Monthly Archives: June 2008

Virginia’s economy and housing sector will remain sluggish for the rest of 2008 but the state’s economic performance should pick up in 2009, forecasts Chmura Economics & Analytics in a study commissioned by the Thomas Jefferson Institute for Public Policy.

While the state economy will slow, Virginia should skate past a recession, the report concludes. “Employment growth is expected to slow to 0.5 percent in 2008 before accelerating to 2.9 percent in 2009,” says the study. “Wages and salaries will slow to 3.9 percent amid the business cycle downturn in 2008 before accelerating to 5.0 percent in 2009.”

But there will be continued pockets of weakness. Retail spending may lag the recovery. Furthermore, building permits could slide another 10.4 percent in 2009 after taking a 19.4 percent tumble this year.

Here is the breakdown by MSA for 2008 and 2009 combined:

Blacksburg
Employment: 0.1 %
Wages/salaries: 7.1%

Bristol
Employment: 0.1%
Wages/salaries: 3.9%

Charlottesville
Employment: 4.0%
Wages/salaries: 11.9%

Danville
Employment: -1.0%
Wages/salaries: 3.0%

Hampton Roads
Employment: 1.3 %
Wages/salaries: 10.3%

Harrisonburg
Employment: 3.2%
Wages/salaries: 6.0%

Northern Virginia
Employment: 2.2%
Wages/salaries: 9.1%

Richmond
Employment: 1.2%
Wages/salaries: 8.5%

Roanoke
Employment: 0.4%
Wages/salaries: 5.5%

Winchester
Employment: 3.5%
Wages/salaries: 10.7%

Non-MSAs
Employment: -1.2%
Wages/salaries: 11.3%

Appendix: TooManyTaxes has asked me to make available a chart entitled, “Virginia Counties and Cities Reducing Their Local Contribution to Public Education in FY 2006,” by Chris Braunlich, as supplementary evidence for a thread of comments about this post.

Last year HB 3202 made the Hampton Roads Transit Authority (HRTA) a political sub-division of the Commonwealth. The Virginia Supreme Court ruled unanimously that this new Regional Government was un-constitutional. This year some Republicans want to make the Hampton Roads Metropolitan Planning Organization the new Regional Government.

HB 6055 provides a shell fund and the “Moneys in the Fund shall be used solely for new transportation construction projects in the Counties of Isle of Wight, James City, and York and the Cities of Chesapeake, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, and Williamsburg, as required by law; and then as determined by the Hampton Roads Metropolitan Planning Organization.” Some counties along the route of the 460 corridor are MISSING).

Let’s pretend that taxation without representation is no problem, so an HRTA or MPO Regional Government is the solution for transportation. Since almost all the same politicians and bureaucrats are appointed to the HR MPO, HRPDC and HRTA, it’s safe to assume that the planning for the big day to rule has been working since their first failed ballot initiative in 1998.

In the first year of operation (this year), the HRTA was supposed to get about $120 million in new and higher local taxes. Let’s see the Master Plan in a detailed schedule of what was to be done from Day One. Put it up on the web. Show The People the coordinating document – called a ‘horse blanket’ for Army projects. Put it up on the web.

Oh, the HRTA/MPO doesn’t have those details? Okay. How about the plan for just the first year? That would mean now – if they hadn’t been ruled un-Constitutional. Put that plan up on the web.

Let’s see the systems engineering ‘waterfall’ project schedule. Where is the complex work breakdown schedule?

What jobs are created? How much do they pay? What are the job specifications? What is the process to get hired? When is each job to be filled? Surely all of this is planned for the first year. Let’s see it up on the web.

Same for contracts. What contracts, for how much, to do what, when, with what consultants for the first year?

None of this above is a state secret. It’s a good show and tell for the good governance stewardship of public money. It’s establishing the public trust that the Regional Government isn’t the scam for power and money for local pols that it smells like.

I’ve worked on government contracts for almost 20 years. Whether the project is in the $10s of thousands or billions of dollars, contractors do a show and tell to account for every hour of labor and penny spent. Why do we expect less from a Regional Government spending even more money? (2002 estimate was $18b, but it is more like $30-35b with the HRBT and inflation).

Why is it okay for the politicians on the Regional Government to just make it all up as they go along? The challenge of building transportation projects is engineering and management – not representation or politicking.

The HRTA/MPO should show The People how much executive, management and engineering skill they possess – now. They’ve been planning since 1997. Put it up on the web.

Show us how many trucks a day will go from the Port of Virginia to I-64 in the middle of Hampton.

Show us how the MPO doesn’t cover the full 460 corridor to connect with I-95.

Show us the estimate, again, on how many MORE miles of congestion we have with all your projects.

Show us your plan for the HRBT (the biggest congestion problem) – since you never had one before – and where it is in the priority to build.

Some Republicans in the General Assembly are betting the future of their Party on your readiness for good governance. Show and tell now. Put it all up on the web.

Jim Bacon gave me dispensation for this longish post because it is one perspective on the Virginia political process today.

HB 6055 is the son of Frankenstein (HB 3202) that was ruled Un-Constitutional by the Virginia Supreme Court. The arrogance of trying to stuff this bill and its Regional Government down the throats of voters – again – reveals much of what is wrong in the elected caucus of the Republican Party of Virginia. The Regional Government scam reveals the rot of political corruption like a surgeon cutting away the sores to show the cancer.

Here is the Republican con in the special Transportation Session. HB 32o2 is back like the son of Frankenstein, or any other horror film remake unto ridiculousness, as the Republican transportation ‘answer’. But like the original HB 3202 it is just a con game for the Commonwealth. It is more about political corruption of politicians and the corruption of the political process for good governance – two separate but connected issues, than transportation.

Much to my dismay, Del. Phil Hamilton, R-Newport News, who knows much about medicine and government policy, is the co-author from The Peninsula.

Here is a Hampton Roads/Tidewater perspective on the bad bill before the House.

The General Assembly declares it to be in the public interest that the economic development needs and economic growth potential of Hampton Roads and Northern Virginia be addressed by special transportation revenues to provide for the costs of providing an adequate, modern, safe, and efficient transportation network in Hampton Roads and Northern Virginia and hereby enacts the following legislation to provide for the same.

First fallacy: existing revenues – raising taxes – are needed.

The newest Regional Government for Hampton Roads isn’t the HRTA, but the MPO. Google and check out to see how many of the same people are in the MPO/HRPDC/HRTA. The MPO is an appointed body – not elected.

§ 33.1-391.17. Hampton Roads Transportation Revenue Fund established.

There is hereby created in the state treasury a special nonreverting fund to be known as the Hampton Roads Transportation Revenue Fund, hereafter referred to as “the Fund.” The Fund shall be established on the books of the Comptroller. The Fund shall consist of fees and taxes imposed pursuant to §§ 46.2-755.1, 46.2-1167.1, and 58.1-2402.1 in the Counties of Isle of Wight, James City, and York and the Cities of Chesapeake, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, and Williamsburg, and any other funds that may be deposited into the Fund. Interest earned on moneys in the Fund shall remain in the Fund and be credited to it. Any moneys remaining in the Fund, including interest thereon, at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund. Moneys in the Fund shall be used solely for new transportation construction projects in the Counties of Isle of Wight, James City, and York and the Cities of Chesapeake, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, and Williamsburg, as required by law; and then as determined by the Hampton Roads Metropolitan Planning Organization.

Our MPO has been cited for violating Federal Law in its functioning. It is one of the worst performing MPOs in the Nation.

Some money will come from the Port.

(Editor’s note: Follow this link to the full text of Jim Bowden’s post. The original post was so long that it visually disrupted the display of previous posts. Readers are invited to comment on the legislation or Jim’s commentary by clicking on the “comments” link immediately below.)

Here’s a quote that summarizes the futility of the proceedings in the General Assembly yesterday, in which the major accomplishment was the state Senate’s passage of a gas tax that Gov. Timothy M. Kaine never asked for and the House of Delegates will never vote for.

From the Washington Post:

“There is no consensus in the General Assembly of Virginia between any group on how to approach transportation,” Senate Minority Leader Thomas K. Norment Jr. (R-James City) said on his chamber’s floor. “I am not afraid of tax increases, but this is not the time and this is not the place and everyone in this room knows it is not going to happen.”

Here’s the latest salvo from the General Assembly battlefield: Senate Democrats this afternoon killed a measure that would ensure that funds raised by regional levies would be spent exclusively in the regions that paid the taxes.

According to an email missive from the Virginia Senate Republican Caucus, Sen. Creigh Deeds, D-Bath, led Democrats on the Privileges and Elections Committee to defeat the measure proposed by Senator Ken Stolle, R-Virginia Beach. It failed by a single vote, despite unanimous Republican support.

Stolle’s measure would have initiated the process of adopting a constitutional amendment that would establish a “lock box” for regional transportation funds. Without a constitutional guarantee, future legislatures could divert the funds for any other purpose. Said Stolle: “Without this constitutional protection, taxpayers have no assurance that the measures we pass will do what we say they will do. This vote today does a great disservice to those who want to find solutions to our transportation challenges.”

I have to agree. I’m sure the Dems offered some fig leaf of a reason for blocking the measure, desperately needed to retain trust, and I’ll report it when I come across it. Until then, I find this action unfathomable.

Update: OK, here’s the story (as I understand it). Deeds blocked the Republican version of the lockbox measure in order to submit a substitute bill. That bill added some clarifying language regarding regional authorities but otherwise preserved the intent of the original. States Peter Jackson, with the Deeds campaign: “I think it’s worth noting that the same day Stolle expressed such outrage at Senator Deeds in that missive from the Senate GOP, he voted to advance the McEachin/Norment bill to the floor.”

If that’s the case, I have to ask, what was the purpose of the email salvo?

Speaking of Deeds, he’s offered a couple of interesting bills: one an income tax credit to employers whose employees enter into flextime scheduling agreements that allow them to avoid rush hour commutes, and a tax credit for employers to conduct a telecommuting assessment. Encouraging flextime and telecommuting are good things. But there must be another way to spread those practices. The state tax code is riddled with too many tax credits already.

The following was submitted by Ron Utt of the Heritage Foundation and the Virginia Institute for Public Policy:

As the state legislature convenes in Richmond this June in a special session to revise Virginia’s recently enacted surface transportation program, a number of elected officials – ranging from the legislature’s Republican caucus to the Attorney General – have recommended that the state conduct an independent, comprehensive performance audit of the state’s transportation operation to determine areas of deficiency, improve program management, set clear goals and measures of accountability, and develop a plan to reduce traffic congestion. Such a performance audit was completed in Washington state in 2007, and the Idaho legislature is contracting with private consulting firms to conduct a similar audit in 2008.

Among the many findings from Washington’s independent performance audit were problems related to the large number of overlapping government bodies that had some responsibility – and some portion of the resources — for some facet of the state’s (or region’s) transportation policy. This balkanized system of responsibility, in turn, made it difficult to devote the combined resources of government to solving transportation problems, coordinate responses, or – most importantly — to hold any of these many public entities accountable for successes and failures.

In the event that Virginia agrees to conduct its own independent performance audit of the state’s transportation system, the auditors will quickly discover a mother lode of more than a dozen overlapping, costly, and redundant government transportation bureaucracies spending vast sums of taxpayer money in pursuit of contradictory – and often counterproductive — transportation policies and projects. Indeed, Northern Virginia may very well have the most confusing and redundant collection of transportation bureaucracies in the Nation.

A good place to start is with the Metropolitan Washington Council of Governments and the region’s metropolitan planning organization – the National Capital Regional Transportation Planning Board (TPB). Members of the Board (and overseers) include five northern Virginia counties and five incorporated cities, as well as the District of Columbia, three Maryland Counties, and six Maryland pseudo-cities. In addition to these two region-wide bureaucracies, each of the five Virgina counties and five cities may embark upon some of their own transportation policies and initiatives.

Serving as ex-officio member on the TPB are three Federal agencies — the National Park Service, the Federal Transit Administration, and the Federal Highway Administration – and also the Metropolitan Washington Airports Authority (MWAA). Although MWAA has no experience in surface transportation issues, it recently became a major player in NoVA transportation policy when it assumed responsibility for building the Dulles Rail project.

Recently added to this mix is the state government created and empowered (and then Supreme Court disempowered) Northern Virginia Transportation Authority (NVTA), whose member jurisdictions are the same as those Virginia entities serving on the TPB. This new transit-oriented focus will be supplemented by the ongoing work of three other Virginia government entities with some responsibility for transit: the Northern Virginia Transportation Commission, the Potomac and Rappahannock Transportation Commission and the Virginia Department of Rail and Public Transportation. The first two are responsible for operating and funding the Virginia Railway Express (VRE).

I know that this is getting confusing, but, unfortunately, there are still a few more costly bureaucracies floundering around the state and the region, and operating their own competing transportation fiefdoms. Among them is one of the biggest, the Washington Metropolitan Area Transit Authority (WMATA), which operates the Metro and the companion bus system. In the original H 3202, spending priority on taxes raised is to satisfy any debt service obligations incurred by the new NVTA, while each year the VRE and WMATA would have had first claim on the next $75 million raised through H 3202’s unconstitutional tax scheme. Added to this steaming bureaucratic brew is the Northern Virginia Regional Commission, and the biggest player of all – the Virginia Department of Transportation (VDOT).

Maybe this regional broth of bureaucrats makes sense, but I doubt it, and a perfect project for the state’s Joint Legislative Audit and Review Committee (JLARC) and/0r the Auditor of Public Accounts (APA) would be to conduct a comprehensive financial audit to identify what it is that each of these taxpayer funded entities does, determine how much in administrative costs is required to keep them in operation, and provide an inventory of all personnel, as well as their salary and benefit packages. Such information would be a valuable supplement and assist to the independent performance audit that Virginia should conduct, and would also serve to inform taxpayers of the service tradeoffs incurred by big bureaucracies. For example, if the average Virginia pot hole costs $200 to fix, and if the average bureaucrat in any of the above named entities earns $80,000 per annum, then the public cost of each redundant bureaucrat represents 400 unfilled pot holes on Virginia roads. Think about it.

(Cross-posted at Tertium Quids)

There’s a very interesting story lurking within Len Gilroy’s column, “Another One Bites the Dust.” Gilroy tackles the idea that privately financed public-private partnerships are a bad deal for motorists because the private sector can’t avail itself of tax-free bond financing like state and municipal governments can.

In the last few weeks, the Pennsylvania Turnpike Commission issued $177 million in tax-exempt bonds at a 4.89 percent interest rate. Transurban, the major investor in the Interstate 495 HOT lane project, went to financial close earlier this month on $589 million of 40-year, tax-exempt bonds with an average interest of 4.97 percent, and $587 million in TIFIA loans at 4.45 percent for 40 years.

Bottom line: Transurban has a lower cost of capital than the Pennsylvania Turnpike Commission.

How did Transurban get such low financing? Writes Gilroy: “Because private investor-operators can tap into both federal tax-exempt financing vehicles and robust global capital markets, they can structure sophisticated financial arrangements at highly competitive rates that can neutralize the public financing’s supposed advantages.”