Bacon's Rebellion

Looks like Virginia has its own version of an anti-Wal-Mart bill. A bill winding its way through the General Assembly may not force the retail giant to pay health insurance to all of its employees, as our neighbor to the north did, but the legislation does restrict the ability of Wal Mart and other giant retailers to compete in Virginia.

The Senate Commerce & Labor Committee has endorsed a bill that passed 98 to 0 in the House of Delegates that would prevent Wal-Mart or other retailers from opening branch banks in their Virginia stores under the auspices of an industrial loan association. But the bill specifically grandfathers First Market Bank, which is owned in part by the Ukrops family and located in most Ukrops grocery stores in the Richmond region.

I’m a big fan of the Ukrops brothers, who have contributed generously to worthy Richmond causes, and I shop regularly at their stores. But I don’t see why they should be allowed to put branch banks in their stores while their competitors cannot. There may be more to the story than appears, very briefly, at the bottom of Greg Edwards’ article in the Richmond Times-Dispatch today. If so, I would like to know what it is.

You can view the bill here.

Those who follow the MainStream Media in the northern part of Virginia know that the list of unethical practices and potential crimes at Fannie Mae over the past 10 years is growing and the topic of editorial and news analysis outrage.

MainStream Media has not yet noted that the real crime at Fannie Mae (and Freddy Mac) is that these federal agencies have catalyzed, leveraged and exacerbated the creation of the wrong size houses in the wrong locations. They are major contributors to the Shelter Crisis. See our column “Solutions to the Shelter Crisis,” 24 July 2005.

The actions of Fannie Mae have generated profits for financial institutions, land speculators and the raw land development industry. They have created inflated home prices and paper profits for house speculators. The modest increase in home ownership – a good thing for some – is off set by the drastic, long-term economic impact of dysfunctional settlement patterns – a very bad thing for everyone.

EMR

There’s a big debate brewing between the state Senate and the House of Delegates over what to do with sexual predators after they’ve served their jail time: Should they remain confined, in a process called civil commitment, or should some of them be returned to the community under heavy supervision including satellite tracking?

The House wants a 300-bed facility; the Senate wants 100 beds. Cost is a major factor. According to Newport News Daily News reporter Hugh Lessig: “The two sides are roughly $40 million apart in construction and operating costs for a civil commitment facility – the Senate around $36 million and the House around $76 million.”

I would lean toward’s the House position on this one, which errs on the side of public safety. But I don’t see it as a black-and-white issue. Cost is unavoidably a consideration — that $40 million could be used many other ways to improve public safety. So is the fact that sexual predators, having paid for their crime, do have rights.

Looks like Larry Sabato and the University of Virginia Center for Politics will be moving from their cramped quarters on the university grounds to the Birdwood estate near the Boar’s Head Inn and the Farmington Country Club — if $10 million can be found for renovations of the dilapidated old manor house, according to the Charlottesville Daily Progress.

Said Sabato: “It’s a gorgeous location and it looks back on an unspoiled view of the mountains Jefferson saw.”

Last year, Sabato gave $1 million to endow the Center’s programs.

Bad news from VDOT… The road-building agency spent $40 million more on maintenance in the first seven months of fiscal 2006 than it had planned. Now it’s trying to make up the deficit by cutting back on maintenance work and equipment purchases. Details at the Road to Ruin blog.

Here are the “Principles of Community” that will be enforced by the “SafeWatch” program in Virginia Tech (see previous post, “The Thought Police Have Arrived):

• We affirm the inherent dignity and value of every person and strive to maintain a climate for work and learning based on mutual respect and understanding.
• We affirm the right of each person to express thoughts and opinions freely. We encourage open expression within a climate of civility, sensitivity and mutual respect.
• We affirm the value of human diversity because it enriches our lives and the university. We acknowledge and respect our differences while affirming our common humanity.
• We reject all forms of prejudice and discrimination, including those based on age, color, disability, gender, national origin, political affiliation, race, religion, sexual orientation, and veteran status. We take individual and collective responsibility for helping to eliminate bias and discrimination and to increase our own understanding of these issues through education, training and interaction with others.
• We pledge our collective commitment to these principles in the spirit of the Virginia Tech motto of Ut Prosim (That I May Serve).

Most Virginians would share most of these sentiments. The problem isn’t the principles themselves, but how they are enforced, and who enforces them. A couple of red flags:

First: Everyone has the right to express themselves freely, but only “within a climate of civility, sensitivity and mutual respect.” Who defines what behavior falls within the acceptable parameters of “civility” and “sensitivity”? Who has the burden of proof when someone is offended by something someone else says — the person who took offense? Or the person who made the remark?

Second: “We take individual and collective responsibility for helping to eliminate bias and discrimination and to increase our own understanding of these issues through education, training and interaction with others.” Who’s in charge of the educating and training here? What form does that “education and training” take? And how much “diversity” of points of view is permitted?

Nervous yet? Now check the online “Incident Report Form.” If the political/philosophical orientation of this initiative doesn’t smack you over the head, here is all you need to know: People are asked to fill out “general information” about themselves. Under the “gender” category, there four (count ’em four!) choices: male, female, transgender, and questioning. Why not “neuter,” while we’re at it? We wouldn’t want to discriminate against castrati, would we?

Hmmm. I’m wondering… Could that last remark be construed as “insensitive”? Could I already be a candidate for “re-education”?

The Feb. 27, 2006, edition of Bacon’s Rebellion has been published. Columns include:

Seek the Intersection
Innovation can be managed, says Frans Johansson, author of “The Medici Effect.” And what individuals and enterprises can do, so can entire communities.
by James A. Bacon

What’s the Big Idea?
The people at Play don’t just talk creativity — they live it. When they advise clients to tear down “walls” and “boundaries,” they apply the nostrum to themselves — quite literally.
by James A. Bacon

The Special Session Is Now
The outline of a compromise on transportation funding is coming dimly into view: Some new funds now, a full-fledged plan later (maybe).
by Doug Koelemay

Legislation by Extortion
The state Senate is enacting spending programs predicated on taxes that haven’t been passed yet. Will Chichester & Co. get their way again by threatening another government shut-down?
by Patrick McSweeney

Standing up for Property Rights
The House of Delegates has passed legislation that will protect property owners from unjust takings. Unfortunately, the Senate’s version of the bill could do more harm than good.
by Patrick McSweeney

Goldman Silenced? I Doubt It
Paul Goldman hasn’t revealed his plans since resigning as Doug Wilder’s senior policy advisor. But you can count on one thing from the master political tactician: He’ll be back!
by Steven Sisson

$650 Million in Hiding
There is a lot more new money for transportation projects than commonly realized — if lawmakers would only count it!
by Michael Thompson

Red State Blues
Obsessed with raising taxes, Republican leaders in the state Senate risk transforming Virginia into a blue state — and losing their majority status in the bargain.
by Philip Rodokanakis

Stop Me Before I Tax Again
Not content with imposing a record tax increase in 2004, Virginia’s Imperial Senate proposes outdoing its meager effort with another, even bigger round.
by Jim Bowden

Little Boy Blue
Like the fabled farm boy who fell asleep while the farm animals ran wild, Virginia voters appear oblivious to out-of-control state spending — potentially 36 percent in just four years.
by Peter Ferrara

Nice & Curious Questions:
Branded Restrooms: What’s Next for Virginia’s Rest Stops?
by Edwin S. Clay III and Patricia Bangs

I’m sorry, sometimes I forget: Are we living in the United States, circa 2006, or are we living in the People’s Republic of China, circa 1969? It’s hard to tell with news like this: Virginia Tech has just launched a “SafeWatch” program to promote “individual and collective responsibility among students, faculty, staff, and guests” to incorporate the Virginia Tech “Principles of Community” into their interpersonal and intergroup relationships.

Patterned after “neighborhood watch” programs, SafeWatch will “promote understanding” of university policies and community expectations related to harassment, discrimination, or similar behaviors, and provide a way to report instances when policies and expectations are not followed.

Central to the program is a new SafeWatch website that provides a means for community members to report occurrences of discrimination or harassment related to age, color, disability, gender, national origin, political affiliation, race, religion, sexual orientation, and veterans’ status.

Just wait, this is a disaster waiting to happen.

Now comes news that the General Assembly is pondering legislation that would make it a misdemeanor to sell halal food — the Muslim counterpart to kosher food — in Virginia under false pretenses. An estimated 350,000 Muslims live in the Commonwealth. In Northern Virginia alone, there are some 45 mosques.

Everybody’s “for” education, and everybody wants to pump more money into Virginia’s educational system. From what I can tell, it looks like the Dems want to increase educational spending a lot more than the GOP-dominated House of Delegates in the next biennial budget. But I’ve seen very little discussion on the topic.

According to documents maintained by the Department of Planning and Budget, here are the budget numbers of the Department of Education, including Fiscal 2007 and 2008 proposed by departing Gov. Mark R. Warner:

FY 2003…… $ 9.55 billion
FY 2004…… $ 9.97 billion (+4.4 percent)
FY 2005…… $11.2o billion (+12.4 percent)
FY 2006…… $12.05 billion (+7.6 percent)
FY 2007…… $13.70 billion (proposed) (+13.7 percent)
FY 2008…… $13.95 billion (proposed) (+1.8 percent)

As can be readily seen, after the “starving time” of the early Warner administration, spending on education has soared, and would continue to soar if Warner’s proposed budget were enacted. The proposed 2007/2008 budget represents a 16.4 percent biennial budget-to-biennial budget increase.

Now, here’s what Vincent F. Callahan, Jr., House appropriations chairman, says the House budget is doing for education:

The budget will provide approximately $11.5 billion in funding for public education over the next two years. This represents an increase of $1.5 billion over the current funding level or approximately 36 percent of the net new revenues available. … The budget will invest approximately $419 million in additional general fund support for higher education. This represents an increase of approximately 13 percent over base funding levels.

If I’m comparing apples to apples, in the House budget, educational spending would increase “only” 8 percent from one biennial budget to the next. Bottom line: The House would increase education spending at half the rate of the Warner plan. (If I’m comparing apples to oranges, I’d appreciate it if someone would let me know.)

The House plan is a bad thing if you think the only solution to Virginia’s educational woes is pouring more money into the existing system. It’s a good thing if you think there’s a limited amount that the system can usefully absorb, or if you think the system needs serious reform. So far, I’ve seen very little debate on this issue. Any observations?

I just can’t get agitated about the Danny LeBlanc controversy. It’s not as if Gov. Timothy M. Kaine wants to appoint LeBlanc, a former state AFL-CIO president who opposes the Right-to-Work law, to Secretary of Commerce and Trade, where he could do some damage. The Governor wants to make LeBlanc Secretary of the Commonwealth, where he’s in charge of appointments to sundry boards and commissions — in effect, Secretary of Patronage.

That’s what happens when you win the election. You appoint a party stalwart to hand out rewards to your supporters. If LeBlanc doesn’t fill the position, Kaine will find another partisan ally to do the job. My advice to House Republicans: Get over it. Act nice. Throw the Governor a bone.

I’ve seen a lot of loose numbers thrown around regarding the size and impact of the 2004 tax increase on the current budget surplus. (I’ve tossed some of ’em around myself.) Here are hard numbers from Del. Vincent F. Callahan, Jr., R-McLean, chairman of the House Appropriations Committee. In a press release issued today, Callahan writes:

For those that were here during the 2004 Session, you may recall the General Assembly grappled with building a new two-year budget. At that time, it was expected that we would have approximately $1.8 billion in net new revenues available to meet our spending obligations. It was claimed that this was insufficient to meet the Commonwealth’s needs, and that additional revenue was needed. After a protracted debate and extended legislative Session, taxes were increased nearly $1.5 billion dollars. There was much self congratulation that Virginia’s fiscal house was back in order.

You may also recall that two months after that budget was adopted, Virginia received some surprising news, that the fiscal year would end with $325 million more than projected or perhaps predicted.

That happy news led to the first of several revisions to the revenue forecast during the current biennium. In fact, the most recent revision to the current fiscal year projects that general fund revenues are now forecast to generate an additional $1.4 billion over and above the revenues assumed when we left here last year.

Since that fateful day in May of 2004, the cumulative effect of Virginia’s growing economy means that what started out as $1.8 billion in new revenue growth now appears to be closer to $4.9 billion over the biennium, or 275% greater than the original biennial forecast.

The LiberalMSM (oneword) Daily Press (Feb 23,2006) on The Peninsula notes Del Waldrup (R- Va Beach) had a blog meeting on transportation. Catch how they say…

Waldrup “gathered with a collection of Internet acolytes on Tuesday night, saying on a Web blog, “the press doesn’t want to do their homework. Show me the money they say. They haven’t reported on a ton of legislation that is new and different. They just sit back and say that the House is paving the roads with school books, but what about all these increased revenues that we have accumulated from the surplus over the last two years?” Too bad they didn’t cite the blog addresses to let readers read all for themselves.

Then, the DP gave the first explanation I’ve seen for the buzzwords – sustainable, reliable, dedicated, permanent – revenues.

Apparently, dear Acolytes, they’re against borrowing money with bonds to pay for roads today. That’s odd. When we had the VA ballot referendum for huge bonds for the environment and higher education – they were all for those bonds. Also, they were terrified that VA would lose its AAA bond rating to keep borrowing – unless VA raised taxes in 04. Except, the report actually said VA could raise ONLY $800m in NEW bonds unless it spent less or raised more money.

The real rub is that the taxaholics (D and R) don’t want to use General Funds for Transportation. Ah, that is why we have the Transportation Trust Fund – the one regularly raided for General spending by Republicans and Democrats.

So, get this, using money from the General Fund or from the surplus in the General Fund or from bonds is wrong. The DP quotes His Lordship Sir John Chichester’s insight, “By its very definition, a surplus is inherently unpredictable and unreliable. We concluded this is not how we want to fund transportation in Virginia.”

Like the money for the General Fund, Transportation Fund, any bond issues and any other colored pot of money in Virginia Treasury comes from some sources that are subject to the economy going up and down and some that are not. LOL.

Earth to DP and Taxaholics: All revenues come from the economic health of the Commonwealth. If the economy goes down, revenues go down. If the economy goes up, revenues go up.

Let’s try it another way. If VA planned on spending $70b, but revenues after the Chicken-Little-the-Infrastructure-Is-Falling Tax hike, Bush’s tax cuts and massive Federal spending in VA – are $72b, then the $2b is a surplus. If the economy is expanding and the Gov and GA spend only $71b and taxes come in at $73b there will be another $2b ‘surplus’ the taxaholics can spend on anything – including transportation. It will continue that way IF spending dies NOT grow faster than inflation.

When the economy went down during the Clinton/9-11 recession of 00-02, the revenues flattened but still increased from $48 to $50b (or was it 50 to 52?) in VA because not every sector of the economy contracted – and not every household.

So, if our $72b revenues stayed flat at $72b for two years – if (IF almighty IF) the Gov and GA didn’t increase spending in other areas – the same money that was spent on transportation in one year would be available in the next – if they didn’t spend it on something else!

The business staff of the DP must be different from the editorial staff or they couldn’t make a profit. EC 201: The government gets its revenue from the same economy The People get their revenue from. The government gets their money from The People – including corporate taxes.

The distinction between these ‘sustainable, reliable, dedicated, permanent’ taxes for transportation and the ‘sustainable, reliable, dedicated, permanent ‘ of the 1985 transportation tax hike which would fix transportation forever is that these taxes are just new and additional taxes for 2006.

Last lesson from EC 201 (Department of Social Sciences, USMA)(or EC 10 at Harvard) is that every $150m in taxes kills 5000 jobs. The first to go are part time and minimum wage earners – the working poor.

Where is Jim Miller when we really need him?

The Danville Register & Bee has published some insight into to the thinking of two Republican delegates from Southside who supported the 2004 tax increase but oppose raising taxes in 2006.

Said Del. Danny Marshall, R-Danville, of the 2004 tax hike: “I thought it was the right thing to do.” He made his decision based on calls he received from teachers in his district who were worried about education spending and from Pittsylvania County sheriff’s deputies who were on food stamps. “That was then, this is now. … The difference to me is when I look at the needs of our region. … I’m not saying that transportation doesn’t need to be fixed in the state, but we are doing fine.”

Del. Robert Hurt, R-Chatham, also voted for the tax increase in 2004. “At the end of the day, I felt it was important to support a compromise that kept the state funded,” he said, citing concern about a possible government shutdown and the loss of Virginia’s AAA bond rating. “I just don’t see the need to do that in 2006. People in Southside Virginia are adamantly opposed to raising the gas tax.”

The editorial page of today’s Wall Street Journal singles out Virginia’s state Senate for well-deserved criticism. “If you think Republicans are Capitol Hill have trouble, take a look at Virginia,” the WSJ writes. The Senate rammed through $1.5 billion (biennial) tax increase in 2004, the state is running a $2 billion (biennial) surplus, property tax bills for median-priced homes in Northern Virginia have risen by $2,000 in six years, and now the Senate wants another $1 billion (per year)?

Last week the senators floated another tax plan that is so bizarre and complicated that it has made them a laughing stock. This scheme would raise the gas tax by 5%, but the sponsors insist that “no one would have to pay the tax if they didn’t want to,” because motorists could get a rebate at the end of the year if they keep shoeboxes full of tiny scraps of service station receipts. This would add immeasurably to the joys of April 15.

Good editorial in most respects. But it would have been better if the writer had gotten the details right. The WSJ referred to “state property tax bills.” The property tax is, of course, a local tax.

The WSJ also said: “Only 18 months ago this same senate gang rammed through a $1.5 billion sales tax incrase, even after 55% of the voters had defeated the same tax scheme when it was a ballot initative a year before.” Incorrect. Northern Virginia and Hampton Roads citizens voted in regional referenda against a sales tax hike to fund transportation. The sales tax rammed through by the Senate went into Virginia’s General Fund, mainly for education. The two tax schemes, though equally ill conceived, were very different.

There’s plenty to criticize with the real facts. No need to misconstrue facts to bolster the case.