Bacon's Rebellion

The July 25 edition of Bacon’s Rebellion has been posted online.

Here’s an editorial from the Roanoke Times on the Virginia Information Technology Agency’s secretive process for possible outsourcing. There are also hints of conflicts of interest. I wrote about this on Saturday; thanks to Becky Dale in the comments for the pointer.

1. Virginia voters are dialing in

2. Kaine up

3. Kilgore down

4. Potts gaining, enough of a factor to worry both, Kilgore most

5. Mark Warner is dominant, and, by implication, would beat Allen (like a baby seal?) head-to-head

6. House primaries predictive, Flat-Earthers getting flattened

7. Divisive social issues (Kilgore pitch) fading, bread-n-butter government (education, transportation) to the fore

8. Voters want Potts in the debates

9. Centrism rules, radical left and right holding sucker hands

10. All the marbles still up for grabs

Surprisingly, this blog, your source for stupefyingly wonkish coverage of state government issues, failed to flag yesterday’s Peter Bacque information technology story on the front page of the Richmond Times-Dispatch.

It seems that

Virginia’s information technology agency says it will keep secret the competing industry proposals for taking over major parts of the state’s IT sector.

The contracts, which are divided into two parts, are potentially worth billions of dollars to the winning firms and could affect the jobs of about 1,200 state employees.

First of all, who knew that the vaunted Virginia Information Technology Agency (VITA) needed this kind of help? Second, why the level of secrecy with this bidding, a secrecy not invoked by VDOT when it pursues public-private partnerships under the same authority?

I don’t know if this is a good idea or a bad idea, but I expect those who are suspicious of the private sector doing state work to be heard on this. If you like the influence of big corporations, you’ll love the companies involved in bidding on this work: IBM, Northrop Grumman, and Canada’s CGI-AMS. There is this comforting word:

The contracts would likely run from seven to 10 years, and should not cost Virginia any more than it now spends on IT services, said the state’s chief information officer, Lemuel C. Stewart Jr.

Have we heard that before?

Sen. George Allen was on the “Imus in the Morning” radio show this morning, being interviewed about terrorism. It was a nice slot to show a little gravitas, with events in London unfolding as he spoke.

Allen is serious about running for president. The best way to demonstrate that one is not a stereotypical “wingnut” is to appear on a show where the favorite guests are Sen. McCain, Sen. Kerry, and Sen. Dodd. A lot of conservatives avoid shows like Imus, perhaps because of its frequent raw humor. They’re losing a lot of exposure.

Well, the FY 2005 numbers are in. The final budget surplus: $544.4 million. That’s over and above the $900 million or so surplus anticipated earlier this year, which the General Assembly allocated to the Rainy Day Fund, road projects, Chesapeake Bay clean-up and other causes.

In a press release issued by the Governor’s Office, the Warner administration downplayed the long-term significance of the surplus, implying that it may not be replicable. Stated the press release:

More than three-fourths of the surplus was generated by quarterly non-withholding payments made by individuals who receive substantial amounts of income from stock market gains, bonuses, and other non-wage income; from unusually strong growth in corporate income taxes; and from taxes and fees paid on home and real property sales – the three most unpredictable sources of state revenues.

Gov. Mark R. Warner will allocate $436.5 million to the Rainy Day Fund, bringing that fund’s total to about $1.1 billion, or the maximum allowable by law. He will apply another $54.4 million to the Water Quality Improvement Fund, $26 million to the Transportation Trust Fund and $25 million to assist localities affected by the Base Realignment and Closure Process.

Here’s where it gets interesting. Between their actions in the 2005 session and the disposal of the year-end surplus, Warner and the General Assembly will have spent roughly $1.4 billion this year on “one-time” allocations. It will be interesting to see how Warner applies that uncommitted revenue flow to the next biennial budget, which he submits to the General Assembly as one of his last actions in office. The Rainy Day Fund has largely maxxed out, so Warner can’t divert any more money there. He will have four choices: Spend it on programmatic increases, spend it on more “one-time” allocations, give it back to taxpayers… or continue lowballing revenue forecasts.

Giving any of the surplus back to taxpayers is the last thing he’ll do, even though it is now roughly twice as large as the sum he raised through higher taxes. That would be tantamount to admitting that the 2004 tax increase — the signature accomplishment of his administration — was utterly unnecessary.

Equally interesting is what Tim Kaine and Jerry Kilgore would do with that money when one of them succeeds Warner. So far, no one has posed that question to them. But the issue will confront the winner immediately upon assuming office. Virginians should insist that both candidates focus on it.

“Virginia Beach and the Shenandoah Valley might be prime destinations for vacationers this time of year, but those on a job hunt would be wise to head north on Interstate 95,” reports Washington Post reporter Elissa Silverman. “Northern Virginia accounted for 96.3 percent of the state’s job growth since last spring, according to new numbers from the Virginia Employment Commission.” (Am I being defensive, or do I detect a little big city disdain for the hinterlands here?)

According to Silverman, Northern Virginia accounted for “49,100 of 51,000 new jobs statewide in the year that ended in May.”

Everyone knows that economic growth in Northern Virginia is stronger than anywhere else in Virginia, but could it possibly be that lopsided? I checked the latest VEC press release, which covers employment growth between May 2004 and May 2005. These job growth numbers come straight from that report:

Harrisonburg: 2,600 new jobs, up 4.4 percent
Northern Virginia: 49,100 jobs, up 4.0 percent
Blacksburg/Christiansburg: 2,700 new jobs, up 4.0 percent
Richmond: 13,100 new jobs, up 2.2 percent
Roanoke: 2,900 new jobs, up 1.8 percent
Lynchburg: 1,600 new jobs, up 1.6 percent
Winchester: 900 new jobs, up 1.6 percent
Charlottesville: 1,000 new jobs, up 1.1 percent
Hampton Roads: 5,400 new jobs, up 0.7 percent
Danville: Unchanged

Clearly, NoVa dominates job creation in Virginia. But add up the numbers for metro areas in RoVa (Rest of Virginia) and you get job creation of 30,200. Given 49,100 new jobs in NoVa, 30,200 new jobs in RoVa metro areas, and a net job creation of 51,000 for the entire state, these numbers imply that non-metropolitan areas lost about 28,300 jobs.

It’s totally misleading to say that NoVa accounted for 96.3 percent of all job creation in the past year — a statement that implies that hardly any jobs were being created anywhere else in Virginia. Job creation was just as strong in Harrisonburg and Blacksburg as in mighty NoVa. In Richmond, Roanoke, Lynchburg and Winchester, job growth exceeded the national average of 1.5 percent. Memo to the Washington Post: Rural Virginia is hurting, but Virginia’s metro areas are holding their own.

When I went to the The Washington Post website this morning, a huge pop-up ad for West Virginia busted through my pop-up blocker and covered my screen: “More Bonding Than the Federal Reserve.” Oh, please.

Virginia is for Lovers. Don’t ever be annoying like that.

In its final quarterly report for Fiscal 2005, the Virginia Department of Transportation noted that the number of VDOT employees had declined from 10,001 employees to 9, 126 — even while improving performance on key metrics such as completing construction and maintenance jobs on time and on budget. (See the Virginian-Pilot article here.)

That’s an impressive performance — probably the most impressive performance of any state agency under the Warner administration. The increase in productivity and quality excels even in comparison to the private sector. Here’s my question: How does that compare to other state agencies? We don’t know. The reason we don’t know, I suspect, is that other agencies aren’t tracking their performance the same way. If they are, they aren’t talking about it. Otherwise, they surely would be trumpeting their achievements.

According to federal Bureau of Labor Statistics data, Virginia state government overall has been adding to payroll, not cutting it over the past year. Average state employment for the first four months of 2005 was 182,675, compared to 181,650 the year before. Remember, those aggregate numbers include VDOT’s cuts of nearly 900 employees, implying a growth of nearly 2,000 employees for non-VDOT agencies. (Disclaimer: These numbers are not authoritative. The BLS does not classify jobs the same way the state does. But the figure do indicate a trend.)

Conclusion: State agencies aren’t exactly on a hiring binge, but the era of budget-crisis parsimony appears to be over. For certain, taxpayers aren’t seeing the hoped-for gains in state enterprise productivity they have every right to expect.

Tim Kaine may have offered “None. Zip. Nada.” in the way of new spending initiatives at the Greenbrier debate, but apparently he does have new spending plans. On a day where Jerry Kilgore was endorsed by the National Federation of Independent Business, Kaine conducted a “town hall” meeting at Capital One in Goochland, covered by Tyler Whitley of the Richmond Times-Dispatch. His campaign put out a press release saying, “Kaine has proposed a $500-per-employee tax credit to small businesses to offset health-insurance costs.”

Now this seems like a budget buster on par with Kilgore’s $500 tax credit to parents for tutoring, but getting health insurance to more Virginians is an important issue. Kaine has done a lot of good work exploring health insurance options for small business and a debate about how to do it is worth having, although business issues certainly don’t capture the imagination like the old, tried and true endless debate on abortion.

As proof that Kaine is not wedded to higher taxes, he did not ask Capital One employees, “What’s in your wallet?”

In a Richmond Times-Dispatch front page story on the increase in Virginians seeking post-secondary education, the Chancellor of the Virginia Commmunity College System had this to say:

[Glenn] DuBois said he’s pursuing increased state financing but also contemplating innovative ways of raising money through public-private partnerships, local government contributions and even regional taxes agreed to in referendums (emphasis mine).

Remember what Russ Potts has told us over and over again: “Referendum is spelled C-O-W-A-R-D.”

Not exactly big news, but it confirms what we already know: The real estate and construction industry is by far the largest donor to Virginia political campaigns this year. Sayeth an Associated Press article today:

The group, dominated by developers, general contractors and real estate agents in particular, amassed contributions exceeding $6.2 million to candidates for governor, lieutenant governor and attorney general, according to an Associated Press analysis of reports compiled into a database by the Virginia Public Access Project.

It is much larger than the No. 2 source of cash, the $3.9 million transferred among political parties, political action committees and candidates, and is more than double the $3 million law firms contributed.

What are the implications? I’m glad you asked:

Large gifts by the people who plan, finance, build and sell homes, office parks, shopping plazas and entertainment complexes … represents an enormous investment in politicians who will have an enormous influence on state tax, transportation and urban policies as the teeming suburbs of northern Virginia, Hampton Roads and Richmond struggle to keep services current with developments that seem to leapfrog one another.

Thanks AP, I couldn’t have said it better.

From the official transcript, Tim Kaine on new spending: Kaine made no reference to new spending during the debate. None. Zip. Nada.

From the official transcript, Jerry Kilgore on new spending:

“My better pay for better teachers plan will bring performance pay in the public education system.” (pg.14)

“I am committed to giving parents tax credits—up to $500 per child—to empower them to purchase tutoring or other educational supplies.” (pg. 14)

(Note: 2001-2002 Virginia public school enrollment: 1,144,770 students @ $500.00 each = $572,385,000.00 = something over half a BILLION dollars @ no new taxes = Neat Trick!)

“I am going to reward our teachers with bonuses…’ (pg. 18)

“I have a transportation plan that will work, will bring more dollars into the transportation system by using general fund dollars—those dollars that come from you income and sales taxes.”(pg. 22)

“I will work with the Bar and the Supreme Court to increase funding, the hourly rate that we do pay those who represent indigent defendants—I think that is an important step forward for our future.” (pg.69)

From the official transcript, Jerry Kilgore on how he will pay for these spendings:

“We can move Virginia forward in the future without raising taxes.” (pg. 49)

“I believe we can lower our taxes and fulfill our promise to fully phase out the car tax…” (pg. 56)

Did Tim Kaine truly club Jerry Kilgore, in the inestimable words of Barnie Day, “like a baby seal” in Saturday’s gubernatorial debate? Don’t heed the spin-meisters, make up your own mind based on the documentary evidence. The Bacon’s Rebellion blog presents the Virginia Bar Association transcript of the debate.

(Thanks go to Steve Haner for tracking this down and passing it along.)