Finally, an Anti-Poverty Program that Actually Might Reduce Poverty

by James A. Bacon

Most anti-poverty programs are double-edged swords. They alleviate the symptoms of poverty — insufficient money for housing, food, health care — but do nothing to induce poor people to change their behavior and improve their condition. But this program is different: With funding from the the Cities for Financial Empowerment Fund (CFE), the City of Richmond will start providing free, professional, one-on-one financial counseling as a public service to residents.

“Financial empowerment is necessary to build an equitable economic environment,” said Mayor Levar Stoney in a press release. “This opportunity for one-on-one counseling will give residents the power to make informed financial choices with confidence.”

Bacon’s  translation: Rather than treating poor people as passive victims, the financial counseling program will explain how they can take control over their financial destinies by taking modest, achievable steps. The program teaches, dare I say it, personal responsibility. Continue reading

Hey, Governor, How About the Rest of Us?

by James A. Bacon

Having expanded Medicaid coverage for more than 325,000 Virginians, Governor Ralph Northam now has issued an executive order directing actions to increase the number of Virginians enrolled in “quality, affordable health care coverage.” Secretary of Health and Human Resources Daniel Carey will explore ways to expand Medicaid enrollment, reduce insurance premiums, increase transparency of insurance choices, and develop a “data-driven strategy to create efficiencies in coverage and improve outcomes” with a special focus on “vulnerable” populations.

We won’t know what these initiatives will cost the non-vulnerable (the vast majority of Virginians) until we see the proposals. But as Carey undertakes his inquiries, he and the Governor would be well advised to remember how much health care in the form of Medicaid is already costing the state.

State General Fund spending on Medicaid services has increased from $2.29 billion in Fiscal 2010 to $4.88 billion in Fiscal 2019, according to a recent update on state spending by the Joint Legislative Audit and Review Commission. That was an annual growth rate of 9% yearly, and it accounted for 39% of the growth of all General Fund spending, crowding out other priorities.

Meanwhile, the Kaiser Family Foundation has found that the average cost of employer-provided family health care coverage now exceeds $20,000 a year, with workers paying slightly more than $6,000. That’s a 5% increase from last year — and it doesn’t take into account steadily rising deductibles and co-pays. Middle-class Virginia households are caught in a triple whammy — supporting ever-inflating Medicaid costs, paying more for their own insurance, and paying more out-of-pocket. Continue reading

Demolishing Oxfam’s Laughable Ranking

by Chris Saxman

Some things just have to be challenged at the outset before they gain traction and become an untrue reality.

Gaining traction among too many candidates for the General Assembly is a ranking, released by a British organization, Oxfam, that graded American states and the District of Columbia on best states for workers. This is the second year of their ranking. Here’s what their release stated:

In 2018, workers are not sharing in the bounty of our thriving economy—and the federal government is not going to make changes that matter. However, some states are taking steps to keep working families out of poverty, and to give them a decent chance. How does your state rank?

According to Oxfam’s rankings, Virginia ranks LAST out of the 50 states and DC.

A ranking of #51 out of 51, we believe, is worth challenging.

How are these rankings compiled? And what is Oxfam anyway? (Click the above link,) Continue reading

Bye, Bye, Smokey Stacks

By Peter Galuszka

Many years ago, when I was a young cub reporter at The Virginian-Pilot, I had a lonely assignment that had me spending some of my mornings watching big ships come and go into Chesapeake Bay.

I worked a night police beat until at least midnight with Wednesdays and Thursdays off, ruining my social life. I saw on occasion many horrible things. For therapy, if I got up early enough and the weather was good, I might go to Fort Story, a military base in Virginia Beach, where I could sit on a bluff at Cape Henry and watch ships come and go. They were easy to see if it wasn’t windy since they emitted tall plumes of pale yellow and dirty brown smoke visible from miles away.

That smoke came from burning cheap, low grade, viscous bunker oil. It was like this for years until recently when the International Maritime Organization (IMO) of the United Nations issued strict new rules to cut sulfur oxides that pollute the air globally and could cause acid rain not to mention some carbon pollution.

Burning such oil had become a bigger problem since container or bulk carrying ships have gotten much bigger, especially as trade with strong economies such as China’s has greatly expanded.

On Jan. 1, ships around the world must use fuel with only 0.5% sulfur, rather than the 3.5% sulfur level that had been using. The levels will be measured by maritime enforcement agencies such as the Coast Guard and shippers who fail to comply will face stiff fines. Continue reading

How Should We Tax Electric Vehicles?

by James A. Bacon

Electric vehicles (EVs) are commonly touted as a necessary part of America’s green energy future: Shifting from cars powered by gasoline-combustion to cars powered by 100% clean electricity will cut CO2 emissions (and other pollutants) implicated in global warming. Virginia ranks among the states with the lowest EV market share. But on the assumption that EVs eventually will become part of Virginia’s energy future, there’s no time like the present to start thinking about what EV taxation should look like.

Perhaps the most pressing issue is whether to tax EVs the same as conventional cars for the purpose of raising money to pay for the construction and maintenance of roads, highways and bridges. EVs contribute to traffic congestion and cause traffic accidents like any other kind of car. Should their owners not share in the cost of building, maintaining and operating roads?

The rise of EVs, hybrids and high miles-per-gallons vehicles was part of the justification when Virginia overhauled its transportation tax structure during the McDonnell administration. Revenues from the gasoline tax were stagnating, and legislators saw a need to diversify the source of transportation revenues. Once the tax increases were enacted, however, cogitation about the tax structure largely ceased.

Virginia cannot ignore the problem forever. One good place to start thinking about the issue of EVs and road maintenance is a new paper by two University of California professors, Lucas W. Davis and James M. Sallee, “Should Electric Vehicle Drivers Pay a Mileage Tax?” The paper explores the many trade-offs involved. Continue reading

Is Inclusionary Zoning the Answer to the Housing Crisis?

Source: “Inclusionary Zoning and Housing Market Outcomes.” 

by James A. Bacon

I have often advanced a common-sense proposition: If you want to create more affordable housing, increase the supply of housing. If the housing stock increases faster than demand, the price declines. A new study on “inclusive housing” policies in the Washington-Baltimore metropolitan area, which includes Northern Virginia, gives some support to that proposition, although it suggests that in highly regulated housing markets, the relationship between supply, demand and price is not straightforward.

Emily Hamilton, a research fellow at George Mason University’s Mercatus Center, has undertaken an in-depth study of inclusionary zoning in the Washington-Baltimore metro. Inclusionary zoning (IZ) is a policy in which local governments require or incentivize real estate developers to provide below-market-rate houses in new housing developments.

Economic theory (which has informed my thinking on this blog) predicts that IZ could be counter-productive. By increasing the cost of building new units, the policy diminishes the supply of new housing, which has the effect of pushing housing prices higher overall. But IZ programs vary widely in design and impacts vary, says Hamilton in her paper, “Inclusionary Zoning and Housing Market Outcomes.” Continue reading

Our Little Five Billion

UVa President James Ryan

by James A. Bacon

University fund-raisers are like presidential elections — as soon as one campaign ends, another one starts. Here in the Old Dominion, the University of Virginia is in the midst of a $5 billion boodle-building campaign. Meanwhile, Virginia Tech is raising $1.5 billion, the College of William & Mary $1 billion, Virginia Commonwealth University $750 million, and George Mason University $500 million. That’s pretty serious dough. For purposes of comparison: Harvard, the wealthiest institution of higher education in the country (and probably the world), raised $9.6 billion in its last five-year campaign.

It never ceases to fascinate me how higher ed, which obsesses over issues of racial and socio-economic equity, has become such an engine of elitism. Donors get tax write-offs for their contributions, and public university endowments pay no taxes on income. (The 2017 federal tax law imposes a 1.4% excise tax on private-institution endowments worth $500,000 or more per student.) Here in Virginia, public university endowments also are exempt from the Freedom of Information Act. Sweet deal — tax breaks out the  wazoo, and freedom from public scrutiny! All to benefit whom? Faculty, administrators and, disproportionately, the children of the well-to-do.

Not surprisingly, university administrators cast their pitches for mo’ money as benefiting students and the public — more financial aid, more enriching education, more research, and, of course, as UVa President James E. Ryan, puts it, a “fearless search for truth.”

You can’t spend $5 billion without doing some good for somebody. But it bothers me that almost no one ever pushes back. No one ever questions the fund-raising goals. No one asks if the money could be spent to better effect elsewhere. There are rare exceptions — listen to Malcolm Gladwell’s podcast, “My Little Hundred Million.” But you never hear such voices in Virginia. Continue reading

Bacon Bits: Monday Morning Kick-Starter

No limits to human ingenuity, er, depravity. The developers of flying drones promised all manner of wonderful things, from saving lives to home deliveries. I doubt any of them considered the latest use for drones highlighted in the news: sneaking drugs into prison. In August, security staff of the Buckingham Correctional Center found a small white drone by the side of the road stuffed with $500 worth of marijuana, an eight ball of cocaine, a cell phone, three SIM cards and a handcuff key. That was only one of 33 drone sightings near prisons since January 2018, reports The Daily Press. Never forget Bacon’s Rule of Technology: for every beneficial use of a new technology conceived by the inventer, bad guys can think of a malevolent use.

$100 Million Gift for UVa Scholarships. David Walentas, a University of Virginia undergraduate and business school alumnus and New York real estate developer, is giving $75 million to the university in support of a $100 million Jefferson Scholars Foundation initiative to provide financial support to first-generation students from Virginia and New York. The gift will serve as “a cornerstone” for a larger $5 billion university fund-raising campaign, the university says. Walentas is to be admired for his generosity and for using his money to address the manifest injustice of the rising cost of attendance at UVa. Question: Does Walentas’ benefaction take pressure off the General Assembly to maintain financial support of the university and off the UVa administration to rein in runaway spending?

Oops, Virginia did it again. Ivy Main, an energy/environment blogger for the Virginia Sierra Club, is distressed by the latest electricity usage for Virginia, which showed a 2% increase last year, continuing a three-year upward trend and (something she doesn’t mention) confirming Dominion Energy’s forecast of continuing electricity demand growth for the state despite assurances from many quarters that electricity consumption would decline. Writing in the Virginia Mercury, she attributes growing electricity consumption to the proliferation of energy-intensive data centers and a failure to invest in energy efficiency. Continue reading

Bacon Bits: Weekend Catch-up

Wait… what? Cut Richmond schools some slack? John Butcher, author of Cranky’s Blog, normally doesn’t have much sympathy for the City of Richmond public school system. But he notes in a recent post that the Virginia Department of Education (VDOE) methodology for assessing schools is stacked against those with a higher percentage of economically disadvantaged kids. Comparing majority-white Mary Munford and William Fox elementary schools with majority-black Barack Obama and John B. Cary elementary schools, he notes that affluent Munford and Fox have significantly higher SOL pass rates. But economically disadvantaged kids at Obama and Cary out-perform economically disadvantaged kids at Munford and Fox. The Board of Education abandoned a system, the SGP, that was uncorrelated with economic status. Says he: “We are left with a reporting system that punishes schools and divisions that serve larger populations of poor students. If that is fair, I am Santa Claus.”

I wish Mike Thompson were still around to see this. Back in April, in one of his last publications, Mike Thompson, then-president of the Thomas Jefferson Institute for Public Policy, issued a study concluding that hiking the tax on cigarettes rarely yielded the revenues predicted by static analysis. Now comes this story from the Richmond Free-Press: “Profits up in smoke as city merchants report hefty sales slumps since start of city cigarette taxes.” Richmond Mayor Levar Stoney expected a 50-cent-per-pack increase in cigarette taxes to yield $3.5 million in added revenue. The first month, July, collected a nifty $770,000 in taxes. After smokers got wind of the new tax, however, August collections declined 60% to $307,000. Owners are driving past Richmond convenience stores to buy cigarettes in Chesterfield County. No report on how much Richmond stores are losing in non-cigarette sales as a result. Somewhere up in heaven, Mike is smiling.

Who are you calling “inequitable,” dude? On the issue of “inequitable” school funding, I argued recently that high-poverty  rural/small town localities in Virginia were taxing less than their fiscal capacity would enable them to, while more affluent school districts were taxing more, although differences in the Cost of Living between Northern Virginia localities and Rest of Virginia localities made statewide school-spending comparisons tricky. Jim Weigand, of Lynchburg, drove home the point with the following numbers: Continue reading

Reliability, Resilience and a 100% Renewable Electric Grid

by James A. Bacon

California is getting a vivid lesson on the trade-offs between sustainability and reliability of the electric grid. Pacific Gas & Electric has taken the extraordinary action of cutting off electric power to 700,000 customers in California to reduce the risk of sparking forest fires. Many customers could go without power for as long as a week; the prolonged outages could cost customers billions of dollars in lost economic activity. Silicon Valley may have the most advanced technology in the world, but the Golden State increasingly resembles a Third World country. (Don’t get me started on the armies of homeless people.)

Virginians need to take notice. Virginia is not California, and Dominion and Appalachian Power Co. are not PG&E. … not now. What is happening in California will not be replicated here. But in our determination to build a “sustainable” zero-carbon grid, other equally horrendous scenarios are possible if we fail to pay sufficient attention to electric reliability.

PG&E filed for bankruptcy this year after being held liable for billions in damages and the loss of lives caused by wildfires ignited by poorly maintained electric lines. As a Wall Street Journal editorial summarizes the train of events:

Continue reading

Dominion Vies to Become Sustainability Leader — at What Cost?

by James A. Bacon

Dominion Energy is aggressively positioning itself as a leader among U.S. electric utilities in renewable energy and environmental stewardship. Whether the shift in strategic direction will win it any friends among Democrats and environmentalists who increasingly dominate Virginia politics is an open question. The environmental wing of the Democratic Party of Virginia continues to move the goal posts, now embracing the goal of a zero-carbon (and likely a zero-nuclear) electric grid for Virginia by 2050, a vision that is irreconcilable with Dominion’s commitment to nuclear and natural gas for the foreseeable future.

Regardless, like most other electric utilities, Dominion sees the direction the country is heading and is running to catch up. The company has detailed its move toward a renewable energy future in its just-issued Sustainability & Corporate Responsibility Report.

“The people of Dominion Energy are leading the country’s transition to clean energy,” said CEO Thomas F. Farrell, II, in a statement accompany the release of the report. “We are transforming everything we do to build a more sustainable future for our customers, the planet and our company. … We intend to become one of the most sustainable companies in the United States.”

The report highlights the following: Continue reading

So Much Health Care Data, So Little Actionable Information

Palliative care grades by state. Source: released 2019 “State-by-State Report Card on Access to Palliative Care in our Nation’s Hospitals”

by James A. Bacon

There are many ways to gauge the quality and cost-effectiveness of Virginia’s hospitals. One is to measure cost and efficiency. Another is to track mortality rates and re-admissions. Yet another is to rate patient satisfaction. You can find these metrics on the Virginia Health Information website.

But health care is a phenomenally complex business, and many other aspects of hospital care are measurable. In a recent press release, the Virginia Hospital & Healthcare Association (VHHA) pointed out, for instance, that Virginia is one of 20 states (and Washington, D.C.) to earn an “A” for palliative care, based on a study by the Center to Advance Palliative Care and the National Palliative Care Research Center.

What is palliative care? It is, according to the report, “specialized medical care for people living with a serious illness. It is focused on providing relief from the symptoms and stress of the illness. The goal is to improve quality of life for both the patient and the family. Palliative care is based on the needs of the patient, not on the patient’s prognosis. It is appropriate at any age and at any stage in a serious illness.”

Having witnessed the lingering deaths of a step mother and father-in-law in recent years, I get it. The goal should not be to prolong life at any cost but to improve the quality of life that remains. Continue reading

“Equitable” Education Policies and Relaxed Standards

Source: Virginia Department of Education

by James A. Bacon

More than nine of ten students who entered the ninth grade in 2015 earned a diploma within four years, the Virginia Department of Education (VDOE) reported earlier this week. Of those more than half graduated with an advanced diploma.

That sounds like the Virginia educational system is doing its job — and maybe it is. But it never hurts to scrutinize the claims of high-level educators who, like any bureaucrat or politician, is motivated to put the best possible gloss on things.

Here’s how Superintendent of Public Instruction James Lane framed the graduation results in the VDOE press release: “Virginia’s on-time graduation rate has risen by more than 10 points in the decade since the department began reporting graduation rates that account for every student who enters the ninth grade. I believe this long-term, upward trend will continue as school divisions and the commonwealth adopt equitable policies and practices that provide instructional and support services tailored to the unique needs of every learner. (my emphasis).”

Let’s parse that last sentence. Lane didn’t attribute the upward trend of the past 10 years to “equitable policies and practices” — he said that equitable policies will help maintain progress in the future. Continue reading

Another Scheme to Address School Funding “Inequity”

Source: Urban Institute

by James A. Bacon

The Virginia Board of Education will convene next week to consider a proposal to create a $350 million “equity fund” to pay for additional teachers and targeted compensation, reports Radio IQ. Details of the proposal have not yet been posted on the board website, so we may have to wait until the board meeting to get specifics.

Radio IQ quotes Chris Duncombe at the Commonwealth Institute for Fiscal Analysis as saying that distributing money based on poverty would create more equity in the system. “Virginia actually right now is spending less per student in the school divisions with the highest child poverty rates when you’re looking at state and local funds compared to school divisions with the lowest child poverty rates or the greatest wealth.”

Kristen Blagg with the Urban Institute also says that the special needs of English language learners also need to be considered. “When we are thinking about equity and we are thinking about distributing funds equitably, student poverty is a very important and very large need. But so are the other needs that the students may have.”

What the heck is going on? The state’s funding formula already favors poor school districts! So does federal funding! If total per-student funding is unequal, it’s because the “poor” districts are not taxing within their capacity to pay. Continue reading

Two More More Book Reviews: This Time C-Ville

By Peter Galuszka

I was impressed with Dick’s thoughtful take on Margaret Edds’ book on early civil rights leaders that I thought I’d point readers to two reviews of books on the Unite the Right Movement that ran in this week’s Style Weekly: