Bacon's Rebellion

Bob Gibson with Charlottesville’s The Daily Progress covered the blogging conference hosted over the weekend by the Sorensen Institute for Political Leadership. I attended the first Summit but family obligations kept me from attending this one. Sounds like I missed a great event.

As a sign that Virginia’s political blogosphere is emerging as a significant factor in Virginia state politics, consider that this event was attended by Virginia’s lieutenant governor, attorney general and three members of the House of Delegates. Bolling’s remarks, as reported by Gibson, were revealing:

“A year ago, I didn’t even know what a blog was, and now I’m looking at blogs and reading blogs and I’m worrying about whether you are saying nice things or nasty things about me on blogs,” Lt. Gov. William T. Bolling told the Sorensen Institute for Political Leadership’s second annual Summit on Blogging and Democracy. “Now I’m doing blog interviews.”

“Maybe this whole blogging thing has the potential of bringing back responsibility to campaigns,” Bolling told about 90 people Saturday afternoon. He urged the political bloggers to “hold us responsible once we get elected for doing the things we said we were going to do.”

Update: Claire Guthrie Gastanaga, who attended the conference, has published her “random thoughts.” Read them here. She highlights an apparent division between “liberal” and “conservative” bloggers, which strikes me as an unfortunate development…. but probably inevitable. Bloggers, by their nature, are hyper-opinionated, thus prone to schism.

Before anyone other than The Great Fuzz Ball goes off and says “See, I told you so!” concerning today’s WaPo story on job growth between in the National Capital Subregion let us all take a deep breath.

“Region’s Job Growth a Centrifugal Force” reports that COG found the R=20 plus jurisdictions gained 78,097 jobs vs 94,847 jobs for those outside R= 20. That 16,750 job difference is just 0.7 of one percent of the 2.4 million jobs COG projected to be inside R=20 by 2025.

The growth of 94,847 jobs puts the “outer” jurisdictions well on the way to the 230,000 jobs that were projected by 2025 in this territory but that rate of growth still brings the “outer” areas up to less than 10 percent of the Subregions total jobs inside R=20 at that time. For a summary of these issue see “Where the Jobs Are,” 24 May 2004 at db4.dev.baconsrebellion.com

Besides the small percentage of the Subregion’s jobs this “news” focuses on also consider:

How many of these jobs are construction jobs on housing and residential service projects that will be going away when the buildings are completed? (Have you checked the trajectory of big house prices or how long units are staying on the market in the past six months?)

How many of these jobs are low paying service jobs supported by those with good jobs closer to the centroid (aka, in the “Core”) that have no time to mow their grass, care for their children or even walk their dog?

These are 2000 to 2005 numbers, as Larry Gross points out in his posting on the Gas Shock thread, $4.00 gasoline is going to change “everything.”

One fact is very clear: As of last week, employers were paying twice the rent per square foot for “Class A” places for employees near the centroid and within R=10 as they were in the R=20 to R=30 Radius Band. The latest wage numbers say that is true for the per month earnings as well.

Encouraging new job creation outside R=20 or R=25 (most of the new jobs in both Loudoun and Prince William are within R=25) is a good thing but only as long as those jobs contribute to creating a balance of J / H / S / R / A in Greater Culpeper / Culpeper, Greater Warrenton / Fauquier and other Disaggregated Communities outside the Clear Edge.

The WaPo article says that the “move-out-trend” is supported by the military job move to Ft. Belvoir. Ft Belvoir is just outside R=10, not beyond R=20. How soon the WaPo folks forget the radius map published just 8 days ago.

To its credit the reporter notes that there is a growing consensus that there should be a jobs / housing balance (a J / H / S / R / A Balance) and compact settlement patterns.

The story suggests that the state and municipal agencies continue to do a terrible job of fairly allocating location variable costs and of creating functional, balanced settlement patterns.

EMR

To accommodate a projected doubling of its current 50,000 cars per day, Rt. 7 near Leesburg would grow to 10 through lanes. Including turning lanes, Rt. 7 would be 17 lanes wide at the intersection with Battlefield Boulevard, according to Leesburg2day.com.

Those are the kinds of numbers being tossed around as a result of plans by The Peterson Companies to build 1,366 homes and between 1.1 million and 2 million square feet of retail, office and hotel space on land between the airport and the Dulles Greenway.

A 17-lane Rt. 7 would be wider than the Capital Beltway. Indeed, it might qualify as the widest road in Virginia. Does anyone know of any existing road with 17 lanes?

Seventeen-lane roads strike me as inherently unworkable. There is something very, very wrong with a human settlement pattern that generates so much automobile traffic and concentrates it on a single thoroughfare.

Senate and House budget negotiators have finally completed a budget for the next two fiscal years. Although the $74 billion behemoth offers no broad tax relief and institutionalizes Virginia’s chronic budget surplus, it could be worse.

The best thing that can be said about the budget is that lawmakers resisted the temptation to use surplus revenues to ramp up expensive new spending programs. (There was loads of new money for old spending programs, but that’s a different issue.)

Instead of cranking up programmatic spending, the General Assembly devotes more than $1 billion to one-time capital outlays — without borrowing any money. That means if revenues fall short of projections in future years, Virginia can easily cut back direct outlays for capital improvements and make up the difference by tapping the bond markets. Combine that with a fully replenished “Rainy Day” fund, and the state budget should have lots of insulation from the next revenue shortfall. The bond-rating agencies should be very happy.

Even though there was no broad tax relief, the budget does offer the following targeted initiatives (to quote from Senate spokesman Scott Leake):

• The repeal of the state estate tax, or so-called death tax takes effect July 1, 2007.
• A back-to-school sales tax holiday will begin this August.
• A tax credit for the payment of long-term care insurance premiums is established.
• A tax credit for contributions designed to reduce tuition at schools for children with disabilities begins next year.

On the downside, legislators continue to throw money at K-12 education to meet the Standards of Quality standards without any regard to the efficacy of that spending. Medicaid spending is still out of control — tax breaks for long-term care insurance don’t address the real source of Medicaid budget inflation, which is payments for disabilities. And, of course, we still have the transportation issue to address, presumably later this summer.

If you’re Arlington County, you create a new vision for the boxy buildings and subterranean passageways in Crystal City that will be emptied by the federal Base Realignment and Closure Commission. In place of the sterile monoculture that now characterizes the office complex near the Pentagon, members of an advisory task force see a more lively street-level scene with a greater mix of shops, restaurants and offices. Writes WaPo reporter Annie Gowen:

[Board of Supervisors Chairman Chris] Zimmerman and others speaking yesterday said that the vounty sees the empty space as an opportunity to “reimagine” and “brand” Crystal City as an attractive destination. Though close to Reagan National Airport and dense with hotels, the area has long been seen as a gloomy 1960s era enclave of offices connected by underground passages. But parts of Crystal City have lately seen a rebirth, thanks to an influx of trendy cafes and a new streetscape. …

Charles E. Smith Commercial Realty, which owns 7.4 million of the 11 million square feet of office space in the neighborhood, has spent $40 million on improvements to enliven the streets and attract new businesses. It turned Crystal Drive into a two-way main street and has recruited new shops and chic restaurants such as Jaleo and McCormick & Schmick’s.

Reading between the lines of Gowen’s story, however, there seems to be one big missing piece: Housing. Creating a livelier commercial district is a worthy goal. But creating a balanced community with a mix of housing, offices, shopping and other amenities — allowing people to live close to where they work and play — is an even more worthy goal. As Ed Risse has pointed out, the relocation of 17,000 jobs creates a rare opportunity to create a genuine balanced communities in Northern Virginia.

The problem, I surmise — it’s not discussed in the story — is that Arlington is concerned about protecting its tax base, which means replacing the vacated offices with new offices, not housing. It’s hard to fault Arlington for pursuing its short-term self interest. But everyone needs to recognize that Arlington’s decision not to pursue a balanced community means that housing will end up somewhere else, presumably in outlying counties. And employees working in the buffed up Crystal City will wind up commuting long distances and clogging Northern Virginia thoroughfares. And the cry for new transportation revenues will grow ever more deafening.

The House of Delegates has posed as an outpost of fiscal conservatism on the basis of its (rightful) opposition to raising taxes at a time the state budget is running a chronic budget surplus. But there’s no disguising the fact that the General Fund budget in fiscal 2007-2008 will be about 11 percent bigger than the budget in 2005-2006.

As the Jaded JD points out in his blog, the delegates have not exactly been paragons of spending restraint. JD enumerates a long laundry list of earmarks and spending amendments proposed by House tax hawks. Writes the Jaded One:

If you add together all the budget amendments proposed by the House conferees (excluding fund transfers), you might expect to see a net reduction in the budget, based on House Republican rhetoric. Alas, no. Total increase from the House budget conferees? $1.926B (that’s billion) over the biennium.

Scary, huh? These are the guys we’re counting on to restrain state spending. I shudder to think what spending would look like if the Senate had its way.

Fourteen Days Left in the Fiscal Year… and Counting…

General Assembly conferees are reporting slow progress in negotiations to craft the next biennial budget, slated to begin July 1, but they haven’t finished the job yet. Tensions between the Senate and the House of Delegates are still running high. To quote the Washington Post account by Michael Shear and Rosalind Helderman:

Reading a missive from the House on Thursday morning, Chichester at one point exclaimed: “God, they’re dumb as rocks!”

After reading a letter from senators aloud, Robert Vaughn, the staff director for the House Appropriations Committee, threw up his hands in frustration. “They’re like an EKG,” he said, referring to the way the needle on a heart monitor bounces all over the place. “They’re going to give somebody a heart attack.”

The impact of high gasoline prices on Virginia transportation policy is prompting more than blog posts at Bacon’s Rebellion — see “Energy Independence and Sustainability,” “Straight Talk about Gasoline Prices and Transportation Policy,” “A World with One Billion Cars” and “Virginia’s Vulnerability to Oil Shocks.” There is evidence that legislators are reappraising their thinking about transportation policy.

Exhibit A: Sen. Martin E. Williams, R-Newport News, chairman of the state Senate’s Transportation Committee.

As reported by Peter Galuszka in the latest Road to Ruin article, “Gas Shock,” Williams is a self-described conservative Republican who for years supported free enterprise, property rights and the extension of development and roads into the countryside. As gasoline prices have risen, however, he has come to realize that Virginia’s transportation policy cannot continue as it has. Consequently, he has been willing to support measures linking land use and transportation that he never would have before.

“I never thought I would agree with a growth management strategy that hurts property rights but I am already there,” he says. “We just can’t accommodate growth in outer areas like we used to.”

I’m delighted to see that Williams is open to change, and I probably shouldn’t quibble. But I just have to set the record straight on one issue. I, too, support free markets and property rights, but I never equated those with the policies responsible for the pattern of scattered, disconnected, low-density development commonly referred to as “sprawl,” much less our sprawl-inducing transportation policy. To the contrary, few sectors of the U.S. economy are as heavily regulated (zoning codes, subdivision ordinances, comprehensive plans) and subsidized (road construction, the pricing of utilities and public services, mortgage financing) as real estate.

For me, “property rights” means that government should not have the right to take someone’s property, or diminish the value of someone’s property, without compensation. “However, property rights” does not entitle land speculators to make a profit, nor does it require local government to extend roads, utilities and public services to any old place that a developer decides to build a subdivision.

As Sen. Williams thinks through the implications of higher gasoline prices for transportation policy, I hope he also reconsiders what the terms “free markets” and “property rights” mean in the context of the heavily regulated, heavily subsidized real estate sector.

“A combination of no state budget, more expensive construction materials and declining revenues from gas taxes is adding up to less money for secondary road construction and public transit in Virginia,” writes Kelly Hannon with the Free Lance-Star. “If nothing changes, just $800 million of the $6.9 billion slated for road projects would go to local governments for secondary roads. That’s a statewide decrease of $200 million from last year’s plan.”

State officials are making a big deal out of the impact of high gasoline prices on the consumption of gasoline. Fewer gallons of gasoline sold translates into lower gasoline taxes.

What state officials aren’t emphasizing, and reporters aren’t reporting, is that fewer gallons of gasoline sold also reflects the fact that Virginians are driving less. If they’re driving less, presumably the need for massive road and rail improvements isn’t quite as urgent.

Admittedly, rising energy costs creates a double whammy for the transportation budget. It also drives up the cost of construction materials, which would cut into state construction plans even if gasoline sales weren’t falling. But at some point, someone needs to begin rethinking fundamental assumptions: How long can Virginia afford to maintain a transportation policy predicated on the assumption of cheap energy? Along those lines, see our post above.

Judicial Watch, a government watchdog group, has formally requested that Virginia’s Secretary of Transportation, Pierce Homer, make future meetings of the Dulles Corridor Metrorail Review Panel open to the public and the press. Times-Community.com has the story here.

Says the story written by Kali Schumitz: “The panel began closed-door meetings last week to formulate a recommendation for the state to pursue either a tunnel or aerial tracks for running Metro through Tysons Corner as part of the project to extend rail to Washington Dulles International Airport.”

Spokesmen for the American Society of Civil Engineers, which formed the panel at Homer’s request, argued the meetings should stay closed. Said Patrick Natale, ASCE president: “We need to move quickly and have frank discussions.”

It’s in the Kaine administration’s interest, however, to keep the meetings open.

The Rail-to-Dulles project has an estimated cost of $4 billion, assuming no overruns. As I’ve argued in previous posts, the funding mechanism proposed by the Metropolitan Washington Airports Authority — 50 percent coming from a toll on the Dulles Toll Road — would put into motion a massive transfer of wealth from mostly middle-class commuters to wealthy owners of property near the Metro stations. A recommendation to run either a tunnel or aerial tracks would have a tremendous impact on the property values in Tysons Corner.

Any deliberations held behind closed doors, protected from public scrutiny, will only feed the impression, justified or not, that the interests of the general public are not being considered. Surely, the Kaine administration does not wish to be depicted as the willing tool of a handful of rich, influential landowners. Opening up the Dulles Corridor Metrorail Review Panel will help dispel such notions.

Finally, someone has written about the not so hidden but not well known gotcha buried in the estate tax repeal that President Bush wants to make permanent in 2010. Writing in the Washington Post today, Allen Sloan, the Post’s Business Columnist and Newsweek’s Wall Street editor, points out the negative impact of the change from stepped up basis to carry over basis for what he calls the estates of the “small rich.”

Most folks don’t understand that the much ballyhooed estate tax repeal carries a nasty surprise. Under current law, when someone dies, the estate pays a tax if it’s over a certain size, but the tax basis of inherited property for the heirs is the market value at the date of death (stepped-up basis). Under the law after full estate tax repeal, the estate won’t pay a tax if it’s small enough but the tax basis of inherited property for the heirs will be the same as the tax basis for the person from whom they inherited (carry-over basis).

Here’s Sloan’s example that illustrates the adverse impact of this change coupled with current and future exemptions:

Under current law, when you die your heirs get stepped-up tax basis. That means the assets you bequeath are valued for income-tax purposes at what they were worth the day you died — not what you originally paid for them. Say you paid $50,000 for stock that’s worth $500,000 when you die. Your heirs can sell it for $500,000 and owe no tax on the $450,000 gain. As long as your total estate doesn’t exceed the exemption limits, there’s no estate tax, either.

Now watch. Under the 2009 rules, estates of up to $3.5 million ($7 million for a married couple) would be exempt from federal estate tax. The tax rate on assets above that level would be 45 percent. Inheritors would be able to step up the basis of $3.5 million (or $7 million) of inherited assets to their value the day they inherit them. Fast-forward to 2010, when the estate tax is repealed. Yes, the estate tax would be gone. But heirs would be able to step up only $1.3 million in assets to their value on the day of death. (Don’t ask why; that’s just how it is.)

Assets beyond $1.3 million would be valued for tax purposes at carry-over basis — their cost (for income-tax purposes) for the person who died. So any estate with $1.3 million to $3.5 million in assets ($2.6 million to $7 million for a married couple) is worse off under full repeal in 2010 than it would be in 2009. Inheritors in the $1.3 million-to-$3.5 million range would face higher taxes if they sold inherited assets than they would under the 2009 rules. At the very least, they would have complicated paperwork to deal with. They’d be much better off inheriting in 2009 than in 2010. But if you’re dealing with an estate of $3.5 billion rather than $3.5 million, you’d be far better off inheriting in 2010.

How many folks will get the fuzzy end of this lollipop delivered to you by lobbyists paid largely by the mega-estate folks? Sloan says that a Joint Tax Committee study estimates that only 7500 people will have estates over $3.5 million in 2009, but 63,900 will have estates between $1.3 and $3.5 million.

Now, if we do nothing and we revert to the law before temporary estate tax repeal, the estate tax exemption will go back to $1 million in 2011 which will hurt a lot of small businesses and family farms. None of us should want that to happen.

But, as Sloan says, that doesn’t mean that we should make permanent the 2010 rules that will subject 63,900 estates to higher taxes while helping out only the 7500 people with mega-estates.

His recommendation?

It seems to me that adopting the 2009 rules, indexing the exemption for inflation and allowing stepped-up basis would get us back to the original intent of the estate tax. Taxing 7,500 estates a year doesn’t seem unfair. And it would generate significant revenue.

Makes sense to me.

In my most recent column, “Parking Madness,” I skewer the practice so prevalant in Virginia of surrounding every mall, shopping center, office park, church, government facility and even recreational amenity with vast, expansive parking lots. Suburbia has paved way too much of its surface area with impermeable, run off-creating asphalt, and it has destroyed any memorable sense of “place” by treating its buildings as islands in seas of gray pavement. Gone are the urban streetscapes, which utilize parking spaces to help define pedestrian-friendly places where people enjoy spending time.

There was one issue in that column, however, that I dealt with only in passing. In an auto-centric society, there aren’t enough curbside parking spaces to accommodate everyone with a car. Where do you put the extra parking spaces? How do you avoid ruining pedestrian-friendly streetscapes?

If you’re in a neighborhood defined by city blocks, put the parking behind the buildings. That’s the solution adopted by Richmond’s “Libbie and Grove” shopping area mentioned in the column, but a solution only imperfectly adopted. The parking lot behind the shops and Westhampton movie theater preserves the streetscape along Grove Ave., but abuts Libbie Ave. for a lengthy stretch, creating an eyesore for the shops on the other side of the street there.

The best execution of this idea that I’ve seen can be found in downtown Staunton, where the parking lot is consigned to the center of the block and intrudes only minimally on the streetscape. The photos at the top and bottom of this post, which I took last fall during a weekend visit to the Blackfriar’s theater, show the interior of a block in the heart of downtown. Placing parking in the middle of the block preserves the integrity of the streetscapes, creating the charming pedestrian ambience for which Staunton is reknowned. The interior parking lot serves a bed-and-breakfast hotel, the Dining Room (one of the greatest restaurants I’ve ever dined in… anywhere), stores, boutiques and professional offices. A similar parking-in-the-center-of-the-block configuration can be found at the Woodrow Wilson birthplace museum.

This configuration is possible, of course, only in urban areas organized in grid-street patterns. If anyone has seen it adapted successfully to the surburban pod pattern of development, I would love to hear about it.

Ever since the Department of Defense began privatizing its housing stock in 1996, members of the military dont all find themselves living in uniform, Army base-styled housing any more. The New York Times recently profiled a new military housing development, The Villages at Fort Belvoir, in Fairfax County. The first of the villages, Herriford Village with 171 houses and townhouses designed in a local Georgian Colonial style, was occupied last year:

It has a Main Street with shops and a clock tower, playgrounds, and village greens with open-air pavilions and centralized mailboxes where residents can socialize informally. There is not a tin hut or cinderblock house in sight.

A priority was designing a place that would foster a sense of community among the residents, deemed crucial for family morale when soldiers deploy overseas during wartime.

New Urbanists, who insist that the details of traditional design — porches and alleys and sidewalks — can help spin the supportive web of society, see a perfect client. “Military neighborhoods become ghost towns with heavy deployment,” said Joseph Scanga, a principal at Calthorpe Associates, which is working with the Army and the Navy. “They struggle more than average to build and maintain community.”

According to author William L. Hamilton, it is not clear yet whether The Villages at Fort Belvoir succeed in that mission. But it’s a social experiment worth watching.

(Hat tip to Larry Gross for forwarding this article.)

The Washington Times (‘Firm sues county over order to copy gay films’ Sat. June 10, 2006) reports an Arlington businessman is suing country officials who ‘ordered’ him to reproduce homosexual-themed videos.

Mr. Tim Bono has a core values web page for his business that states – “No content should embarass our empolyeses or tarnish our reputation. No pornography. No sexually explicit material. No content promoting violence or hate that runs counter to our Christian and ethical values. We will not debate the merits of your material if it crosses our line.” (www.bonofilm.com)

On April 13, 2006 the Arlington Human Rights Commission upheld a complaint and ordered Mr. Bono to duplicate the films at the Miss Vincent’s (the accuser) expense or pay for another company to provide the service. Miss Vincent said Mr. Bono’s father had previously copied the same videos without objection.

The Liberty Counsel pro-bono attorney said the county doesn’t have the authority to investigate claims about sexual orientation based on the Dillon Rule. The Commonwealth doesn’t recognize discrimination based on sexual orientation, so the County can’t either.

This will be interesting. Mr. Bono didn’t discriminate against Miss Vincent because he didn’t know her sexual orientation. How could he know? He didn’t discriminate even if he knew and cared about her sexual behavior preferences, because homosexuals are not a ‘protected class of persons’ in the Virginia code. Or maybe the Virginia legal language just addresses individual rights not being discriminated against on the basis of race, color, creed, national origin or gender. I don’t know the specifics.

I look forward to the Thought Police losing in court. Mr. Bono’s professional standards for his private business are straightforward. He shouldn’t be required to violate his ethical principles. Miss Vincent can have her films reproduced elsewhere in this free Country and Commonwealth. Mr. Bono should have a chat with his father about their standards.

What is the legal authority of Commissions in the Commonwealth to decide due process, find guilt and make punishments? Any word from our loyal lawyers?

The June 12, 2006, edition of Bacon’s Rebellion has been published. You can read the issue here. Here are today’s columns:

Parking Madness
Virginians spend multi-millions paving parking spaces. Most of the investment in asphalt sits idle. Worse, sprawling parking lots destroy any sense of community or place.
by James A. Bacon

Hunting Dogs and Disclosure Documents
The knowledge economy could give Jeff Foxworthy a lot of new material.
by Doug Koelemay

The Politics of Seeming to Care
American politicians pander to the populace, telling them what they want to hear, not what they need to hear. In this year’s transportation debt, Virginia’s lawmakers are no exception.
by Patrick McSweeney

Let’s Have a Televised Debate
We can’t trust the media to fairly characterize the transportation debate. The best alternative may be a three-way debate between the major contenders.
by Patrick McSweeney

Creativity Behind the Scenes
Despite budget disagreements that grab the headlines, Virginia lawmakers are coming to quiet agreement on several ways to make government work more productively.
by Michael W. Thompson

“June Will Come Soon”
June is a time to celebrate life, youth and rites of passage — and a time to count our blessings as free men.
by James Atticus Bowden

Nice & Curious Questions
Grave Matters: Cemeteries in Virginia
by Edwin S. Clay III and Patricia Bangs

Blogology
Teen Spirit: Kenton Ngo
by Conaway Haskins