Category Archives: Commentary

Altria rumored to be in talks to buy Canadian cannabis company Cronos Group

High in Henrico.  Henrico County based Altria, makers of Marlboro cigarettes among other products, is rumored to be interested in buying Canadian cannabis company Cronos Group.  Altria is refusing comment while Cronos said it “confirmed that it is engaged in discussions concerning a potential investment by Altria Group … in Cronos Group.”  Cronos went on to say that no agreement had been reached and there is no assurance that the discussions will lead to a deal.

Is that really a maple leaf on the flag?  Canada legalized possession of marijuana nationally effective October 17, 2018.  Under the national law provinces have some latitude regarding specific cannabis regulation.   In Quebec and Alberta, the legal age is 18; it’s 19 in the remainder of the country for example.  However, unlike the United States, there is no dichotomy between national and provincial (state) law.  There can be no doubt that this legal clarity is encouraging companies like Altria to consider entering the Canadian marijuana market while sitting on the sidelines of American states which have legalized grass.

Implications for Virginia.  Pot legislation and the business of selling pot is moving quickly in North America.  In November Michigan became the tenth US state to legalize possession of marijuana.  There is legislation pending for the 2019 General Assembly session to decriminalize marijuana in the Old Dominion.  Now an iconic and politically connected Virginia-based company apparently sees no moral or ethical issue with participating in Canada’s legal marijuana market.  Given that Altria’s board includes Virginia luminaries such as Thomas F Farrell, CEO of Dominion and John T Casteen, former President of UVA one wonders if Altria’s plans might lend respectability to marijuana reform in Virginia.

I smell refund.  In 2018 a bill to decriminalize possession of small amounts of marijuana (SB 111) was defeated along party lines in the Courts of Justice.  Nine Republican state senators voted against the bill.  Over the years all nine have received campaign contributions from Altria.  Given that these nine politicians see marijuana possession as a serious crime one would hope they will return these campaign contributions given that Altria is trying to engage in marijuana production, distribution and sale.  After all, is it moral to keep money contributed by a company engaging in practices you think should be illegal?  Here are the amounts (per VPAP):

Obenshain – $44,250
Norment – $128,433
McDougle – $58,000
Stuart – $8,500
Stanley – $9,500
Reeves – $28,265
Chafin – $1,500
Sturtevant – $8,000
Peake – $500

— Don Rippert

Marijuana arrests and racism in Virginia (especially Arlington County)

Reefer madness.  The upcoming debate in the Virginia General Assembly over decriminalizing possession of small amounts of marijuana may have racial overtones.  VCU Capital News Service studied the data for marijuana arrests in Virginia from 2010 through 2016.  African Americans were 3.2 times more likely to be arrested for marijuana crimes than whites.  At the same time separate research shows almost no difference in marijuana use between white and black Americans.  Across America it’s even worse.  Nationally, a black person is 3.73 times more likely to be arrested for a marijuana crime than a white person.

Location, location, location.  VCU Capital News Service breaks down the data by locality.  You can find the numbers here.  The only jurisdictions where the per capita arrest rate for whites is higher than blacks are those counties where the population is so low that a single arrest can make a statistical difference.  Highland County, for example, averaged 13 African American residents over the study’s time period and none of the 13 were arrested for marijuana crimes.  Two white people (out of about 2,200) were arrested for marijuana crimes in Highland County.  In all of Virginia’s populous localities the African American arrest rate was notably higher than the corresponding rate for white people.  In Hanover County for example, blacks were arrested at a frequency 6.3 times that of whites.

Libtopia.  Anybody who has ever been to Arlington County knows that safe spaces are mandated by the building codes, snowflakes can be seen in July and rainbow colored unicorns prance in the bike lanes.  It’s a progressive paradise.  So it probably comes as a surprise that African Americans were more than eight times more likely than whites to be arrested for marijuana crimes in Arlington from 2010 – 2016.  Arlington County’s Board has five Democrats, no Republicans and no independents.  The lone independent (John Vihstadt) was defeated in November.  How is it possible for the Lions of Libtopia to turn a blind eye to rampant racism occurring in their social justice warrior wonderland?

The Hook is dope.  If you do want to posses marijuana you ought to consider residing in the City of Charlottesville (25 total arrests per 100,000 residents) rather than the City of Emporia (1,595 total arrests per 100,000 residents).  You are 64 times more likely to get a reefer bust in Emporia than in Charlottesville.  Does anybody think that the people of Emporia use marijuana 64 times more often than the people in Charlottesville?  In fairness, I95 comprises about 1/2 of the border of Emporia so many of the arrests may be people using that highway.  However, Falls Church (51) vs Fairfax City (589) makes one wonder.

Unfair at any speed.  As the General Assembly considers decriminalizing the possession of small amounts of marijuana it should also consider the fairness of the present system.  Vast differences are observable in the enforcement of marijuana laws across race and location.  In locality after locality you are more likely to be arrested for marijuana if you are black vs white.  The City of Charlottesville (pop 45k) made 11 marijuana related arrests from 2010 through 2016, fewer than 2 per year.  The City of Danville (pop 43k) made 354 arrests over the same period, over 50 per year.

— Don Rippert

Whatever happened to Terry McAuliffe’s GreenTech Automotive venture?

Photo credit: NewsAdvance

Seems like yesterday.  In late 2012 Terry McAuliffe was the only Democrat running for Virginia governor in the upcoming 2013 election.  One of his central campaign themes was that he was an entrepreneur who would bring jobs to Virginia.  He was also an investor and recently resigned Chairman of a venture called GreenTech, a would be manufacturing company that hoped to make energy efficient electric cars in the United States.  Prior to announcing his second campaign for governor Terry had been out trolling for government subsidies in return for bringing GreenTech’s manufacturing plant to some lucky American community.  During McAuliffe’s tenure as chairman, GreenTech had announced that it would locate in Tunica, Mississippi rather than Virginia.  Candidate McAuliffe was asked why he didn’t bring GreenTech to Virginia at a Dec 5, 2012 press conference.  He claimed that Virginia “decided not to bid” on the automobile plant.  The truth was more complicated resulting in a Politifact article citing McAuliffe’s claim as “false”.  It seemed that Virginia lost out on at least 1,500 GreenTech manufacturing jobs.  The relatively small flurry of controversy over GreenTech subsided, McAuliffe became governor and Mississippi gained thousands of jobs.  Or did they …

Virginia smells a rat.  The Virginia Economic Development Partnership (VEDP) did hold conversations with GreenTech about locating in Virginia during 2009.  GreenTech was scheduled to tour potential plant sites in Danville, Martinsville and Waverly on Oct 7th and 8th.  But then came GreenTech’s surprise announcement to locate in Mississippi on Oct 6.  Was the VEDP just a day late and a dollar short?  Not quite.  Virginia officials were not at all convinced of the overall GreenTech business model.  In a letter from the executive director of VEDP to Virginia’s Secretary of Commerce and Labor those concerns were spelled out.

Mississippi buys a rat.  Apparently, Mississippi saw no problems with a start-up car company building $15,500 to $18,000 electric mini-cars with a top speed of 45 mph for export to China.  Mississippi inked the deal and GreenTech opened a temporary location in Horn Lake, MS in July, 2012.  Bill Clinton and the governor of Mississippi joined Terry McAuliffe for an opening celebration at the site.  The good people of Tunica County (where 33% live below the poverty line) were well on their way to an economic miracle.  Or were they …

Failure to launch.  Virtually nothing came from the promised GreenTech deal.  GreenTech never ended any year with more than 100 employees.  In early 2017 GreenTech shut down its Mississippi operations.  Later that year Mississippi sued to get its money back.   Last February GreenTech filed for bankruptcy.

Peter the Great Pretty Good.  As GreenTech started to unravel ahead of the 2013 election erstwhile Bacon’s Rebellion columnist Peter Galuszka wrote an opinion piece declaring that Green Tech was a mess but not a scandal.  At the time Galuszka wrote that opinion piece GreenTech was still in business and employed about 80 people.  That would roughly mark the zenith of GreenTech’s operations.  Now that the company is dust in the wind lawsuits have been filed.  As Mr. McAuliffe is rumored to be considering a run for president GreenTech may yet graduate from mess to scandal.  It would be interesting to know how Terry McAuliffe fared from a personal financial perspective with GreenTech.  If he lost his own money maybe GreenTech is still just a mess.  However, if he made money on the failed deal it would be a scandal.

Caveat Virginia.  While VEDP’s BS detector seemed to work brilliantly in the GreenTech matter … that’s not always the case.  Bacon’s Rebellion readers should keep an eye out for an upcoming update to the Tranlin deal in Virginia.  It seems likely that the Tranlin deal is not going to end well for the Commonwealth.

— Don Rippert 

2019 General Assembly Session – Privatizing Public Roads in McLean, Va

Judge Dillon’s revenge.  Development vs transportation has been a long running battle in Virginia. Northern Virginia’s local government  politicians never met a developer (or developer’s campaign contribution) they didn’t love. Virginia’s state legislators love NoVa growth since it provides more state tax money to spread around like party favors to their downstate constituencies. However, those same state legislators loathe the idea of repatriating many of those tax dollars back to Northern Virginia to fund needed transportation improvements. The local pols blame the state pols for failing to fund transportation in NoVa. The state pols blame the locals for ineffective land use planning. Meanwhile, both localities and the state are throwing their shoulders out of joint patting themselves on the back over winning half of the new Amazon HQ2 deal. There have even been rumors that Apple may be looking at NoVa for another 20,000 jobs. What could possibly go wrong?

No need to wait for chaos. While Amazon HQ2, Apple and the “densificiation” of Tysons are all largely future events, the chaos of underfunded transportation is already here. Loudoun County’s population grew 97% between 1990 and 2000, 84% from 2000 to 2010 and 27.5% from 2010 to 2017.  Meanwhile, over 50% of Loudoun workers commute to work outside of Loudoun County (hint: they are not working in West Virginia). At the same time, a veritable caravan of immigrants from The Socialist Republic of Maryland cross the Virginia border every morning seeking a better life through employment in Virginia. The predictable result is that the American Legion Bridge has become a chokepoint that backs up the Beltway for miles, especially in the evening.

Adding insult to injury. The same kind of advanced technology that so enthralls Virginia’s politicians in the HQ2 deal creates nightmares for McLean residents. Navigation apps like Waze and Google Maps are being blamed for showing Loudon commuters and Maryland economic refugees how to bypass Beltway traffic by using the surface streets of McLean. The resulting backups on streets that are often narrow and shoulder-less wreak havoc on the daily lives of those living in the affected neighborhoods. One can only wonder how much worse this will get once the new construction in Tysons is completed and Amazon HQ2 starts adding traffic to Arlington, Alexandria and Tysons.

It’s good to be Queen. Del. Kathleen Murphy, D-McLean, has a plan.  Privatize McLean’s public streets for the exclusive use of McLean residents, at least during rush hour. Murphy’s HB295 has been carried over from the 2018 session. The bill is summarized as follows …

“Allows counties that operate under the urban county executive form of government (Fairfax County) by ordinance to develop a program to issue permits to residents of a designated area that will allow such residents to make turns into or out of the neighborhood during certain times of the day where such turns would otherwise be restricted.”

It seems Del. Murphy will protect herself and her well-heeled neighbors in McLean by simply banning traffic she finds inconvenient. Let the commuters eat cake. It’s easy to feel sympathy for the residents of the many areas in Northern Virginia being ruined by clogged streets full of cut through traffic. However, it’s hard to see where this ends. Will the far less affluent citizens of the Route 1 corridor be able to ban cut through traffic on their streets too? Or will this remedy be reserved for Del. Murphy and her wealthy neighbors in McLean?  Limousine liberalism anyone?

Correction: HB295 was incorrectly described as pre-filed in the original version of this article. In fact, it was carried over from the 2018 session.  The content has been changed to reflect this correction.  

— Don Rippert

Va 2019 General Assembly session – prefiled House of Delegates bills

Click here to see the 9 weird laws

Much ado about nothing.  As of this morning there were 83 prefiled bills for the House of Delegates and 225 prefiled bills for the State Senate.  With a few exceptions the House prefiles are pretty “ho hum”.  I will examine the Senate prefiles in a subsequent column.

One from column A and two from column B.  I use a somewhat arbitrary approach to categorizing the prefiled bills.  By my analysis … governmental process (17), education (12), crime and courts (10), election reform (8), finance and taxes (7), health care (6), nonsense (6), environment (6), transportation (4), campaign reform (4) and energy (2).

Governmental process.  These are the day to day clarifications, corrections and amplifications needed to make existing legislation more effective.  For example, HB246 clarifies the role of the code commission in preparing legislation at the direction of the General Assembly.  One of these bills will further depress Jim Bacon’s journalistic sensibilities.  HB1629 eliminates the requirement that Virginia procurement contracts be reported in newspapers.  Mixed in with the proposed routine legislation are some zingers.  For example, there are three separate bills to ratify the Equal Rights Amendment (HJ577, HJ579, HJ583).  There are also four bills proposing changes  to the Virginia Constitution.  HJ578 would add a right to vote to the state constitution, HJ582 would establish a redistricting committee, HJ584 would allow the governor to run for a second consecutive term and HJ585 has the governor and lieutenant governor running as a single ticket instead of separate offices.

Education.  The only theme in the education prefiles is an attempt to provide financial incentives for localities to rebuild the physical plant of their schools.  One of the more interesting bills would allow commercial advertising on school buses (HB809) while another would guarantee that our children’s God given right to wear unscented sun block not be abridged (HB330).

Crime and courts.  Bail bondsmen and bondswomen are forbidden from having sex with their clients (HB525) and shooting a police dog, or even showing a gun to a police dog,  becomes a more serious crime (HB1616).  Other than that, pretty mundane stuff.

Finance and taxes.  Way too many people and too many companies are paying taxes (HB966) and veterinarians really need a break from those pesky sales taxes (HB747).

Potpourri.  The remaining categories contain a few interesting ideas.  Del Rasoul wants to ban the use of fossil fuels in electricity generation (HB1635), Del Cole wants to give I95 some love (HJ580, HJ581) and he also has the radical idea that campaign contributions should not be for personal use (HB1617).  In fact, Del Cole’s proposed legislation is putting him perilously close to making my very short list of competent Virginia legislators.

Closer to home.  My delegate, Kathleen Murphy, continues to propose jaw dropping, eye popping examples of legislative uselessness.  She proposes to let her pals skirt Virginia traffic laws by displaying a special sticker on their cars (HB295) and offers some odd rules on distance learning reciprocity (HB659).  I guess issues like mass transportation don’t cross her mind these days.

— Don Rippert.

Virginia to Consider New Marijuana Decriminalization bill in 2019 General Assembly Session

If at first you don’t succeed … State Sen. Adam Ebbin (D-30) has pre-filed a 2019 bill to decriminalize possession of small amounts of marijuana in Virginia. The matter will be taken up in the General Assembly session in early 2019.  Last year Ebbin patroned a similar bill that was defeated 9-6 in the Senate Courts of Justice Committee along party lines.

Still illegal.  The new Ebbin bill, like the one in 2018, proposes to decriminalize (rather than legalize) the possession of small amounts of marijuana in the Old Dominion. The law presently in place provides for a maximum $500 fine and up to a 30 day jail term for the first offense.  Penalties escalate for subsequent offenses. Ebbin’s proposed bill makes possession of a small amount of marijuana a civil offense with fines of $50 to $250 depending on a variety of circumstances such as whether it was the first offense or a subsequent offense.

Another loser for the RPV / GOP.  The vast majority of Americans and Virginians support the decriminalization of marijuana. In fact, a notable majority of Americans and Virginians go so far as to support legalization of marijuana. Yet the supposedly liberty loving, regulation hating Republican Party has done everything it can to oppose both decriminalization and legalization. As previously mentioned, the nine Republicans on the Senate Courts of Justice Committee blocked full house consideration of Sen Ebbin’s bill in 2018. At the national level it’s much the same. Rep. Earl Blumenauer (D-OR) has written a “Blueprint to Legalize Marijuana” .  It’s a pretty simple plan … take control of the House then enact marijuana reform. Up until now that blueprint was blocked by the House Rules Committee led by its chairman, Pete Sessions (R-TX).  But things are different now that the Democrats have taken control of the house.  Plant prohibitionists like Rep Sessions are no longer calling the shots.

2019. Another year, another marijuana decriminalization bill in the Virginia General Assembly. What will become of SB997 in 2019? My guess is for a repeat of 2018 with Republicans killing the bill in committee.

Demographic changes? There has been a lot of discussion about the recent federal election on this blog. Much has been made of how the success of Democrats in Virginia is an inevitable consequence of demographics and the influx of those from outside Virginia. Some have even taken to calling Virginia the southernmost northeastern state. Balderdash. The real problem is that Virginia’s Republican politicians and the RPV are clueless. The question of marijuana reform crosses demographic boundaries. Middle-aged adults are using marijuana at an increasing rate. Last year, all nine of the Republicans on the Senate Courts of Justice Committee voted to block the decriminalization bill. At the same time 76% of the Virginians these Republicans claim to represent support marijuana decriminalization. Meanwhile, arrests in Virginia for marijuana rose 20% in the last year. Arrests for a “crime” that more than three quarters of Virginians don’t think should be a crime are skyrocketing while the aged political elite in the RPV blocks so much as a full vote on the matter. I wonder why the Republicans keep losing in Virginia? It has far more to due with a lack of competence than a change in demographics.

— Don Rippert

Virginia’s 2018 Marijuana Decriminalization Bill: What Happened and What’s Next?

Up in smoke.  During the 2018 General Assembly session a bill to decriminalize marijuana was killed in committee.  The Senate Courts of Justice Committee voted along party lines on that bill, SB 111. All nine Republican Senators on the Committee voted to keep marijuana possession (in any amount) a criminal act in Virginia while all six Democratic Senators voted to decriminalize pot.  To be clear – the vote was to decriminalize possession of small amounts of marijuana, it was not a bill that proposed legalizing marijuana.

Here today, here tomorrow.  Decriminalization foes won the SB111 battle in 2018 but the war goes on.  The lines are drawn for the next skirmish.  As Sen Mark Obenshain (R-Rockingham), who voted against decriminalization, said … “It’s an issue that isn’t going away.  We’re going to be talking about it for a long time.”  That’s an interesting comment from a prohibitionist.  One can only hope that Sen Obenshain knows that time and further dialog are both working against him and his fellow pot prosecutors.  If he doesn’t understand that I’d really like to ask him what he’s been smoking.

Abby Hoffman vs Barney Fife.  The main support for decriminalization comes from the ACLU with a supporting cast of politicians including U.S. Senator Tim Kaine (federal decriminalization), Governor Ralph Northam (a medical doctor) and Adam Ebbin  (D-Alexandria).  Opposition is led by the Virginia Association of Commonwealth’s Attorneys with political support from the aforementioned Sen. Mark Obenshain (R-Rockingham).

Arrested development.  Subsequent to the committee vote on decriminalization, statistics were released that revealed arrests for marijuana possession in Virginia shot up in 2017, increasing by 20% over 2016.  Apparently, prosecuting Virginians for possession of a plant is a large and fast growing business in the Commonwealth.  One can only guess how much criminalizing marijuana costs Virginia or how many Commonwealth’s Attorneys have jobs based on pot possession being a crime.

Oh wow … what’s a voter … man?  A poll on the question of decriminalizing possession of small amounts of marijuana in Virginia was published in the midst of the 2018 General Assembly session.  Conducted by the Watson Center for Public Policy and Christopher Newport University, the poll found that 76% of Virginians favored decriminalization.  And the Republican politicians in Virginia keep wondering why they are continually losing their power and influence in Virginia.  Perhaps they would be well advised to just roll that number around in their heads for a while … seventy-six percent.

Heroes.  Senators voting for decriminalization of small amounts of marijuana: Creigh Deeds, D-Bath; John Edwards, D-Roanoke; Janet Howell, D-Fairfax; Louise Lucas, D-Portsmouth; Chap Petersen, D-Fairfax City; and Dick Saslaw, D-Fairfax.

Zeroes.  Senators voting against decriminalization: Ben Chafin, R-Russell; Ryan McDougle, R-Hanover; Tommy Norment, R-Mars; Mark Obenshain, R-Rockingham; Mark Peake, R-Lynchburg; Bryce Reeves, R-Spotsylvania; Bill Stanley, R-Franklin County; Richard Stuart, R-Stafford; and Glen Sturtevant, R-Richmond.

2019.  2019 is an election year for Virginia’s state legislature.  Democrats will push another marijuana decriminalization bill in the 2019 General Assembly session.  Then they will beat the Republicans who opposed the bill over the head with those votes in November.

— Don Rippert.

The case for legalizing recreational marijuana use in Virginia

Caveat.  While I have no moral objection to the possession of marijuana I do not espouse breaking the laws of the Commonwealth of Virginia.  I believe the marijuana laws in Virginia should be changed but, until they are changed, I encourage everybody to obey the laws as they are presently written.

Strive for five.  I believe the five key reasons for legalizing recreational marijuana use in Virginia for adults are liberty, the failure of the current approach, costs of enforcement – both financially and in terms of racial bias, the economic benefits to the state and the inevitability of legalization.  Each will be discussed in turn.

Democracy, liberty and freedom.  The first and most important reason to legalize recreational marijuana use in Virginia is philosophical.  Our political leaders in Richmond speak in hushed, reverential voices about “Mister Jefferson”.  They then turn around and ignore the fact that a significant majority of Virginians favor legalizing marijuana.  Somehow, our political leaders seem to think that banning a plant against the wishes of a majority of the electorate is commensurate with Thomas Jefferson’s ideals of democracy, liberty and freedom.  Perhaps our General Assembly should start referring to Thomas Jefferson as “ole what’s his name” until they can demonstrate some willingness to adhere to Jefferson’s actual views on liberty, etc.

Pot prohibition has failed.  Federal, state and local efforts to make and keep marijuana use illegal have not curtailed its use.  Our government has been busily trying to ban marijuana since 1937 and raised the stakes considerably with the Controlled Substances Act (which became effective in 1971).   Nearly 50 years after the federal government made marijuana a Schedule 1 “narcotic” its use continues to rise.

Enforcement and racial bias.  The enforcement costs needed to continue the ineffective prohibition of pot are very high.  In Virginia authorities have made 133,000 arrests for marijuana possession over the past 10 years.  10,000 Virginians are convicted of a first time marijuana possession offense every year. In fact, marijuana arrests in Virginia increased over the past year.  Worse yet, the arrests are heavily weighted against African-Americans.  VCU studied the data in 2015.  As NORML calls out, “That study concluded that blacks account for nearly half of all marijuana possession arrests, but comprise only 20 percent of the state population.”  Some parts of Virginia are far worse than that.  “In some counties and towns, such as in Hanover County and in Arlington, Virginia, the black arrest rate was six to eight times that of whites.”  These arrest ratios completely diverge from studies showing that marijuana use is roughly the same between backs and whites.

Economics.  The Kansas City Federal Reserve studied the economic impact of marijuana legalization on the state of Colorado … “In 2017, the state of Colorado collected more than $247 million from the marijuana industry, including state sales taxes on recreational and medical, special sales taxes on recreational, excise taxes on recreational and application and licenses fees.”  Given that Virginia’s population is 42% bigger than Colorado’s a straight line interpolation would suggest $353m in annual taxes in Virginia.  That total does not count the savings from reduced law enforcement nor does it include the potential profit generated for the state if the legal marijuana were sold through Virginia ABC stores.

Inevitability.  Nine states and DC have legalized marijuana.  Michigan and North Dakota will vote on adult use marijuana legalization this November.  This week the entire country of Canada legalized the recreational use of marijuana.  Once again Virginia is being surrounded by progress and once again Virginia is standing slack jawed and rheumy eyed as a philosophical island of obstinate resistance to inevitable change.

– Don Rippert.

When and Why Can the SCC Say No?

When the General Assembly and Governor pass a law that states a source of electricity – or even a specific power project – is in “the public interest,” what is the State Corporation Commission left to do?  Does that mean the SCC must approve the project even if it turns out to be unreasonable, imprudent or not needed?

Since 2007 the Assembly has designated several aspects of generation and transmission “in the public interest,” this year adding to the list up to 5,000 megawatts of renewable generation and a small and expensive demonstration project for off-shore wind for Dominion Energy Virginia.  Before going further on that wind project, Dominion filed a petition seeking a declaratory judgement on the question of prudence.  Just because one parent said yes, best to check with the other one.

The two SCC commissioners then turned the tables and asked all participants in the matter to give their legal opinion on seven specific questions.  Lawyers for the two major electricity providers, for environmental groups and for the Office of the Attorney General all took a crack at questions such as this one:

“6. Do the statutorily-mandated public interest findings under either Subsections A or E override a factual finding that the project’s: (a) capacity or energy are not needed for the utility to serve its customers; and/or (b) costs to customers are unreasonable or excessive in relation to capacity or energy available from other sources, including but not limited to sources of a type similar to the proposed project?”

Before Dominion dictated a new regulatory approach in 2007,and before Virginia legislators developed a taste for micromanaging the state’s energy economy, such questions never came up.  The SCC had unlimited authority to decide what was needed, prudent or reasonable, subject to appeal.

The briefs are all buried in this pile of documents and they were supplemented with oral arguments on Thursday, drawing a packed house.  There was agreement that a finding of public interest is distinct and does not override questions of prudence or reasonable cost, and the SCC can reject a project for those reasons.  But picking up a phrase used before, Joseph Reid III of McGuireWoods said Dominion views the legislative blessing as “a thumb on the scale” and that phrase in the law “strongly encourages a result.”

The petition dealing with the wind project is filed under a new process for testing prudency. “It would be illogical for the General Assembly to first declare solar or wind generation facilities to be in the public interest and provide for a prudency determination if the General Assembly meant for the terms to be treated synonymously. There would be no need for a prudency determination if such was the case,” wrote Assistant Attorney General Mitch Burton of the Consumer Counsel’s staff.

Burton also pointed to the part of the new bill dealing with putting residential power lines underground.  The General Assembly years ago deemed that underground program in the public interest, and directed the SCC to interpret the law liberally, yet the SCC scaled back the project based on cost.  This year the Assembly added a hard mandate that those costs had to be deemed reasonable,  but that implies SCC discretion remains in other areas.

At times the argument focused on the general issues, but at other times it focused on the project at hand – the 12 megawatt, two-turbine wind project planned for 27 miles off Virginia Beach and projected to cost $300 million.  Supporters of the project argued that the SCC should not reject it just because the tiny energy output is not needed.  Given this has been billed all along as a small demonstration project, not a major source of electricity, the question of need may not apply in its case.

But need will be a question in other cases, and projected demand growth is a major dispute in the pending Dominion integrated resource plan.  The rapid move to renewable sources may be accompanied by the early (and costly) retirement of existing fossil fuel generation. This part of the discussion produced the strongest disagreement among the parties.  They had different answers to part (a) of the question set out above.

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Has NoVa Finally Woken Up?

VA-10.  State Senator Jennifer Wexton (D) hopes to unseat Congresswoman Barbara Comstock (R) in Virginia’s 10th Congressional District.  A typically gerrymandered Virginia district, the 10th stretches from inside the Capital Beltway to well west of Winchester.  As a resident of the 10th I watch the elections in that district closely.  This one is shaping up to be a doozy.  Far left Jennifer Wexton is running on an anti-Trump platform while trying to avoid taking a position on any issue relevant to the constituents she hopes to represent.  Meanwhile, Barbara Comstock is running as an embarrassed Republican who tries to avoid gazing east at the current occupant of the Oval Office.  Think Nelson Rockafeller in drag.  All in all I think Barbara Comstock has done a better job of explaining herself and focusing on issues that are relevant to her district.  One issue in particular stands out for me – the allegation that Wexton has sold out Northern Virginia during her time in the General Assembly.

Don’t get Wexton’ed.  Recent negative ads run by the National Republican Congressional Committee (presumably) on behalf of Barbara Comstock hit a point that hasn’t been hit before.  The ads call out Jennifer Wexton for her role in the General Assembly’s massive rip off of Northern Virginia.  The 30 second ads are punchy and direct.  One ad has a graphic that shows money raining out of NoVa into Richmond.  It cites high tolls and NoVa – only taxes.  Needless to say, Jennifer Wexton is the highlighted villain.  Another ad shows traffic jams and tolls in NoVa then cuts to a single car effortlessly driving down an otherwise empty road claiming, “The rest of the state rides for free.”  As far as I’m concerned, the ads are completely on target and finally call out the gutless NoVa politicians we have elected for selling out their constituents.

I wish I could drive I295.  For many people from Northern Virginia there certainly seems to be a vast sucking sound coming from the General Assembly in Richmond.  There also seems to be a two class system when it comes to a lot of things including transportation.  Take Richmond for example … the city, not the state government.  The OMB defines the greater Richmond area as comprising thirteen counties, including the principal cities of Richmond, Petersburg, Hopewell, and Colonial Heights. As of 2016, it had a population of 1,263,617.  Somehow, this qualifies the area for a 4 lane “beltway” called I295.  Meanwhile, the greater Washington area has a population of 6.1m as of 2016.  It also has a 4 lane beltway in NoVa.  An area with 4.7 times the population of Richmond somehow ends up with the same sized highway encircling it as Richmond gets?  And Jennifer Wexton thinks that’s all fine and dandy?  Comstock’s right – let’s not get Wexton’ed.

Thanks, Barbara.  Jennifer Wexton is hardly alone in selling out her constituents.  All 140 seats in the Virginia General Assembly are up for election in 2019 including every state politician claiming to represent Northern Virginia.  It’s high time that all of NoVa’s politicians are taken to task for selling out their constituents.  Hopefully these ads and others like them will continue to haunt the comfy re-election dreams of our political class in Northern Virginia.  If our politicians want to argue about their role in grifting NoVa the approach is easy … clearly and quantitatively document the amount of money taken by state and local government in NoVa and compare it to the amount of money spent by state and local government in NoVa.  Then … defend the difference.  I happen to know that a number of General Assembly members from NoVa read this blog (at least occasionally).  Any of you who read this – are you up for the challenge of demonstrating the fairness of your actions vis-a-vis inflows and outflows of money from NoVa?  I won’t hold my breath.

— Don Rippert

Limousine liberalism in Alexandria, Va

Stinking to high heaven.  The City of Alexandria spews an astonishing 11 million gallons of raw sewage into the Potomac River every year.  The overflows happen just about every time it rains.  This is the result of a combined sewer system that is designed to collect sewage and runoff in a single system.  When it rains, the runoff spikes and Alexandria’s treatment plant can’t handle the volume.  The excess of mixed runoff and sewage is intentionally overflowed into the Potomac River in four separate dumping locations.  This has been happening for 100 years.

Raising procrastination to an art form.  Many U.S. cities have combined sewer overflow (CSO) problems.  The environmental damage is well understood and the approach to solving the problem is well understood.  You basically build a great big underground holding tank to catch the excess sewage and runoff until the treatment plant can catch up to demand. Washington, D.C., Richmond and Lynchburg join Alexandria in needing to deal with their CSO problem.  The difference between Alexandria and the other three cities is that the other cities are well along in solving the problem while the well-heeled progressives in Alexandria were content to spew human waste into the Chesapeake Bay watershed without any more than a pretense of a plan to remedy the situation.  However, in a stunning stroke of clarity, the Virginia General Assembly changed all that.  They boxed Alexandria’s ears leaving the snowflakes in that city’s government with an epic case of tinnitus.

Our glorious General Assembly.  During the 2017 session the Virginia General Assembly essentially told Alexandria that “enough was enough.”  The legislature passed bills setting a fast-paced schedule for Alexandria to fix its disgusting sewer system.  The city has eight years to attend to a problem that should have been addressed a decade ago.  The Mayor and City Council members of Alexandria cried like babies after being told they needed to stop dumping raw sewage into the river.  Alexandria has a median household income of $89,200 and can afford an “Office for Women” along with hybrid buses that cost $750,000 apiece (twice the cost of a normal diesel bus and they idle all the time anyway).  However, they can’t fund a fix to dumping raw sewage?

Odd bedfellows. The Alexandria sewage affair made for some odd bedfellows.  Progressive Democratic state Senator Scott Surovell, D-Mount Vernon, launched a Twitter offensive against his lefty pals in Alexandria over the matter.  Of course Surovell represents the district immediately downriver from Alexandria!  Conservative Republican state senator Richard Stuart, R-Westmoreland, patroned the initial legislation, which was much more draconian than what was ultimately passed.  Stuart also represents a district downriver from Alexandria.  Support for the bill in both the House and Senate came primarily from Republicans while opposition was primarily from Democrats. Governor McAuliffe tried to elongate Alexandria’s schedule but was rebuffed by the General Assembly and ultimately signed the strict bill.

Update. After insisting that the city needed five years to study the matter Alexandria’s plan was written and approved within a year. After insisting that the eight-year schedule was an engineering impossibility the city now says the schedule is doable. Funny what happens when liberals are forced to do the things they insist everybody else must do.

Warning. Before any of you wizards in the peanut gallery start carping about my anti-liberal bias … remember this post.  I am anti-two-faced politicians who espouse a political philosophy like property rights or environmentalism but then backtrack on their supposed beliefs when it comes time to act.

Hero award: Scott Surovell.

— Don Rippert

Weak Growth Makes Conformity Revenue Tempting

Virginia economic performance measures 2017 and 2018. The U.S. exceeded expectations while Virginia lagged.

I called it correctly back in June: Conformity to federal tax reform produces a major boost in state revenue which the state’s leadership on both side of the aisle is strongly tempted to keep because the state remains strapped for cash.

The signs of economic stress are all over Secretary of Finance Aubrey Layne’s August 17 presentation to the General Assembly’s money committees. At the end of perhaps the longest U.S. bull market in history, following a tax cut designed to stimulate growth and a major shift in regulatory climate, Virginia continues to under-perform the national economy. The employment growth figure of less than one percent stands out.

Yes, Virginia ended fiscal year 2018 on June 30 with $555 million more general fund revenue than projected in the budget – a 2.7 percent cushion. But Layne explained a large part of that came from $120 million in last-day deposits  made earlier than normal because of the July 4 holiday timing. It also appears many taxpayers boosted their withholding because of uncertainty over whether or how Virginia would conform to federal tax reform.

The report shows Virginia missed its forecasts on corporate income, recordation, insurance premium and other smaller taxes tied to economic activity, and only exceeded the sales and use tax projection by one-tenth of one percent. Layne, always candid, mentioned the growing prevalence of sales and use tax exemptions as business incentives as one reason that revenue source can’t seem to grow.

The chart above shows the basic problem:  Virginia missed its own forecasts on employment and wage growth, while at the same time the national forecasts – higher to begin with – were being beaten. The similar chart for the new fiscal year shows the same expected result – Virginia trailing the national averages into next year.

The overall general fund growth target for fiscal year 2019 is an anemic 1.4 percent. The first month of the new year, July, was down from last year.

This continued weak economic performance explains why Virginia seems unable to refill its mandatory revenue stabilization fund, or rainy-day fund. There are no large surpluses to direct to that purpose, so only a trickle of money is flowing in. By law, Virginia also has dedicated portions of any surplus revenue to several other uses.

Virginia has avoided the wrath of the Wall Street rating firms over its small reserves by setting aside a second, non-mandatory revenue reserve with what would otherwise be operating cash. Only with the help of that will the reserves exceed $1 billion by 2020.

Failure to Launch: Virginia’s Rainy Day Fund must be supplemented by diversion of operating funds to even approach its prior totals. Source: Layne presentation.

Much of this was overlooked because the discussion Friday promptly turned to tax policy and Governor Ralph Northam’s call for full conformity with the federal changes, projected to increase state tax revenues by $3.6 billion over five years.  But the link between the two issues is strong.

At the end of his presentation Layne went through several risks facing the state, and these did not include the giant risk of an economic downturn or stock market crash (which came up in response to a question from Del. Scott Garrett, R-Lynchburg).

Virginia has apparently made some major economic development promises, a package of incentives large enough to lead Layne’s list of revenue risks should the deal be sealed and announced  Is it Amazon? He was careful not to mention names, but such an open discussion was unprecedented. It must be a huge incentive promise.   Continue reading

The Truth Is Out There (To Be Revealed Friday)

So it’s going to be politics, not economics. Perhaps it was inevitable.

On Friday Governor Ralph Northam and Secretary of Finance Aubrey Layne will be presenting to the House and Senate money committees, part of their report looking back (at the completed fiscal year), but the key parts of their message looking forward. Both are expected to put some flesh on the bare-bones announcement made last Friday about how the Governor wants Virginia to respond to the opportunities created by federal tax reform.

The announcement was telegraphed by the left-leaning Commonwealth Institute for Fiscal Analysis, which endorsed converting Virginia’s Earned Income Tax Credit into a fully refundable version, putting cash in people’s pockets, discussed in a previous Bacon’s Rebellion post.  The political angle was described well this morning by the Democrats’ Virginia media strategist Jeff Schapiro, also of the Richmond Times-Dispatch, who tagged the EITC proposal as aimed at the 2019 legislative elections.

Finally you can see the strategy in the Governor’s own guest column today, this from the Roanoke Times.

“The recent federal tax changes have benefited mainly higher earner. These tax policy changes from Washington will result in additional revenues to Virginia. We can use this opportunity to invest in those who need it most— hard working Virginians. We can do this by making Virginia’s existing earned income tax credit refundable, ensuring that 600,000 working Virginians, including thousands of veteran and military families, can get the full tax benefit for which they qualify.”

What the Governor and Secretary Layne know that we don’t yet is, well, everything. The state commissioned a detailed study of the state-level financial impact of the various federal tax rules changes. That was the apparent basis for the Governor’s announcement Friday that about $500 million plus in new state revenue will result, half of which he wants to use to finance the EITC refunds and half of which he wants to keep in the General Fund.

Secretary Layne assured Bacon’s Rebellion after that press conference that the full report from the consultant will be released and available online Friday after the Governor speaks. Until that report is picked apart, anybody who hasn’t read it is just speculating. I won’t join in that yet.

Probably the best analysis of the issues – written without access to the new report on the numbers – was released this week by Jared Walczak of the Tax Foundation. Come Friday it should be clear where that $500 million estimate came from, which tax provisions produced additional revenue and which taxpayers may pay more in the long run.  And it may be clear whether that windfall results from full conformity to the myriad federal changes, no conformity to the federal changes, or from cherry-picking which provisions to accept or reject – meaning a different combination produces a different revenue result.

There has been no mention so far, but expect news on Friday, about the potential state revenue boost from requiring more out-of-state retailers to collect and remit sales tax on goods they ship to Virginia customers.  And until Friday we really won’t know the size of any surplus from fiscal year 2018, or the status of the reserve funds. Those are also key parts of this coming tax debate.

This is the best opportunity in a generation Virginia has seen for some intelligent tax reform, something positioning our economy for this century. And tax reform does not mean cut my taxes and raise somebody else’s. As previously noted the EITC is an effective anti-poverty program, and Virginia’s income tax is arguably regressive, hitting lower income workers harder than it should. But that is just one element of what needs to be a long conversation that ranges over the whole tax code, one that has been stymied for decades because of the various political risks.

Somebody Must Think We’re Stupid

David Poole and his team at VPAP have provided another illustration of how the reporting requirements placed on lobbyists at the state Capitol are intentionally vague and useless.  The chart above deals with the reports on lobbyist compensation.

This is usually the figure at the heart of the occasional stories about the amount spent by an individual company, or the gross amount spent on lobbying by all who file these forms.  But in practice almost nobody reports in full what they are paid, and they of course do things other than lobbying with their time.  So they pro-rate their fee and salary and report only a portion of it.

Who draws the line?  Who picks the formula for pro-rating the time? The lobbyist or the principal do so for themselves and are never asked to report their rationale.  That’s why comparisons are impossible – some report 5 percent and some 100.  Partly there is the natural reluctance everybody has to reveal their income, but there is also a reluctance to stand out as a big spender on charts like those produced by VPAP or in a news story.

A Peek Inside the Process

Years ago, one of the best lobbyists I ever worked with, a fine lawyer, instructed me that only the time I spent talking or writing to a legislative or executive branch official about a specific bill or vote was lobbying.  The time I spent researching the issue, drafting legislation or talking points, driving to the meeting, sitting in the anteroom – none of those hours, the bulk of the time, constituted lobbying.  The ten or fifteen minutes in the room, that was the only actual lobbying.

This all flows back to the very narrow definition of lobbying in Virginia law, which does not get into indirect lobbying or grassroots lobbying or lobbying preparation, all things that come up when companies are deciding what is and isn’t lobbying for federal tax compliance purposes.  This situation is too ridiculous to be accident or oversight, and extremely convenient for both the lobbyists and the lobbied.

Compensation is not that relevant.  What matters far more, the real glaring gap in the reports, are the details about what specific subject matters, bills, budget amendments, gubernatorial appointments or procurement decisions are being influenced.   The shameful gaps in the reports include loopholes that allow expensive dinners, gifts or entertainment to be given with no recipients named, or money to shuffle between various entities under the guise of some unregistered coalition.

Also, the full extent of grassroots or indirect efforts needs to be revealed.  More and more issues now spark television, direct mail, phone bank and other campaign style communications efforts, and every dime spent on those should be just as transparent as if they were being spent on a candidate.

One area where compensation should be reported in full is when the client is the government.  Beyond that, we need to focus on those other more important failings in the current non-disclosure disclosure regime, although this contribution by VPAP is useful in demonstrating that somebody out there thinks we’re stupid.

Goodbye and Good Riddance to Goodlatte

Carpetbagger. Bob Goodlatte is the 13-term congressman from Virginia’s 6th Congressional District who has blessedly chosen to retire this year. In my opinion he represents just about everything that is wrong with the GOP. Born in Holyoke, Massachusetts and educated at Bates College in Maine, Goodlatte somehow avoids the “carpetbagger” moniker so quickly put on Terry McAuliffe by Virginia’s Republicans. He won his congressional seat at age 39 and has spent the last 26 years in Congress. Yet he goes uncriticized as a “politician for life” by the conservative Newt Gingrich types who claim to eschew such long running elected officials. He is a polluter’s best friend with apparently no concern for the property rights of those negatively affected by the pollution he justifies and defends. However, he’ll be gone soon and you’d think we’re past the damage done by this phony conservative. Oh no.  Even in his final days in office Goodlatte is actively denying people protection of their property rights despite “property rights” supposedly being a core tenet of conservative Republican dogma. What a farce.

Blowing up the blueprint. The Chesapeake Bay represents not only a national treasure but a working laboratory for the protection of property rights. Certainly right thinking conservatives must believe that allowing a small minority of people and corporations to pollute a public waterway unfairly takes away the property rights of non-polluters. In the case of a waterway that borders multiple states, one would think that sensible and honest conservatives would insist that the federal government protect the property rights of all the states.  Isn’t this both a core tenet of conservatism and a reasonable construct of property rights?  Not according to Bob Goodlatte.

The Chesapeake Bay watershed states have claimed to be working together to clean up the Bay for the past forty years. For 31 of those years the effort failed as various states simply ignored their clean up commitments. Then, in 2009, the EPA was authorized to provide scientific leadership and oversight for a new clean-up plan — the Chesapeake Bay Clean Water Blueprint. Progress has been substantial since that time. Despite Virginia being a major beneficiary of the blueprint, one of our own Congressmen has put forth an amendment to curtail the EPA’s role in this effort.  You guessed it, ole Bob Goodlatte sponsored an amendment to H.R. 6147 forbidding the EPA from spending money to provide firm, science-based accountability over the blueprint. As a press release from the Chesapeake Bay Foundation puts it, “Congressman Goodlatte’s amendment would keep EPA from using any funds to provide this “firm accountability” if a state fails to meet its pollution-reduction goals set under the Blueprint.” So much for preservation of property rights from this so-called conservative.

Hall of shame. Bob Goodlatte’s amendment for the protection of raw sewage in public waters passed the House of Representatives by a vote of 213 to 202.  Seven of Virginia’s Representatives (Wittman, Taylor, Scott, McEachin, Beyer, Comstock and Connolly) repudiated Sideshow Bob and his amendment by voting against it. However, four of our so-called representatives (Garrett, Goodlatte, Brat and Griffith) couldn’t find the mental acuity to understand how a clean Chesapeake Bay might help the Commonwealth of Virginia. While it’s no excuse for their buffoonery Garrett, Goodlatte and Griffith have districts far from the Bay. Brat, by comparison, has a district bordering the city of Richmond. What are the voters in the 7th district thinking? Will “Kepone Dave” get re-elected? Here’s a good article about the cleanliness of the James River in Richmond (warning: true but disgusting content)

Going forward. The congressional seat being vacated by Bob Goodlatte’s retirement will be contested by Ben Cline (R) and Jennifer Lewis (D). Cline is a member of the General Assembly and long time Goodlatte toady. Lewis is a bleeding heart liberal with minimal political experience. So far, Lewis has raised $72,000 to Cline’s $787,000. The Cook Partisan Voter Index for the district is R+13. Sadly, Cline will almost certainly win and continue the anti-conservative, anti-Virginia activities of his predecessor.

— Don Rippert