Tag Archives: Stephen D. Haner

Ratepayers Cover $760,000 Line for One Customer?

Highest cost projects from DEV underground line program phase three,with lifetime revenue requirement from ratepayers. Source: SCC pre-filed testimony.

The State Corporation Commission staff audit of Dominion Energy’s ongoing effort to place residential and small business electric service tap lines underground has turned up some expensive examples.  A handful of lines will cost ratepayers hundreds of thousands of dollars over time to serve a single residence.

The average cost for the first 18,000 customers getting new lines is about $50,000 each based on my own calculation.

Those are the all-in costs for planning and constructing the lines, then adding the interest cost or profit margin depending on how the utility financed it. The projection uses the current 9.2 percent return on equity. The money is collected over the estimated useful life of the new lines, about 40 years.  For phases one, two and three the total cost with financing is about $921 million, according to the SCC staff analysis.

The SCC staff compared the full capitalized cost of installing the highest-cost lines to home values.  “This means it is possible in some instances that the company could have purchased the customer’s homes at a lower cost than undergrounding their tap lines,” testified David J. Dalton of the SCC staff.

This program to expand underground lines is something else paid for with a specific monthly charge on everyone’s bill, a rate adjustment clause known as Rider U.  It is also something else that the General Assembly has deemed to be in the public interest and virtually off-limits to SCC challenge.

Photo: Dominion

The annual review of the program to adjust the billing charge is underway now and was the subject of a hearing at the SCC Tuesday. With big questions settled by the legislature, the discussion is focused on minor issues such as accounting changes or how the costs are allocated between various classes of customer.

The largest industrial customers are exempt but everybody else under the SCC’s jurisdiction pays, including the 600,000 customers who already have underground service (and paid for it themselves) and the unknown number who will never get underground service.  For that mythical average residential customer using 1,000 kwh per month, the current charge is 55 cents per month and Dominion is asking to raise it to $1.98 as of next February.

The legislature has authorized this to go until at least 2028, and Dominion expects to place 4,000 miles of lines underground in 12 phases at a direct cost of $2 billion and a fully-capitalized cost of almost $6 billion.  At that point the residential charge will be more like $5 per month.  The charge for commercial or small industrial customers was not reported.

Spending other people’s money is very popular.  The record on this case includes favorable comments from Senator Glen Sturtevant (R-Richmond), Delegate Vivian Watts (D-Fairfax) and several local officials where the program is active.  A spokesman for the American Red Cross attended Tuesday’s hearing in person to testify about that organization’s support, noting how wonderful it is not to have your power go out.  At the end he said his own house has already been upgraded under the program.

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An Unfortunate Turn in Bike Lane Debate

This sign is perfectly clear, right?

As almost always seems to happen in Richmond — and it’s disappointing — a neighborhood debate in Northside over a planned dedicated bicycle lane may turn into something else.

“Given the economic environment, the needs of people, anything that limits access to more affordable transportation options does everyone a disservice, but particularly people of color,” said Najeema Davis Washington, who co-founded Black Women Bike in 2011.

I wrote about the proposal at the start of this month, taking a skeptical stance.  This column in today’s Richmond Times-Dispatch by Michael Paul Williams included that quote at the top to set the tone. He has one basic hammer, and everything is a nail. In this case I think he might be hitting his thumb.

A proposed Richmond City Council ordinance would stop the plan to take two lanes of Brook and dedicate them (with barriers) for bikes 24/7. It was set for the July 23 agenda but delayed, perhaps to gather more information on impact or to reconsider alternatives. I sometimes see the patron, Council President Chris Hilbert, around the condo building where we both live and haven’t pressed him for details on the delay.

My primary purpose in writing the first column was to raise the issue, because I think most homeowners in the area were unaware. I also had seen the problems on Franklin Street, and admittedly people are getting used to the new configuration (but they do not like it). Williams’s column in today’s paper is the first mention of Brook Road in that medium, and the more people who know, the better. (One Richmond TV station has also covered it.)

I also brought it up because transportation is probably the issue that addicted me to this blog, as Bacon and I wrangled over highway taxes, etc. Apparently, there are federal funds available to encourage localities to take perfectly good highway lanes out of service – who knew? I’ve learned the phrase road diet!

The people who have the biggest stake in this issue are the property owners along the route, and most of the properties are single or multifamily residential. Many more apartments are coming. Many homeowners park on Brook, lacking driveways or alleys. The proposed bike lanes run from the Gilpin Court housing project up to Henrico County, past Virginia Union University and Union Seminary and a hospital. It is a very diverse neighborhood, which is one reason I like it. I’m sure people of color are on all sides of this discussion, and some homeowners will welcome this because it will divert traffic somewhere else.

Just yesterday I drove up Brook and a tractor-trailer was waiting to turn left at a light at a big intersection. It had its butt end sticking out in the traffic lane. It’s a long wait for that turn light and if that had been the only lane for cars, a multi-cycle backup would have resulted. Maneuvering around it reminded me of my concerns. My opinion matters less than those of people directly on Brook or the closest side streets. As a city taxpayer, however, it might matter a bit more than an advocate from DeeCee.

Updates: Money, Power and Politics (Oh, My)

The following are updates on earlier Bacon’s Rebellion stories of mine.

Clean Virginia Files First Report

Clean Virginia Fund, the political action committee that is trying to buy legislators’ loyalty away from regulated utilities, has filed its first report with the State Board of Elections.  Charlottesville financier and hedge fund magnate Michael D. Bills is the only donor, putting in $50,000.  Two senators and nine delegates, all Democrats, accepted a total of $32,500.  Dominion Energy and Appalachian Power donated a combined $175,000 during the same period so if this is really a bidding war, Clean Virginia has some catching up to do.

Hunton Andrews Kurth, the Richmond law and lobbying firm, is off to a slow start, giving only $23,000 on this report.  The firm drew notice for saying it would not support legislators who refused donations from its utility client.  Its largest check was to the Democratic Commonwealth Victory Fund, which supports both House and Senate candidates in that party.  (Dominion Energy gave to that, too.)

Somehow I don’t think any of the legislators who are refusing corporate or utility dollars will refuse help from that party committee. The check was probably to attend the Democrat’s annual event at the Homestead, where I’m sure all had a nice chin wag over the bar or on the golf course.

Dominion Energy Doubles Down on T1 Rider Taxes

Responding to an adverse recommendation from a State Corporation Commission hearing examiner, Dominion Energy has filed comments asking the full commission to ignore her opinion and make the customers pay too much.

Its first and most important argument is that the commission doesn’t have the authority to exercise discretion over the future transmission charges under rate adjustment clause T1.  It points to language in the 2007 statute that created this RAC and the whole system of RACs.  In the case of transmission costs under T1 the language says that any bill from regional transmission entity PJM is presumed to be reasonable and prudent.

This isn’t about the taxes, it’s about that language.  That “reasonable and prudent” presumption is even more frequent in the statute now, thanks to the 2018 legislation.  This is once again proof that Dominion inserts that phrase (and it writes these bills, no legislator does) to override the judgement of the SCC.  Those of us who worked on that 2007 statute never contemplated that Dominion would take advantage of that presumption to self-calculate its charge based on false information – in this case an erroneous tax rate.

If the SCC stands with its hearing examiner, expect the utility to take the battle back to the Virginia Supreme Court or back to its friendly legislators.  Once again, as it has been for more than a decade, the only real issue is will the legislature listen to the SCC or let the utility make it own laws and rules.

The AG Giveth, the AG Taketh Away

Attorney General Mark Herring has notably been a bit less predictable than many previous AG’s on the question of who his client is, if the state law or regulatory position he would normally defend was highly unpopular with various interest groups.

He earned praise in many circles recently for deciding to have his staff defend certain abortion-related regulations, but now has decided to not let his staff join in the appeal of a recent decision on legislative districts and the Voting Rights Act.  The Republican legislators seeking a delay on drawing a new map pending that appeal will need to fund their own legal efforts.

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Shrinking Community Colleges Looking to Pivot

Germanna Community College

Nothing like losing a quarter of your customers to get your attention.

That basically is what has happened to Virginia’s Community College System, with last term’s enrollment down 57,000 (actually only 22 percent) from its peak six years ago during the early days of the economic recovery. That drop exceeds the total enrollment at the 17 smaller campuses and has cost the institutions millions in revenue and forced personnel cuts.

Chancellor Glenn DuBois and two of the community college presidents shared that information and spent about an hour Tuesday with the State Council of Higher Education for Virginia laying out steps underway to attract more students, which will have to happen if Virginia is to meet the goals it has set for degrees and work certifications.

DuBois, who has served as chancellor since 2001, spoke again during the meeting at Richard Bland College of his vision of “a college graduate in every household” and of abolishing the phrase “first-generation student.”

One response has been only modest increases in VCCS tuition and fees for the coming year, at 2.5 percent below the official inflation rate and in stark contrast to the four year institutions. The annual cost for a full semester load is around $5,000, but DuBois noted that is still a great deal of money for many Virginians. Students in the community colleges are older, lower income, working part time. Fifteen of the 23 schools have food banks.

Like many of his predecessors, Governor Ralph Northam has made education and workforce development a high priority and Northam talked during his campaign about lowering or eliminating the cost of attending the public community colleges. About 20 states now have some version of a “promise program” where all or some high school graduates face no tuition bills at community colleges.

DuBois said that remains under discussion, which was confirmed a bit later in the meeting by the Governor’s Chief Workforce Advisor Megan Healy. But with a price tag in the hundreds of millions of dollars, “I don’t think that’s going to happen this year,” Healy said. In 2019 the General Assembly will be considering budget amendments, but the Governor doesn’t do his own full budget until 2020.

Absent a sudden commitment to free or almost free tuition, a VCCS task force responding to the situation focused heavily on marketing and process improvements. They are leaving the comfort zone, DuBois said, using words like “pivot” and “evolve.”

What if students didn’t have to apply to attend? The system is working on an open enrollment approach, but it isn’t there yet. It is making progress on reducing the paperwork and migrating the application process to smart phones. People should enroll in one day, “one and done,” said President Janet Gullickson of Germanna near Fredericksburg. “Believe it or not, that’s radical.”

The task force also said to make scheduling, degree planning, advising and even payment and financial aid compatible with the mobile environment. An early alert system can flag a struggling student, so a counselor reaches out to them rather than the other way around.

Do people understand how an associate degree or even a workforce certificate can boost their income? Better marketing may spread the word about the FastForward program which offers reimbursement grants on completion of a workforce credential. The grants “sold out” in their first two years and the General Assembly boosted the funding for this new budget, which may sell out again.

The target audience is no longer 18 to 24-year-olds. DuBois mentioned a Winchester man who lost his long-time job at a recycling center, came to the community college looking for his GED, but in 12 weeks earned a manufacturing technician certificate. He quickly landed a job with 40 percent more pay and, for the first time in his life, full benefits. He will be highlighted as the 10,000th FastForward graduate.

Another popular certificate program for forklift operations takes just four days. Before any of these programs is approved there is a demonstrated demand for the skills.

Gullickson mentioned a basic marketing problem she found at Germanna when she started – no one able to translate for Spanish students dealing with administrative matters. With the changing demographics in that region, the website needed a Spanish version, at an 8th grade reading level so the parents of potential students could understand it.

Work continues eliminating remaining barriers or duplicate requirements for students seeking to start at a community college and then transfer to a four-year institution. There are state grants for that process, too, which not long ago was getting the most attention as a new role for the community colleges. But based on comments Tuesday, the long-term response to the current challenge may be a system that looks more like its original 1960’s focus on workforce training.

Virginia Tuition Hikes Exceed Inflation Again

Cost of attending a four-year state college as a percent of household income. Click for interactive version. Sources: Penn and Vanderbilt

Tuition and mandatory fees at Virginia’s state colleges and universities are rising an average of 5.3 percent for the term starting next month, eighty percent faster than inflation.  The increase at the state’s community colleges for next term of 2.5 percent tracks well behind the current 12-month consumer price index (2.9 percent).

The report is contained in advance materials for the July 17 meeting of the State Council of Higher Education in Virginia. Director Peter Blake reports tuition and fees will increase by an average of $669 at four-year institutions and $113 at Virginia’s community colleges under charges set recently by the institutions’ governing boards. Increases range from $330 at Virginia State University to $1,100 at Christopher Newport University. “The systemwide increase is slightly higher than the increases in the previous two years,” he wrote.

2018 tuition and fee hikes. Source: SCHEV

Looking at tuition alone, the average increase is just under 6 percent, but smaller growth in mandatory fees softens that a bit.  Four years at the College of William and Mary will cost a new freshman paying the full freight almost $94,000 (before room and board), but at that school each incoming class’s in-state tuition rate is fixed for four years. A new in-state student at the University of Virginia will need at least $66,000 for four years but may face three more tuition hikes before graduation.

Christopher Newport University in Newport News had the largest overall increase on a percentage basis, 8.1 percent, and the new cost of four years there for new in-state students is $59,000 (again, with further increases likely.)

Out-of-state price compared to cost. Source: SCHEV

Out-of-state students pay substantially more in tuition than the cost of their education, according to another chart in the SCHEV data. It is more than double at some schools, and close to double at others. The pattern between Virginia and William and Mary reverses, with Virginia charging the higher premium for non-Virginia residents.

The state provides more than $2 billion annually from taxpayers as direct support for the schools or financial aid for individuals. The General Assembly increased General Fund support for the schools by more than $165 million in the new budget, but with most of the additional dollars in the second year of the budget starting July 2019. The increase for the coming school term for operations and aid was a modest $17 million. Much of the new money over the period is going to things unrelated to classroom instruction.

On Friday SCHEV sent out a news release focused on University of Pennsylvania data showing that Virginia’s higher education system faces lower risk than almost all other states. Whether that is because of Virginia’s strength or weaknesses in other states is unclear. It still warned Virginia’s population would not have the needed number of degree or certificate holders by 2025.

Virginia’s 4th graders were highly-ranked compared to other states on the National Association of Educational Performance but only 47 percent were proficient or better in mathematics, and 43 percent proficient or better in reading. By 8th grade those were down to 38 and 36 percent.  In four years those 8th graders are the college admission pool.

The Penn report ranked Virginia 41st on affordability. It included interactive charts comparing the affordability of state systems across the country by comparing costs to average household incomes. Cross-referencing the recent CNBC business network’s Best States for Business ranking, Virginia and Massachusetts had the highest costs on that basis among the top ten states, at 32 percent of household income. Five of the ten had costs at or below 25 percent of household income, with Florida the lowest at 20 percent.

Virginia’s community colleges, which are seeing significant enrollment declines, cost only 17 percent of average household income. That is right in line with most of the other top-ten states in CNBC’s list, with Colorado and Minnesota the most expensive for two-year degrees.

A debate continues to rage over whether rising school costs are driving away students, but the Virginia schools under the largest enrollment pressure, the community colleges and the two historically-black institutions, stand out in the SCHEV data lower overall costs, lower cost increases, and lower mark-ups for out of state students.

SCC Examiner Rejects Dominion Tax Argument

A State Corporation Commission hearing examiner has rejected Dominion Energy Virginia’s arguments that it was correct to ignore a lower federal income tax rate in calculating transmission costs for 2018 and is recommending that the full commission give ratepayers the benefit of the lower tax rate immediately.

Chief Hearing Examiner Deborah V. Ellenberg’s ruling was issued July 9, following a June 29 hearing where Dominion employees said it had to use the 35 percent tax rate in calculating bills running into 2019, even though the federal corporate income tax rate had dropped to 21 percent effective January 1 of this year.  This was the subject of an earlier Bacon’s Rebellion post.

At issue is the rate adjustment clause (RAC) known at Rider T1, which passes along to customers the utility’s cost for transmission services.  It is one of several elements on monthly bills and the utility was seeking a substantial increase.  Dominion had put the higher monthly cost for a residential customer using 1,000 kilowatt hours at more than $4, with higher amounts hitting larger customers.

At the hearing Dominion argued that the T1 rate is driven by a formula approved by the Federal Energy Regulatory Commission (FERC) that includes as a factor the base federal rate, and it had to plug in the higher previous tax rate because it hadn’t consulted with stakeholders since the tax rate had changed.   Consumer advocates at the hearing said there was no prohibition on correcting the rates based on the new tax rate.   The hearing officer agreed.

“I find it disappointing that the Company has taken the position that the revenue requirement should include a 35% federal income tax rate that is no longer in effect rather than incorporate the significantly lower tax rate made effective even before the Company made its informational filing with the FERC in January 2018, and well before it filed this Application in May 2018,” she wrote. “It could, and should have, like other utilities, revised its annual filing to include the known and certain tax rate change. I recommend the Commission direct the Company to file a corrected annual filing with FERC effective January 1, 2018.”

The RAC tariff in question is due to be adjusted September 1 and stay in place 12 months.   Ellenberg suggested that the full commission adjust the new rate to reflect the lower taxes, saving consumers $71 million during the period.  She also suggested an additional reduction of $46 million to reflect the lower tax liability during the first eight months of 2018.  Dominion was arguing that consumers would have to wait until the true-up process in future cases to see rates adjusted to reflect the lower tax rates.

Ellenberg ruled against Dominion on a second point, involving a $13 million credit being paid to Dominion by the regional transmission organization PJM.  Dominion argued that payment was for generation services at its Yorktown plant, which is staying open longer than planned.  Ellenberg agreed with the SCC staff, the Attorney General and other consumer advocates that the payment was for transmission services and should reduce the revenue requirement for Rider T1.  The cost of operating Yorktown is fully recovered in base rates and the fuel charge.

If the full commission adopts her recommendations, Dominion’s request for $755 million for Rider T1 over the next 12 months will be reduced to $625 million, which is about the same as was approved a year ago.  That wipes out the 20 percent increase requested by the utility, with any increase in transmission costs being balanced by the lower taxes.

Back In Top 5, The Challenge Is To Stay There

Corks are popping all over Richmond as the business network CNBC announced this morning that Virginia is back in the top five of its annual survey of best states for business, ranking number 4.  It is the only state in the top five east of the Mississippi. The full Virginia report is here.

The photo on the CNBC page shows a Huntington Ingalls-built warship, but one of the amphibious ships built in Pascagoula, Mississippi.  Perhaps the web designers remember that the first time Virginia topped this list as number one the announcement was made from pier 3 at Newport News Shipbuilding with the future U.S.S. George Bush in the background as Governor Robert McDonnell took the bow.

Governor Ralph Northam will get to enjoy the spotlight this time, and should, but the credit needs to be spread widely. The person doing handsprings should be Stephen Moret, president of the Virginia Economic Development Partnership, who has been focused on improving these rankings since coming to Virginia to fix a broken agency its reputation.

Speaker Bill Howell and the others who joined with McDonnell in pushing forward the transportation tax package years ago deserve a nod, as those projects are starting to come on line. Virginia’s rank for infrastructure improved from number 25 in 2017 to number 20 for 2018, and may continue to rise now.

Also improved over last year was the ranking for education. Despite growing costs Virginia’s higher education system, public and private, remains the envy of many other states, but the focus now extends beyond degrees to work-related certifications.

This ranking is a marketing coup with no immediate value to the average Virginian. Staying in the top five over time will have value, however, as more business location or investment decisions start with Virginia on the short list.

Looking at the details there are only a handful of individual categories where the state ranked extremely well (workforce, education, business friendliness) and only two where Virginia was below the median – the related categories of cost of living and cost of doing business.  First or second quintile scores in several categories resulted in the good overall score.

Those outliers deserve some attention. A huge component of the cost of living and cost of doing business is the cost of electricity and other forms of energy, and the trend lines there are bad despite the energetic public relations efforts of a certain large utility. Another huge component of both is state and local taxes, which are under growing pressure to rise and where Virginia has a chance to be creative thanks to federal tax reform.

Not a time for any resting on any laurels. But some martinis at lunch are indicated.

State Employees Not Funding Own Retirement

Source: VRS Report to JLARC

State and local employees, like many of their peers in the private sector, are declining in droves to contribute to their own retirement plans, despite the availability of matching funds, a.k.a. free money which compounds for decades.

The Virginia Retirement System has been putting new hires into a hybrid retirement plan that combines a defined benefit with a defined contribution plan which depends on employee contributions. More than 85,000 active workers are now part of the hybrid plan, but only 18 percent of those are socking away the maximum 4 percent of their pay, which is matched with another 2.5 percent by the state.

Of the rest, 42 percent are contributing nothing, and 36 percent are contributing  only one-half of one percent, or $50 per $10,000.  Most of those are apparently doing so because the state automatically escalated all contribution rates by one-half of one percent on January 1, 2017 and employees had to then intentionally opt out.

The information was part of the annual report on VRS to the Joint Legislative Audit and Review Commission Monday, covering all aspects of an operation vital to 700,000 participants or beneficiaries.  JLARC was presented with a brief oversight, a longer and more detailed overview, and the report of an outside actuary.

Since that first “automatic escalation” the participation has been dropping and it may continue to drop until a second auto-escalation is planned for 2020.  “Current low rates of voluntary contribution by hybrid plan members will result in lower retirement income,” the presentation slide states.   That’s a major understatement, but the hybrid plan and the low participation are saving the taxpayers a bundle in the short run and will save even more as the previous defined benefits plans fade away.

As of March 1, the overall year to date return was 9.9 percent, slightly behind the goal of 10.0.  No figure was given for the end of the fiscal year on June 30 and the last 90 days have been a trade fear-induced roller coaster.  The long-term return baked into VRS funding assumptions is 7 percent.  The five-year average has been 8.1 percent and the 25-year average 8.2, but as the saying goes, past results are not a guarantee.

The charts tracking the funding status of the various individual retirement plans were all inching up and the average overall is now about 77 percent.  Under current assumptions it will take 26 more years to get back to 100 percent funded, where the state was as recently as 2002.  The key phrase there is “current assumptions.”

“VRS is actuarially sound” concluded Lance Weiss of Gabriel, Roeder, Smith and Co. (GRS), the outside auditor.  He praised Virginia for setting that 7 percent target return a few years back, but then reported it is no longer a conservative assumption but merely a reasonable one.  Many of their clients are moving to 6.75 percent, he said.  A figure below 6.5 percent was hinted at.  With an aging workforce looking at starting benefits in the short term, there is even more reason for Virginia to rethink that 7 percent assumption on return.

The assumption on return is what drives the size of employer contributions.  In another report it was noted that if the two largest funds, those for teachers and for general state employees, moved to a 6.75 percent “discount rate” the state would need to increase its annual contribution by $182 million.  Changing that assumption also drives up the unfunded liability on both funds and pushes the 100 percent funded goal further out.

The reports today were merely accepted, with few hard (or easy) questions. It may take a longer period of market uneasiness to undermine the current return assumptions, but House Appropriations Chairman S. Chris Jones told reporters after the meeting he would consider it.

Senate Finance Co-Chair Thomas Norment did ask out loud if the hybrid plan was “worth keeping” but the question received no response.  The defined benefit plan is gone and unless participation patterns change future VRS retirees (86 percent of whom remain in Virginia) will not have the same comfortable income as current retirees.

“All Matters” Makes Lobbyist Reports Worthless

“Matters Related” phrase used to avoid specifics is blessed by Virginia Ethics Council example.

“With as much specificity as possible.”

That is the instruction given to Virginia registered lobbyists about how they should list the various “executive and legislative actions and procurement transactions” they seek to influence on behalf of their principals.   The instruction to be as specific as possible is routinely ignored and never enforced.

Most of the hundreds of annual lobbyists disclosure forms filed on behalf of corporations, unions, associations, and government entities reveal nothing about which bills, resolutions, budget items or appointments they sought to influence.  Most simply report working on “all matters related to” or “matters of interest to” that company or association or entity.  One Chamber of Commerce lobbyist replied simply: “business issues.”

It is hard to blame the lobbyists for being vague.  In the illustration above, which is from the official example provided on a state website for those filling out the form, the stock phrase “all matters related to….” is shown to be acceptable.

July 1 was the annual deadline for lobbyist filings and if you know how to maneuver on the database you can find them here.  Set the date range for 2017-2018 and then enter a name for the lobbyist or their principal, which can be a client or an employer.  Look for the disclosure reports.  There are still some reports missing but most are up.  (The data will also eventually be picked up on the Virginia Public Access Project lobbyist listings.)

A Glimpse Inside the Process

There are many filings which do list specific bill numbers where the principal’s views were communicated and some even go so far as to list specific budget items by number.  But even in those cases it is not possible to determine if lobbyist expressed support, opposition or sought to amend the bill.  In some cases lobbyists suggested, requested or actually provided the text of a bill or amendment – an important specific detail never reported.

So many of the reports fail to list bill numbers or other details that there is no point in singling out anyone for doing so.  Some of the largest and busiest law firm lobby shops routinely use the “all matters” or “matters related” phrase or something similarly amorphous.

An earlier post described the way some lobbyists evade reporting the names of officials and their families on their entertainment expenses by splitting the cost between more than one client to stay below the $50 reporting trigger.

This failure to require actual details on which bills, appointments or budget decisions are being influenced – ignoring what appears to be a clear instruction – is another weak spot in Virginia’s oversight.  Absent that information the reports are worthless.

Other sections of the reports deal with spending on communication efforts, with advertising, social media and direct mail becoming increasingly common in legislative battles.  How much out-of-town lobbyists spent on hotels for themselves, or whether they rented a locker or subscribed to the bill tracking service, are details which are included.  They are also details which do not matter.

The required information on compensation is also meaningless because most lobbyists pro-rate the amount based on the narrow percentage of their time spent in direct contact with legislators or other officials.   Again, the reports are worthless.

How much information about what bills drew the attention and effort of the lobbyists could be the subject of debate.  The lobbyists’ natural inclination would be to share nothing.  Open government advocates would want to know everything.  Right now “nothing” is winning.

Many of these lobbyists are working for state agencies or for local governing boards, school boards or authorities.  They are spending taxpayer dollars seeking to influence tax and spending decisions or changes to their client’s authority – undisclosed government-to-government lobbying on our dime.

The private company or association lobbyists use private dollars, but are often fighting proposed regulations or seeking for the law to give them an advantage over customers or competitors.  Many of them are seeking tax changes or spending items in the budget that will provide a benefit to them or their stockholders.

One of the most important discussions during 2018 has been about filling an open seat on the State Corporation Commission, still unresolved.  The SCC is the crucial regulator for multiple businesses in Virginia.  You may look in vain for a lobbyist who discloses talking to legislators about any candidate for that job.  Does that mean no lobbyist has weighed in?  Unlikely.

Any competent lobbyist can sit down at the end of the session and list the bills or issues worked in the previous weeks, and some record the specific meetings or communications. (Not all are competent, but that’s another issue.)  They know what they did, and in most cases their employers or clients have received regular reports, with full specificity.  Requiring a list of bills and issues that were worked on the report would not be onerous.

Tennessee License Suspension For Unpaid Debts Ruled Unconstitutionally Unfair to Indigent

Image credit: novacriminalattorney.com.

A federal judge in the Middle District of Tennessee has ruled that Tennessee’s practice of suspending a driving license to compel the collection of delinquent court debts is unconstitutionally unfair to poor people.  She has ordered Tennessee to stop and to start restoring the licenses of people who simply could not pay, but an appeal is likely.

Similar cases are pending elsewhere including one in Virginia which was dismissed but is going back on remand. More than 40 states use the method in some form.  I have not yet been able to find the judge’s written opinion on line, but back in March she issued a memorandum laying out her likely reasoning for a summary judgement in favor of the debtors.

“The fact that it is difficult to collect debts from very poor debtors is a reality faced by people and entities, both public and private, in a wide array of circumstances; indeed, it is a problem as old, presumably, as debt itself,” she wrote.

Also: “Tennessee’s system has the actual effect of imposing a harsher punishment on indigent defendants than on non-indigent defendants based solely on their economic circumstances. A non-indigent defendant has a choice: pay or lose his license. Drivers like (plaintiffs) Thomas and Hixson, they argue, have no such choice. The plaintiffs challenge this differential treatment as unconstitutional pursuant to 42 U.S.C. § 1983.”

The plaintiffs also argued that license suspension is not an option for the collection of private debts, only court debts, 1s further evidence it was not fair.

My introduction to this issue came as the lobbyist for several Virginia law firms doing collection work for various local courts. About five years ago, in budget language that simply appeared in a final state budget document, an additional 17% fee was tacked on to all accounts sent out for collection. The attorney who initially contacted me wanted to know where that anonymous proposal came from, in part because he knew it made it harder for debtors to pay up.

In response to the pending Virginia case, the Virginia Supreme Court directed local courts to allow payment plans that took the defendant’s ability to pay into account. It is not clear whether that was the case in Tennessee or if that is a solution it may propose. It is also not clear yet if that has allowed more Virginians to get their licenses back. It is estimated that one in six Virginians have lost their license over unpaid fines and fees (which do not have to be driving-related at all).

The harsh reality is that state and local governments love this revenue. More than $470 million in fines and fees were assessed in Virginia’s courts in 2017, and more than $200 million were judged delinquent. As high as the basic fines have become, the processing fees and interest magnify the problem in delinquent cases. An annual state report tracks the collection of delinquent fines by the clerks, local commonwealth’s attorneys, local treasurers and a small group of private collectors. It does not appear that collections dropped off in 2017 because of the payment plans.

The even harsher reality is the opponents of this system are right that it ultimately is counterproductive to expect somebody who cannot afford to pay to dig themselves out of debt without basic transportation, which for most means a car. The end of this approach may be in sight, although the judge in her initial memorandum didn’t believe the system was unfair in the case of people who did have the ability to pay. Who decides what, and who is poor enough to be protected from that collection method? It will probably just go away.