely reasonable proposition that the more you drive, the more you pay?

Is anyone outside the blogosphere paying attention to the contest between Harris Miller and James Webb for the right to run against U.S. Sen. George Allen? I read next to nothing about the race in my home-town paper, the Richmond Times-Dispatch. The race never comes up in conversation — and that’s saying something because most of my friends are politically opinionated, and many of them are Democrats.

An article in the Washington Post today says that no more than two or three percent of registered votes is expected to participate in the nomination election this month. That would be disgracefully low. Whatever their imperfections, both candidates are men of substance, and they have engaged in a lively debate.

Perhaps there is no excitement here in Richmond because both Miller and Webb are perceived as remote — Northern Virginians and Beltway insiders. Whatever the reason, the lack of enthusiasm doesn’t augur well for the eventual winner in his race against Allen.