Bacon's Rebellion

  • Charlottesville’s Path to Polarization, Part 1

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    James A. Bacon

    The Lee Statue in Charlottesville

    by Reed Fawell III

    This is the first of five posts on the events surrounding the white nationalist protests against efforts to remove the Lee and Jackson statues that occurred in the spring and summer of 2017 in Charlottesville, Va.

    America’s national and local media constantly make references to the August 11/12, 2017, white nationalist protest rally in Charlottesville. Typically, these allusions render an over-simplified judgment without facts, nuance, context or perspective. Consequently, the rhetoric inflames public opinion, exacerbates the harm done by the rally, forecloses the possibility of reconciliation, and makes it more difficult to prevent a recurrence in the future.

    The media’s short-hand references to “Charlottesville” display a woeful ignorance of the demonstrations and political events in the city during 2016 and 2017 that preceded and influenced the events of August 11/12. Absent that string of events, the outcome of the August 11/12 Unite the Right rally surely would have been very different. Indeed, the event and the violence it engendered might never have taken place.

    Fortunately, there is an antidote to our national amnesia — the Final Report, Independent Review of the 2017 Protest Event in Charlottesville written by Timothy J. Heaphy with the Hunton & Williams law firm. Drawing on meticulous research of that report, I hope to shed light on those earlier incidents, discern their underlying causes, and explain how they shaped the events of August 11/12.

    Here we will start with a chronology of events leading up to the July 8 and Aug 11/12 protests, taken almost exclusively from the Independent Review. To avoid personalizing the narrative, I have deleted the names of participants.

    From March 2016 to June June 2017:
    Events Leading up to July 8 and August 12 Disturbances in Charlottesville

    In March of 2016, Charlottesville’s Vice Mayor and a University of Virginia professor and chairman of the local NAACP called an “unscheduled rally in Charlottesville.” There the Vice Mayor “expressed distaste for the Lee Statue” and the UVA professor argued that the statute evoked “all the horror and legacy for black people. It romanticizes for people who do not know. They look at that statute, they think it was a gallant person who saved us, but he was a terrorist.” The vice mayor then urged Charlottesville to remove the city’s two statues of Lee and Jackson.

    This rally in downtown Charlottesville ignited at virulent controversy. The debate over the future of the statues became “a significant factor in the radicalization” of a local leader who would become a key figure in the later Unite the Right rallies in Charlottesville,” a man who “described himself as an advocate for ‘white civil rights’,” one who “believed that whites were unfairly asked to “apologize for history” and to ‘deny their cultural heritage’.” He was also reportedly angered by the Vice Mayor’s urging the boycott of a UVa lecturer’s restaurant for criticizing the Black Lives Matter movement on his Facebook page. Later, too, based on research turned up by that white nationalist leader, the vice mayor resigned his job at Albemarle high school for having posted “racially offensive and inflammatory statements” on Twitter before he’d moved to Charlottesville in 2011.

    Thus, in March of 2016, there began a long series of escalating rhetoric and actions by opposing factions within the Charlottesville community that, over the ensuing 18 months, would cascade into the tragic events of August 11/12, 2017.

    For example, on May 28, 2016, the Charlottesville City Council, responding to local pressures, created a Blue Ribbon panel whose designated objective was to provide the Council with options on how to tell “the full story of Charlottesville’s history of race and changing the city’s narrative through its public spaces.” That fall, on Nov. 10, the panel delivered its draft report. It recommended that the Lee and Jackson statues remain in place while adding context to the monuments, telling a fuller story about what they represented. The “draft” report changed in December, however, when the same panel offered one of two options for the Council to consider: that context be added if the statues be left in place, or that they could be removed. On Feb 6, 2017, the City Council by 3-2 vote ordered the removal of the Lee statue.

    The council’s vote sparked a lawsuit in March 2017 claiming that removing the statue would be illegal, and that the city was required by law “to protect and preserve” the statues. The Court affirmed the plaintiffs’ request to stay the City Council’s order. That litigation on the merits of the case continues unresolved today, although the court did affirm the city’s right to change the names of Lee and Jackson Park.

    Meanwhile, on Jan. 31, 2016, Charlottesville’s mayor called “an unscheduled” rally to protest the inauguration of President Trump. “Hundreds gathered in Charlottesville’s downtown mall” where the mayor proclaimed the city “The Capital of Resistance to Trump’s agenda.” A Charlottesville police officer later noted that in his view: “The mayor’s event was tantamount to war. The mayor’s rhetoric was ‘the recipe for undermining the legitimacy of the institutions of government’.” (more…)

  • Dominion Seeks Approval for Experimental Wind Turbines

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    James A. Bacon

    Dominion Energy rendering of the experimental wind turbines.

    Dominion Energy Virginia has submitted to the State Corporation Commission a proposal to build two wind-generating turbines 27 miles off the coast of Virginia Beach — arguably the most expensive research project ever funded by the Commonwealth. The experimental turbines will not produce 12 megawatts of electricity at a remotely economic cost. But they will provide data that could pave the way for a vast wind farm that would produce electricity far more economically.

    The project will test new designs to anchor the turbines in seabed conditions found off the Virginia coast and to withstand hurricane-force winds. The feedback is necessary before anyone undertakes utilizes the technology in a wind farm with dozens of turbines potentially costing billions of dollars.

    The power company has been trying to advance the two-turbine project for several years but refrained from filing with the SCC for fear that the Commission would reject it as too risky and expensive. What’s different this time? First, it has lined up an experienced partner, Ørsted, a Danish company that has installed more than 1,000 turbines in European waters, to manage the project. Second, it has brought down the cost to about $300 million, significantly lower than previous iterations. Third, with the enactment of the Grid Modernization and Security Act, the state has declared wind power to be in the public interest.

    And fourth, Dominion says that it can build the turbines without increasing rates. The project, said CEO Thomas F. Farrell II at the announcement in Norfolk yesterday, “will not increase customer rates even a penny.”

    Here’s how I understand how that works. Before enactment of the Grid Transformation Act, Dominion would have paid for a large capital project like this one through a Rate Adjustment Clause, in which capital costs would be passed along to customers. The selling point of the Grid Transformation Act is that rates remain frozen but Dominion will apply excess earnings, which normally would be returned to customers, to renewable energy, energy-efficiency and grid-upgrade projects instead. It’s a convoluted way to go about things, but it has the virtue of stability.

    I’ll be interested to see how Steve Haner, Bacon’s Rebellion’s electric consumer advocate, responds to this development. 

    One last point: Just because the General Assembly has declared wind energy to be in the public interest, that’s no guarantee the SCC will go along. The SCC still has to balance cost, reliability and environmental sustainability — along with risk. Three hundred millions dollars is a lot of money to spend on what amounts to a research project. In analyzing the pros and cons of the experimental wind turbines, the SCC presumably will look also at the pros and cons of the wind farm that the experimental turbines would make possible. Given the lack of an established wind-power infrastructure on the East Coast, how much would a full-fledged wind farm cost to build? How would the cost of electricity compare to other energy sources? And would such an intermittent energy source improve or diminish the reliability of Virginia’s electric power supplies?

  • Health Care Dies in Darkness

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    James A. Bacon

    VCU Health System has broken ground on a $349 million outpatient facility, the largest investment in its history.

    The City of Richmond has an annual budget of about $700 million a year. The city gets loads of coverage by local media. Henrico County has an annual budget of about $1 billion a year. County government doesn’t warrant the same number of column inches or minutes of air time, but local media do catch the highlights.

    The publicly owned and operated VCU Health System has a budget of about $1.5 billion a year. The quality of medical care there has just as critical an impact on the lives of the Richmond-area residents as, say, schools, roads, and municipal services. Moreover, increases in hospital charges have rapidly outpaced the increase in local tax rates for years — perhaps decades. Yet no one raises a peep, and local media tell us nothing about the hospital’s internal deliberations.

    My purpose here is not to dis local media, which are under tremendous cost-cutting pressure and have shrinking resources to cover the news. It is simply to suggest than an institution so large and vitally important to a community — and the same could be said of Sentara in Norfolk, Riverside in Newport News, Carilion in Roanoke, Inova in Northern Virginia, and the University of Virginia Hospital in Charlottesville — needs public accountability. Oversight is all the more imperative when an institution enjoys nonprofit status that frees it from the burden of paying property taxes, sales taxes, corporate income taxes, and miscellaneous levies and excises.

    It’s fair to say that the general public knows almost nothing about how VCU is run, what it’s long-range goals are, or how well it’s doing its job. Its annual report (like all annual reports) is essentially a public relations document. The only glimmer of accountability comes from the Virginia Health Information website, which compiles hospital data and publishes some “efficiency” metrics,  but provides no narrative analysis.

    VCU Health generated an operating income of $136 million in fiscal 2016 — $120 million, if non-operating gains and losses are taken into account. It enjoys a protected market thanks to state and federal restrictions on competition. What is the public getting for the quasi monopoly status conferred upon VCU and the massive profits it generates? Not efficiency, that’s for sure.

    Source: Virginia Health Information

    Virginia Health Information compares gross and net hospital revenues per admission, adjusting for the acuity of cases. (As a tertiary care hospital and trauma center, VCU gets a disproportionate share of the hard cases, but the VFI methodology accounts for that.) For both categories, VCU falls within the most expensive quartile of hospitals, as shown in the table above.

    Source: Virginia Health Information

    VHI also looks at underlying costs. Again, VCU consistently comes out as one of the most expensive hospitals in Virginia, whether labor cost per admission, non-labor cost, or capital cost. Other tables shows that productivity/utilization ratios fall in the bottom two quartiles.

    Despite these unfavorable comparisons — which VCU undoubtedly will say are unfair, perhaps with good reason — the health system retains $120 million a year in profits (what VHI terms “Revenue and gains in excess of expenses and losses”). An industry rule of thumb is that hospitals need to retain 3% of their earnings to reinvest in new plant, equipment and technology. VCU retains 8%, a difference of about $75 million a year.

    In theory, VCU could rebate that $75 million a year to the community in the form of lower charges to patients. But hospital management, with the backing of the VCU board, has chosen to invest in institutional expansion. That includes, most controversially, significant expenditures to create the Virginia Treatment Center for Children, even though philanthropist William H. Goodwin had pledged to give $350 million to create an independent children’s treatment and research hospital. VCU declined to collaborate with Goodwin, preferring to charge ahead with plans to keep the children’s hospital under its own corporate umbrella. Goodwin has not announced how he might otherwise dispose of his proposed gift, but there is no guarantee that the Richmond community will be the beneficiary.

    Nonprofit hospitals, like colleges and universities, are not profit-maximizing institutions — they are prestige-maximizing institutions. Hospital administrators don’t go into the hospital business to make massive fortunes (although they do very nicely). They go into the hospital business to enhance the status of the institutions with which they are affiliated. Nonprofit status is not some magic fairy dust that makes self-interest and self-dealing disappear. As with the quest for profit, there is no limit to how much money hospital leaders will spend to advance their institutional standing in a never-ending race with other institutions seeking to do the same.

    These massive revenue- and profit-generating enterprises — VCU is hardly alone — operate with no effective restraint or public oversight in Virginia. For time immemorial, Virginia’s news media has defined its mission as holding government entities accountable. It’s high time they begin holding nonprofit universities and hospitals accountable as well. But they can’t — they lack the resources. As nonprofit universities and hospitals metastasize, growing swaths of Virginia’s economy function in darkness.

  • Will Dominion Appeal Latest Loss At SCC?

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    Steve Haner

    Daily Press photo of Yorktown Power Station

    Michael Martz has a good report in this morning’s Times-Dispatch on the State Corporation Commission’s opinion trimming Dominion Energy Virginia’s proposed transmission charge.  The SCC ordered the proposed Rider T going into effect next month reduced to reflect the lower federal income tax rates.  It also rejected the utility’s argument that a payment it was receiving from the PJM regional transmission entity was a generation cost it should be allowed to book against base rates instead of against Rider T.  Booking it against base rates would in effect make it profit.

    The payments are made because PJM asked Dominion to continue operating its Yorktown plant for reliability reasons.  The SCC wrote: “Legally, these payments are part of the PJM Transmission Tariff, which explicitly states that — in this particular instance — the generator is providing a “transmission service” for which PJM is assessing “an additional transmission charge” of $12.7 million. Accordingly, the Commission finds that both (1) the charges assessed, and (2) the payments made, by PJM under the PJM Transmission Tariff for this transmission service shall be reflected in the Subsection A 4 revenue requirement.”

    As the biggest beneficiary of that increased reliability, Dominion is actually providing about half of the money to PJM which is then repaid to Dominion.  How does it collect its share?  In Rider T.  These are all transmission dollars.

    The adjustments ordered by the SCC will save more than $2 per month on the mythical 1,000 kwh residential customer bill.  The question now is, will Dominion appeal the decision to the friendly Supreme Court of Virginia?  In its final written arguments to the Commission it pointed to the legislative provision (which of course it wrote) that these costs are on their face “reasonable and prudent.”  Reading the SCC opinion (not yet up on its website) it is obviously laying the groundwork for its argument in any possible appeal.

    If the appeal is filed it will have little to do with this issue and a great deal to do with the battles to come over Dominion’s massive grid investment plan, just getting underway.   The tax issue involved more money, but the argument over the payment from PJM for maintaining operations at the Yorktown power plant goes right to the heart of the legislative declaration of “reasonable and prudent” and the utility’s game of moving costs back and forth between base rates and rate adjustment clauses when it improves its bottom line.

    Previous Bacon’s Rebellion posts on this issue can be found here and here.

  • A Mercifully Brief Coal-Ash Update

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    James A. Bacon

    Coal ash at the Chesterfield Power Station. Photo credit: Richmond Times-Dispatch

    A year ago, Virginians couldn’t open up a newspaper without reading about Dominion Energy’s coal ash controversy. Then the issue disappeared from view. Months passed without news of any kind. Then earlier this week, I noticed a stray phrase in Dominion’s 2nd quarter 2018 financial results: The company had written off $81 million to reflect the cost of closing its coal ash ponds at its Bremo, Possum Point, Chesterfield and Chesapeake power stations. 

    Wondering if Dominion had written off coal ash-closure expenses in previous quarters, I contacted Dominion spokesman C. Ryan Frazier. He confirmed that the company had made three previous write-offs, bringing the total this quarter to $377 million so far.

    The write-offs reflect the cost of two things mainly: (1) treating and draining the coal ash ponds of water, and (2) consolidating the ash at each power station in a single containment basin. Dominion’s preferred plan has been to cap those basins with an impermeable synthetic liner covered by vegetation. However, environmental groups and neighbors fear that groundwater will migrate through the coal ash, pick up heavy metals and leak into public waters.

    In April 2017, the General Assembly passed a law ordering the Virginia Department of Environmental Quality VDEQ not to issue solid waste permits for closure of the coal ash ponds until Dominion had conducted an assessment of closure alternatives. Depending on the option chosen, concluded the report written by Dominion’s consultants, landfilling the coal ash could cost between $1 billion and $3 billion. Environmental groups argued that Dominion had significantly overstated the costs and had not given serious consideration to recycling the combustion residue into concrete and other products.

    In April Governor Ralph Northam signed legislation into law extending the permit moratorium until July 2019. The law, says Frazier, requires Virginia Power to compile by November 2018 “information from third parties on the suitability, cost and market demand for beneficiation or recycling of coal ash from these units.”

    So, there you have it, folks. The coal ash fracas now can safely fade from view again for another three or four months.

  • Medicaid Expansion and the Coming Gusher of Hospital Profits

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    James A. Bacon


    S&P Global Ratings, a big-three bond rating agency, predicts that Medicaid expansion will be “credit positive” for Virginia hospitals by reducing the level of uncompensated and charity care. Reports the Richmond Times-Dispatch:

    The report does not change the current credit ratings of any Virginia health system, but S&P credit analyst Anne E. Cosgrove said the positive outlook “should help their bottom lines.”

    “If you don’t have as much uncompensated care, this should help your underlying profitability,” Cosgrove said in an interview on Wednesday.

    Virginia hospital officials played down the S&P announcement because they said enrollment under expanded Medical eligibility hasn’t begun and the benefits will vary among health systems depending on the mix of patients they serve.

    Let’s get a sense of what the impact will be when an estimated additional 400,000 Virginians enroll in Medicaid. I have downloaded the latest financial data for Virginia acute care hospitals from the Virginia Health Information website, as displayed above. Collectively, they provided $2.6 billion in charity care and wrote off $1.9 billion in bad debts in the fiscal year 2016. They also made nearly $1.7 billion in profit (including “surplus” revenue reported by nonprofits).

    Speaking in rough numbers, the federal and state budget for Medicaid expansion will inject about $3 billion annually into Virginia’s health system. I don’t know how that money is to be distributed between acute care hospitals, physicians, long-term care facilities and other medical providers. But for purposes of illustration and subject to verification, let us assume that one-third goes to acute care hospitals, thus reducing charity care and bad-debt write-offs by $1 billion. Virginia hospitals still will be providing a lot of free health care, but they could see a roughly 60% increase in profits.

    So, yeah, I expect Medicaid expansion will be “credit positive” for the industry.

    Now, let’s conduct another mental exercise. Let’s ask what the impact will be on Virginia’s most profitable hospitals. I totaled the charity care and bad debts for each institution and assumed that Medicaid would reduce them by one-third. Please note, these estimates represent no more than a Scientific Wild Ass Guess useful only for ascertaining order-of-magnitude effects. Here’s what the numbers look like:

    Of the hospitals reporting the highest profits in FY 2016, all but Henrico Doctors Hospital were “non profit.”

    As Bacon’s Rebellion readers know, I think profits are a beautiful thing. But some profits — those that arise from innovation, productivity, efficiency, and the like — are more socially beneficial than others. Profits that arise from creating monopolies and cartels, restricting competition through the exercise of political influence on government rules and regulations, and relentlessly jacking up charges to paying patients is not socially beneficial. The problem is compounded when the entities engaging in this behavior are nonprofit. Whatever else you say about the business practices of Andrew Carnegie, Henry Clay Frick and John D. Rockefeller, at least they paid taxes!

    Bacon’s Rebellion will be watching hospital profitability closely. The big question: What will the highly profitable non-profits do with the gusher of money? Will they hold down charges to patients… or will they continue plowing the money into institutional expansion?

    Update: Readers have pointed out that hospitals’ reports of charity care are wildly inflated because they are pegged to absurdly high nominal prices for care that almost no one pays. One implication is that hospitals are far less generous than they purport to be. Another is that my methodology for calculating the financial impact of Medicaid reform on profits is inflated by a similar amount.

  • Sport of Kings Needs Peasants Playing Slots

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    Steve Haner

    Horse Race Slot Machine Circa 1937 (Not What’s Coming Now)

    The Sport of Kings apparently cannot survive today unless between races the peasants are pumping their copper into slots.

    “The new law acknowledges what several other horse racing states already have concluded: that the new economic realities to sustain a viable horse racing industry require an alternative form of gaming to offset the high cost of live racing,” writes industry advocate Jeb Hannum in today’s Richmond Times-Dispatch. (more…)

  • Health Care Subsidies, Regulation and Market Failure

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    James A. Bacon

    The United States devotes nearly 20% of its economy to health care but is widely regarded as getting less for its money than most other countries with advanced economies. What is driving costs so high? The Wall Street Journal suggests some answers, which totally vindicate Bacon’s Rebellion’s analysis in every regard. The Journal’s bottom line:

    Americans aren’t buying more health care overall than other countries. But what they’re buying is increasingly expensive. Among the reasons is the troublesome fact that few people in health care, from consumers to doctors to hospitals to insurers, know the trust cost of what they are buying and selling. In some cases, costs are largely secret. Providers, manufacturers and middlemen operate in an opaque market that can mask their role and their cut of the revenue. Mergers give some players more heft to enlarge their piece of the pie.

    Percentage of consumer expenditure devoted to health care. Source: Wall Street Journal

    This chart shows how health care is hogging an ever-increasing share of consumer expenditures on health care. Notice where most of the growth is coming from — health insurance. Consumers are spending less out of their own pockets and more, indirectly, through Medicare, Medicaid, and private insurance. Explains the Journal:

    Contributions to employer-sponsored health coverage aren’t taxed, which makes it less expensive for companies to pay workers with health benefits than wages. Generous benefits lead to higher spending, according to many economists, because employees can consume as much health care as they want without having to pay significantly more out of their own pockets.

    The tax benefit is the country’s biggest single income-tax break, amounting to an $854 billion subsidy.

    Source: WSJ

    Meanwhile, thanks largely to state and local regulatory policies, the hospital industry is consolidating and health care systems are exercising greater power in the medical marketplace than ever before. Inflation in hospital prices, along with inflation in pharmaceutical prices, are driving health care cost increases far more than charges for physician and clinical services, as can be seen above.

    Source: WSJ

    Research shows that competition does matter. In markets with less competition, consumers pay more for common procedures, as seen in the chart to the left. The revenue of health care companies represented nearly 16% of the total revenues of firms in the S&P 500 last year, up from about 4% in 1984, states the Journal. (Presumably, that does not include revenues of nonprofit healthcare companies. They, too have, soared.)

    Here in Virginia, profitability of healthcare companies is extremely healthy. While a handful of rural hospitals are losing money, the big hospital chains and healthcare systems are immensely profitable — regardless of whether they are for-profit or nonprofit.

    How have hospitals done it? In part  by working the political system to rig the rules in their favor — whether through Certificate of Public Need (COPN) regulations at the state level or inserting rules in the Affordable Care Act that effectively banned physicians from competing with hospitals by restricting outpatient clinics. Health care companies have more than doubled their lobbying spending (adjusted for inflation) since 1998. They also have increased their share of total lobbying expenditures by all industries.

    Source: WSJ

    These numbers are all national in scope, and they undoubtedly reflect significant variation by state. But they are entirely consistent with what I have seen and blogged about in Virginia. Where the data allows and I have time, I will try to document trends for the Old Dominion.

  • Can’t Get Enough of Them Bacon Bits…

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    James A. Bacon

    Wages of the teaching scandal. Every 5th-grade student at Richmond’s George W. Carver Elementary School passed the Standards of Learning (SOL) reading test in 2016. Next year, when they took the reading proficiency test at Albert Hill Elementary School, only 37% passed. Math scored plunged nearly as badly.

    A state investigation has found that a five-teacher cheating ring at Carver had inflated SOL scores by giving pupils “inappropriate” assistance during the tests. The school and its principal had garnered recognition for the high achievements of its poor, inner-city pupil population.

    Public education in Virginia is massively failing lower-income kids, especially in inner-city African-American communities. Meanwhile, the usual suspects continue to peddle the “racism” narrative for the abysmal educational achievement.

    The rich (regions) get richer, the poor get poorer. One of the largest employers in Bristol, Bristol Compressors, is closing — and eliminating 470 jobs along with it. The Herald-Courier has the grim story here. Meanwhile, packaged food giant Nestle is relocating its American headquarters from California to Arlington, bringing 750 jobs. Read that story in Arlington Now. Both developments will have multiplier effects, negative for Bristol and positive for Arlington.

    In a truly free market economy, workers in Southwest Virginia would move to Northern Virginia to take advantage of job opportunities there. Although laid-off Bristol Compressor employees don’t have the jobs skills required by Nestle, plenty of blue-collar jobs are going being in NoVa. Trouble is, blue-collar workers can’t afford the real estate. Zoning codes and comprehensive plans in NoVa are rigged in favor of incumbent homeowners and against anyone wanting to move into the region, be they inner-city blacks or Appalachian whites.

    Immigrants seem not to have a problem finding places to live. My pet theory: They tolerate overcrowded living conditions — sometimes in violation of local codes — that native-born Americans would not.

    Christmas banned from Metro buses. The Catholic Archdiocese of Washington wanted to run an ad on Metro buses depicting with three shepherds, sheep and a bright star, reports the Washington Times. The words “Find the Perfect Gift” were displayed on the ad, along with a website address and social media hashtag. The website promoted the Catholic Church with a link to “Parish Resources,” prayer cards and daily reflections.

    The Metro refused to run the ad on the grounds that it was religious. The Archdiocese retorted that Metro runs ads for yoga, which has links to Buddhism and Hinduism. Metro didn’t buy the argument. And neither did the U.S. District Court for the District of Columbia. Wrote Judge Judith W. Rogers: “City buses … enjoy no historical tradition like parks and sidewalks because transit was a private enterprise in most American cities until the second half of the twentieth century.”

    And people wonder why cultural conservatives say there is a war against Christmas. I find the Metro policy incomprehensible. As far as I’m concerned, any faith — Judaism, Buddhism, Islam, Wicca, the Church of the Flying Spaghetti Monster, or, gasp, any of the dozens of offshoots of Christianity — should be allowed to advertise. Question: Does atheism (my personal belief) count as a religion?

  • More HQ2 Madness

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    James A. Bacon

    Amazon has listed a job posting online for an economic development manager to locate in the Washington metropolitan area, spurring a new round of speculation that the technology giant may locate its second headquarters facility in the region.

    According to Inside NOVA, job responsibilities include “working directly with state and community economic development, workforce and labor, taxation, and other key government agency officials, as well as chambers of commerce, utilities, and other key public/private stakeholder groups.”

    (The Inside NOVA article linked to the job posting. Since then, apparently, Amazon has taken it down. The URL now delivers a the-page-you’re-looking-for-seems-to-have-disappeared message.)

    Meanwhile, Las Vegas odds makers now rate Northern Virginia as the top contender to win the Amazon sweepstakes, followed by Washington, D.C., with Montgomery County, Md. also a contender. From the Odds Shark website:

    Which City Will Win the Bid to Host Amazon HQ2?

    Odds as of July 26 at Bovada

    • Northern Virginia, Virginia +240
    • Washington, D.C. +350
    • Austin, Texas +400
    • Boston, Massachusetts +450
    • Toronto, Ontario +500
    • Atlanta, Georgia +900
    • Montgomery County, Maryland +1200
    • Philadelphia, Pennsylvania +2000
    • Raleigh, North Carolina +2500
    • Pittsburgh, Pennsylvania +3000
    • Chicago, Illinois +4000
    • Nashville, Tennessee +4000
    • New York City, New York +4500
    • Denver, Colorado +5000
    • Dallas, Texas +5000
    • Indianapolis, Indiana +5000
    • Columbus, Ohio +5000
    • Newark, New Jersey +5000
    • Los Angeles, California +6000
    • Miami, Florida +7500

    Brace yourselves, folks. Amazon is expected to make an announcement by the end of the year.

  • Working? A Republican Anti-Poverty Plan Works?

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    Steve Haner

    Source: IRS.gov

    “The federal EITC, together with the Child Tax Credit, lifted nearly 200,000 Virginians out of poverty each year from 2011 to 2013, including nearly 100,000 children.”

    Lifted out of poverty.  Let that sink in a minute.  The writer of that sentence is admitting that the federal Earned Income Tax Credit lifts people out of poverty.  And it wasn’t even part of President Lyndon Johnsons’ Great Society but was enacted in the era of GOP Presidents Richard Nixon and Gerald Ford.

    I lifted the sentence out of a report on the website of the Commonwealth Institute for Fiscal Analysis, which was called to my attention by a piece  distributed this morning by Virginia Mercury.  The people at the Commonwealth Institute also recognize that Virginia is poised for a long-needed discussion on tax policy, thanks to the opportunity provided by the major changes at the federal level.   It would be a perfect time to discuss again a refundable state version of the EITC, which the state has resisted because of the cost.

    The federal EITC is refundable, meaning if the taxpayer has not paid in as much in taxes as the credit, the unused balance of the credit is paid out in cash just like a refund.  Virginia’s EITC is just a credit, and if the credit is larger than the tax owed the tax bill goes to zero but there is no cash-back refund.

    The 2018 General Assembly defeated the most recent effort to convert the credit, House Bill 716.  The fiscal impact statement put on an incredibly high quarter-billion dollar price tag, which I suspect is wrong.  If it is not inflated, Virginia should be ashamed it is taking that much tax away from low-income families.

    The Commonwealth Institute report noted that just over 80 percent of eligible Virginia taxpayers are claiming the federal credit, meaning almost 20 percent are ignoring it.  Even without converting it, it probably makes sense to get more people to file.  The size of the credit is tied to income and family size, and it’s possible many of the people taking a pass wouldn’t have much of a credit anyway.

    When it suits some advocates for low-income programs, they ignore the real value of existing efforts that do provide cash or services to that population.  Note that the child tax credit is also mentioned as important, and other programs not listed keep people above abject poverty abound, supplemented by private efforts. Do the poor have it easy in this country?  Hardly.  But the entire picture needs to be seen.

    As Virginia stumbles quietly toward a tax debate over whether and how to conform to the new IRS rules, a state refundable EITC deserves to be one of the big ideas.

  • Lobbyist Forms Not Mentioned At Council Meeting

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    Steve Haner

    A Peek Inside the Process

    The state’s Conflicts of Interest and Ethics Advisory Council met Tuesday making no mention of  my column published in July 21’s Richmond Times-Dispatch, pressing for specific bill numbers, budget item numbers and other details on the state’s lobbyist disclosure forms.  I had been told in advance the issue wouldn’t be added to the agenda.

    In fact the council’s meeting lasted less than 30 minutes, had no business items, and the only vote was on previous meeting minutes.  Those minutes reveal that the June meeting’s big decision was to approve a staff suggestion to add student loan balances among debts disclosed by public officials.

    I don’t want anybody to think I’m making up the complaint that the forms disclose nothing at all, despite a direction to be as specific as possible, so I pulled a few examples at random.  Who owns up to working on which of the 3,722 individual pieces of legislation at the 2018 session?   

    As previously noted on July 9 most of the filings lack specifics and the Conflict of Interest and Ethics Advisory Council has sent signals this is acceptable with its published examples.

    Loudoun County Chamber of Commerce: “Business Issues.”  Well, that narrows it down to 600 or so bills.

    Virginia Chamber of Commerce: “Executive and Legislative Actions and Procurement Transactions.”  I looked at this a few times before I realized it simply repeated back the phrase from the question.    

    Mecklenburg County: “Matters involving issues affecting local government.”

    Fairfax County Water Authority: “Matters of interest to the Fairfax County Water Authority, including but not limited to, issues arising under the Virginia Water and Waste Authorities Act.”  But not limited to. 

    Norfolk Southern Corporation: “All matters affecting Norfolk Southern Corporation.”

    City of Norfolk: “Local government.”

    Virginia League of Conservation Voters: “Matters related to land conservation, land use, energy issues, and transportation financing.” (more…)

  • Tasty Bacon Morsels of the Day…

    Posted on

    by

    James A. Bacon

    Lots of updates to stories we have been following here on Bacon’s Rebellion:

    How to lose in a landslide. The media was all over the story about racist posts by a Corey Stewart campaign consultant. Here’s the lead from the Richmond Times-Dispatch: “Republican Senate candidate Corey Stewart has paid more than $100,000 to a campaign consultant who has called the NAACP a “more violent” version of the KKK and said only a “fool” would start a business in a black neighborhood.”

    John Whitbeck, the immediate past chairman of the Republican Party of Virginia, had the following reaction: “The Democrats’ only message against us right now is we’re racists, because they don’t have any agenda and they don’t have any message. If you make despicable tweets like that, all you’re doing is feeding the narrative that the Democrats are trying to use against us.”

    From every sign I see, Stewart is going down in political career-ending flames. The only interesting question at this point is whether he will drag down the Republican Party with him. Meanwhile, Libertarian Party candidate Matt Waters, where are you? There are thousands of homeless Republicans right now who might want to vote for you — if only they knew you were out there.

    Cheaters never prosper. A state investigation has found that a five-teacher cheating ring at Richmond’s Carver Elementary School gave pupils “inappropriate” assistance during Standards of Learning (SOL) tests. Some teachers helped students if they raised their hand or indicated whether items were correct or incorrect, reports the Times-Dispatch. The school had garnered recognition for the high achievements of its poor, inner-city pupil population.

    School principal Kiwana Yates, who had received the R.E.B. Award for Distinguished Educational Leadership, has been replaced, but remains in the employ of the Richmond school system.

    Will they strike or won’t they? In continued negotiations with its labor unions, Washington Metro management has agreed to raise wages for office employees and to stop outsourcing 31 of 271 janitorial jobs. In exchange, AFL-CIO Office and Professional Employees International Union Local 2 agreed to let Metro raise the health care insurance contributions of its members, creating a savings for the money-losing mass transit organization of $2.3 million. Said General Manager Paul J. Wiedefeld: “We didn’t get everything we hoped for and neither did Local 2; however, this agreement fairly compensates employees while reducing Metro’s costs.”

    Standing up for intolerance. Two historians have resigned from the University of Virginia’s Miller Center to protest the appointment of Marc Short, former legislative affairs director for the Trump administration. Melvyn P. Leffler and William I. Hitchcock said the appointment runs “counter to the Center’s fundamental values of nonpartisanship, transparency, openness, a passion for truth and objectivity, and civility.”

    “Democracy today in the United States is in peril,” they wrote, according to the Washington Post. “… We must not normalize or rationalize hateful, cruel and demeaning behavior. When we see things to be wrong, we must speak out and take a stand.”

    So, the solution to Trump’s partisanship is to trump it with ever greater partisanship? The response to Trump’s intolerance is to demonstrate even greater intolerance to those associated with him?

  • Transparency for Thee But Not for Me

    Posted on

    by

    James A. Bacon

    Is Ralph Nader the driving force behind UnKoch My Campus?

    In response to attacks from left-wing critics, the Charles Koch Foundation said last week that it will post all future multiyear agreements with universities online. The Foundation is one of the nation’s most generous contributors to higher education in the United States, ladling out $90 million in gifts in 2017. Among the biggest beneficiaries has been the Mercatus Center, a free market/fiscal conservative think tank, and to a lesser degree the Antonin Scalia Law School, at George Mason University

    Reported the Wall Street Journal last week:

    Private colleges and universities aren’t subject to public-record disclosures; some public-university relationships are forged through the schools’ foundations, which can also be exempt from disclosure requirements. Some schools receiving Koch grants have shared the agreement details publicly, but historically not all have been required to do so.

    The UnKoch My Campus group has led the criticism of Koch Foundation influence at GMU and elsewhere nationally. Ironically, it is not clear who funds UnKoch My Campus or what strings might be attached to its funding agreements.

    In an age in which politics is polarized — and in which everything is deemed political — “dark money” is a massive issue. Millionaires and billionaires influence public policy not just directly through campaign contributions and paid lobbyists but indirectly by funneling foundation money through programs to influence public opinion — as well as those, such as university scholars and new media outlets, who shape public opinion.

    Although the Koch Foundation has committed to increased transparency, its critics are not satisfied.

    “Unless they are going to release all past agreements, and documentation for all their programs, Koch is not providing clarity, but simply executing a p.r. move to deflect scrutiny from the programs on hundreds of campuses where they continue to leverage undue influence for private gain,” Ralph Wilson, research director for UnKoch My Campus, told the Journal.

    At least the Koch Foundation files a 990 form with the Internal Revenue Service, which you can view here. The foundation may not live up to UnKoch My Campus’s lofty ideals for transparency, but then… neither does UnKoch My Campus.

    UnKoch My Campus does not publish any agreements it has with funders. It doesn’t even identify its funders. Indeed, it doesn’t even file a 990 form. Here’s what you see when you search the Foundation Center’s 990 finder:


    While UnKoch’s web page says nothing about where it gets its money, if you want to donate, you can stroke a check to “Essential Information,” a Washington, D.C.,-based outfit, founded in 1992 by Ralph Nader, whose affiliation is not explained.  You can see a a 990 form for Essential Information here.

    Reporting total assets of $86,000, Essential Information does not appear to have an endowment or to be otherwise self-funded. The group reported receiving $382,000 in gifts, grants and contributions in 2016 but it did not identify the source of those funds.

    The foundation listed $97,000 in salary and other administrative expenses, and it listed the Free Africa Foundation as the recipient of a $25,000 grant. (The previous year, it gave $50,000 to the Environmental Action Center.) The foundation provided no indication of how the other $260,000 was spent.

    The president of Essential Information is listed as John Richard, who devoted on average five hours of week to foundation duties. And who is John Richard? According to the Public Citizen website, upon whose board he sits, he “supervises staff at The Center for Study of Responsive Law, the hub of Ralph Nader’s public interest activities in Washington.”

    The Center for Study of Responsive Law takes donations on its website, but does not say where its money comes from. The Center’s 990 form is only partially illuminating. The group collected $808,000 in 2016, and it supported a staff of 11 with wages, payroll taxes and benefits of $574,000. Where did that money come from? The group didn’t say. And what did the Center spend its money on? Three things mainly: two Breaking Through Power conferences, the DC Library Renaissance Project and “a wide variety of research and educational projects to encourage government and corporate institutions to be more aware of the needs of the citizen consumer.”

    Did Ralph Nader’s Center for Study of Responsive Law donate money to Essential Information and/or UnKoch My Campus? Publicly available data provides no answer. Where did Nader’s $808,000 in 2016 contributions come from? Did he rely upon small-dollar donations? Did he self-fund? Did he rely upon one or two big donors? If there is a funding agreement in the mix, I’d love to see it. Good luck with that.

  • Irony: Clean Money Group Donates More than Power Company

    Posted on

    by

    James A. Bacon


    The Virginia Public Access Project has updated its list of largest campaign donors in Virginia, and the results making good reading.

    My money is cleaner than yours. Perhaps the most fascinating tidbit is that Charlottesville-based Michael Bills, founder of Clean Virginia and scourge of Dominion Energy Virginia’s influence on state politics, has injected more money into the political system than Dominion has so far in 2018-2019. Bills donated $245,000 while Dominion contributed $190,940. (The Dominion number does not include personal contributions by Dominion executives. CEO Thomas Farrell, for example, has given $7,500 so far. Dominion executives Paul Koonce and William Murray chipped in $5,000 and $4,500 respectively. Still, Bills managed to give more than Dominion’s PAC and executives combined.)

    Clean Virginia’s mantra: “In Virginia, corruption is legal, and it is time for that to end.” Clean Virginia’s solution: The organization out-bids its sworn enemy for the loyalty of Virginia legislators.

    To my mind, the most fascinating untold story in Virginia politics today is the rise of Charlottesville’s landed aristocracy as a bankroller of liberal and Democratic Party causes. Virginia’s horse country gentry helped lefty Tom Periello nearly unseat moderate Ralph Northam in the 2017 Democratic Party nomination for governor. I view Bills’ Clean Virginia initiative as a continuation of that momentum.

    Speaking of big money… Democratic PACs and allied groups totally dominate the list of largest donors. These include the Stronger Together PAC, which raised money for Northam’s campaign; the Laborer’s District Council, which gave heavily to the Northam campaign; and the Commonwealth Victory Fund and the Legislative Majority PAC, two Democratic Party-aligned groups.

    The biggest GOP-leaning donor was William B. Holzman, a Shenandoah Valley oil and gas distributor. Collectively speaking, Virginia’s big businesses — Dominion, Comcast, Verizon, Altria, and the Realtors and Bankers associations — lean to the GOP but they spread their money between both parties. If political power in the General Assembly shifts to the Democrats, the corporate money likely will follow.

    How will the media cover this story? As far as I can tell, only David Ress with the Daily Press has reported on the latest VPAP numbers. His focus, unsurprisingly, was Dominion — although he took a man-bites-dog angle on the story, noting that the utility is not the biggest campaign contributor this year. I’m waiting for the media to start showing the same level of interest in the other big-money players as it does in Dominion. And don’t get me started about all the “dark money” sloshing around the system. I’ll save that for another day.

    Postscript: By the way, U.S. Senator Tim Kaine is out-raising Republican Corey Stewart by a ratio of about 17 to one. Clearly, Virginia’s moneyed class is avoiding the Trumpier-than-Trump candidate like the Ebola virus. Worse for Stewart, he’s even losing the small-donation race (less than $200) by a margin of about three-to-one. This race will be a wash-out. The Virginia GOP looks like it’s in huuuge trouble.

Now Available

Book cover of 'Dust Mites: A Second American Revolution' by James A. Bacon, featuring astronauts planting a flag with a blue and white emblem on a lunar landscape, with Earth visible in the background.
For sale on Amazon.com

The year: 2075. The American colonies on the Moon are getting restless under Washington’s tyrannical rule….

This second edition of “Dust Mites” has a snazzy new cover, includes helpful lunar maps, and is 5,000 words tighter than the original. The sequel, “Trogs,” is scheduled for publication this summer.

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Bacon’s Rebellion is Virginia’s leading politically non-aligned portal for news, opinions and analysis about state, regional and local public policy. Read more about us here.

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