Category Archives: Economic development

Virginia Beach Budget Will Lower Your Standard of Living

When Councilman John Moss narrowly lost his seat on City Council in a 2022 three-way race, Virginia Beach lost the lone elected official who actually understood municipal budgeting. Moss could be counted on to make city budgeteers squirm as he peppered them with intelligent questions about why they continually funded vacant city jobs and then used the surplus as a slush fund for the pet projects of city cronies. Plus he ALWAYS pressured his colleagues — fruitlessly, as it turned out — to lower the annual real estate tax rate to give homeowners relief from soaring assessments.

John Moss, who was first elected to City Council in 1986, is running for mayor. We asked Mr. Moss for his input on the budget City Council will vote on tonight.

—Kerry Dougherty 

by John Moss 

No Beach family or resident who lives alone needs to be told they are losing control over their economic lives. We all know our purchasing power is in free fall.

Inflation benefits only tax collections.

There is one group in our community that is clearly detached from the economic reality that Beach residents — and all Americans — understand and experience each day.

That group is the Virginia Beach City Council. Continue reading

Parking Decks, Debt, & Trap Doors

by Jon Baliles

On Wednesday afternoon at 3:00pm in City Council chambers, City Council will vote and approve the plan presented by the Mayor and Chief Administrative Officer (CAO) to allow Richmond to issue $170 million in bonds to pay for the new baseball stadium on ten acres that will be surrounded by about 57 acres of new development built out over the next decade plus.

Two years after kicking off the Diamond District process, the new plan announced a month ago was suddenly hailed as the fastest way to build a new stadium so Major League Baseball (MLB) doesn’t move the franchise for failing to upgrade stadium facilities as promised since The Diamond is too archaic to be retrofitted or modernized.

Wednesday will be a rosy “kumbayah” meeting in which all the positives will be laid out in front of the Council and the public and none of the negatives or risks will be discussed. The public hearing will take place, but many people will be at work in the afternoon or picking kids up from school, and others might decide to stay home knowing this deal will be approved by Council on a 9-0 (or maybe an 8-1) vote.

The city’s “leaders” and financial experts promise this new plan will save millions over the next three decades because of lower interest rates and “almost no risk,” compared to the original plan they started out with two years ago. But the Mayor and CAO, in their desperation to get any deal done and not lose a second baseball franchise, forgot to put any protections in the deal for the city and managed to leave a trap door.

They swear up and down that the development that has been occurring organically in and around Ashe Boulevard and Scott’s Addition will continue (which is very probable), and that the new development in the Diamond District will produce enough new tax revenue to cover, or almost cover, the annual debt required to pay the bonds back (or so we are told).

But what no one will talk about on Wednesday is the trap door in the form of a blank check called the Community Development Authority (CDA) that will have a real impact on future city budgets and city services for decades to come. Two years ago when the Diamond District was announced, the plan was to create a CDA to issue bonds for the stadium that would be paid back by tax revenue from the development within the district’s boundaries. Continue reading

Fairness + Accountability = Thriving City

by Jon Baliles

The city of Richmond seems to be trying to plug all of the holes in its boat, also known as the U.S.S. Meals Tax Fiasco, that has been taking on water for months. It seems that the city is finally wiping out the erroneous meals tax payments and interest they had charged numerous restaurant accounts in recent years, often amounting to tens of thousands of dollars, without ever telling them the bills were so enormous.

Tyler Layne at CBS6 reported last week that Matt Mullett, the owner of Richbrau Brewing, recently got a call from the city’s Finance Director, who said the city would clear his $50,000 bill that accrued due to bad advice he received four years ago from the Finance Department when they told him he did not need to collect meals taxes on draft beer, even though the department had lost a case just a few years prior.

In addition, Mullet’s business was now finally eligible to receive Enterprise Zone grant money to improve his business. This money had already been approved several years ago, but was not released because the city said they owed all the back meals tax money. Which he didn’t. Nevertheless, Mullet took the high road and was thankful the unnecessary drama and delays were behind him so he can move forward with his business. Continue reading

Beach College Weekend Was a Dud: The Good News & The Bad.

by Kerry Dougherty 

Talk about spinning until you’re dizzy, get a load of the local coverage of last weekend’s taxpayer-subsidized Audacity Oceanfront Concerts:

Describing the anemic “crowds” as “smaller-than-expected” The Virginian-Pilot added “That’s not to say those who attended didn’t have a good time.”

Oh please.

We, the taxpayers, gave the organizers of this dud $750,000 to bring the show to the oceanfront, plus an untold number of “in-kind-city services” in return for an advertising campaign showcasing Virginia Beach.

Judging from the virtually empty resort area last weekend even that p.r. offensive fell flat.

The organizers blamed the weather for the poor turnout, but there wasn’t a drop of rain, just chilly late April temperatures.

What happened was actually good news: it appears that Beach College Weekend, an annual headache for the Resort City, may have moved on. Continue reading

Diamonds Aren’t Forever

by Jon Baliles

The entire saga of the development of the Diamond District project in Richmond has come full circle in the last 18 months, as Mayor Levar Stoney, desperate for an economic development win after the failure of his Navy Hill boondoggle and two failed casino referendums, has rounded the bases trying to get a baseball stadium built before the franchise was going to be moved by the powers at Major League Baseball (MLB). Finally scoring a run, however, will come with a cost: $170 million to be exact, because that is how much debt the city will issue  to pay for building the stadium and surrounding infrastructure for the rest of the Diamond District development.

The big news broke last week about the new plan to build the baseball stadium but is also being accompanied by a new financing and development structure and procedures. The announcement unfortunately pre-empted the planned Part 3 of our baseball stadium series, which explained that, at this late date, the only option left to get the stadium built in time and not have MLB yank the franchise was for the city to issue general obligation (G.O.) bonds. That was the only evidence MLB was going to accept to prove the money to build the stadium was actually there and construction could actually begin, because all the talk from the city had been just one missed promise after another, and delay after delay.

The bomb was set to explode and the Mayor and Chief Administrative Officer (CAO) played the last card they had left. They will put the onus of the debt and risk all on the city’s shoulders, issue the debt quickly and get the shovels turning to meet the deadline. But that is not at all how this process began, and it has changed drastically in the many months the city spent dithering. Continue reading

Youngkin Kicks the Can Down the Road on Affirmative Action

by Jock Yellott

By partisan votes, the Democrat controlled General Assembly presented Republican Governor Youngkin with HB 1404, mandating affirmative action in Virginia government contracts.  

Bacon’s Rebellion published a piece that listed the bill as a veto candidate. One of those that would “have the greatest negative economic impact on the Commonwealth.”

But instead of a veto, at the 11th hour on Monday April 8, 2024 Governor Youngkin proposed amending it.

The amendments would postpone its effective date for a year — if reenacted by the General Assembly. Meantime, let’s have more “input.” Continue reading

RVA Meals Tax: Practically Poetic Injustice

by Jon Baliles

As noted, two weeks ago City Council approved the change to city code to make sure the city’s Finance Department only applies meals tax payments to the month for which the invoice is submitted. So, no more of the shady practice that had been applying a portion of say, May’s tax payment, to an outstanding balance from April’s bill. The reason that’s a bad idea is that the city could put any account in arrears but the business owner never knew because the city had a practice of not informing the business they were in arrears, which led to the crazy snowballing of interest and penalties that resulted in bills of $37,000, $50,000, and $68,000.

Samuel Veney, the owner of Philly Vegan, who was told by the city he owed $37,000 in penalties and interest, was eloquent and forceful at the City Council podium on February 12th. He implored Council not only to listen, but to hear what he way saying — he wanted to make sure they heard how he was missing time with his children and spending too much time dealing with the city’s screw-ups instead of working at his business. Said Veney:

What we are saying to y’all right now is to take the opportunity to make change happen. It shouldn’t have gotten this far and now that it has you actually have the opportunity to actually make change happen in a better way for our city. Continue reading

The Case for an RVA Meals Tax Amnesty

Richmond City Hall

by Jon Baliles

Today we are posting a special edition featuring an email from former restaurateur Brad Hemp that he recently sent to City Council about the meals tax fiasco you have probably heard about as a result of seven years of neglect at City Hall. The Mayor raised the meals tax in 2018 to help build new schools and pledged in return he would also help the restaurants. He raised the tax, and three schools were built, but he forgot about helping the restaurants.

Now, here we are, years later, and the only thing coming from City Hall are vacillating and daily changes and pledges to fix the problem on a “case-by-case” basis (in a vain attempt to get the media stories to stop). As someone who lived and breathed the restaurant business (and could teach the Mayor and Council a few things about it), Hemp has some suggestions to fix the mess. The question is, will the Mayor and City Council finally listen and do something?

The best government is almost always the one that listens. It makes it easier for people to enjoy their lives, better their neighborhoods, open or run a business, and have fun. The worst government is almost aways one that pretends to know everything and thus ignores listening to or helping the people by doing things like, just as an example, forcing through a second casino referendum right after the first one lost. Another way to demonstrate bad government is to find straw-man excuses for erroneous billing of residents for personal property, real estate and water, and misapplying payments of meals taxes for restaurants and never notifying anyone when a bill is late while interest and penalties skyrocket. The “leaders” at City Hall say it’s the fault of state code, or the postal service, or bad technology, or the current lunar cycle. Don’t look inward to see if it’s an internal problem, blame it on everyone and everything else. Continue reading

The Aggressive Progressive Democratic Agenda

From tiny acorns grow the mighty oaks of government.

By Steve Haner

The Democrats now running Virginia’s General Assembly are not just more progressive, but far more ambitious than their predecessors. To fully understand how ambitious you must compile the entire list of progressive bills advancing in the 2024 session and consider their total impact on the cost of living and cost of doing business in the commonwealth. Individual news stories miss the big picture.  

The push to radically regulate Virginia’s energy future discussed earlier is being mimicked with equally aggressive legislation throughout the rest of our economy. None of the ideas below are new, and most are already in law in places like California, New York or other more liberal states. What has changed is that when proposed in the past, they usually were rejected in Virginia on a bipartisan basis. Democrats now march in lockstep.  

The Assembly is still in its first phase and adjournment is set for early March. Which of the following will pass remains to be seen, and in many cases, amendments are already appearing. Most may also face gubernatorial veto or amendment, but that just underscores that Virginia is only one election of one official away from total transformation.   

In the case of the bills to increase the minimum wage (here and here), Democrats are simply building upon what they did during their last period of control. But if they succeed in setting future wage increases to automatically grow with inflation, the impact just builds and builds. Classes of employees reasonably exempted from the law currently, such as farm workers, may now be covered, as well.   

Likewise, the previous Democratic majority also took the first steps toward collective bargaining for limited groups of local employees, but only after elected local officials gave a green light to negotiate a contract. This year’s bill expands the right to bargain to almost all local and now most state employees, with no vote needed by a school board or city council. It was revealed that the most recent version does conveniently exempt employees of the General Assembly, however. Continue reading

Rent Control Legislation Passes House Committee

from Liberty Unyielding 

Legislation to allow rent control ordinances has passed a committee in Virginia’s House of Delegates. On a party-line, 11-to-9 vote. The Committee on Counties, Cities and Towns passed HB 721, which defines rent gouging to include raising rent to keep up with inflation, if inflation exceeds 7 percent.

This vote reflects the leftward movement of the Democratic Party. Rent control has historically been prohibited not merely in Republican states, but even in many Democratic states. Massachusetts, for example, banned rent control in a 1994 referendum, even as it was electing Democrats to nearly fourth-fifths of the seats in its state legislature, and even as it elected Democrats to eight of its ten seats in the U.S. House of Representatives. When Georgia still had a Democratic-controlled legislature and a Democratic governor, it banned rent control in 1984.

Yet, all Democrats on the committee voted for HB 721.

The legislation states that once a local government has adopted “anti-rent gouging provisions,” it “shall prohibit any rent increase … of more than the locality’s annual anti-rent gouging allowance,” defined as the “percentage increase in the Consumer Price Index...or seven percent, whichever is less.” So if inflation is 9% — as it was from March 2021 to March 2022 —  the landlord can only raise rent by 7%, at most. And the landlord might not be allowed any inflation adjustment at all, because under the legislation, a local government “may” — not must — “allow rent increases” to compensate for inflation.

So landlords will become poorer and poorer due to inflation under these “anti-rent gouging” ordinances. Continue reading

Congratulations, Virginia, You’re Now a High Tax State.

States with the highest state-local tax burdens in calendar year 2022.

As the debate plays out over Governor Glenn Youngkin’s tax restructuring plan, which includes $1 billion in tax relief over the next budget biennium, rest assured that the opposition party will attack it as a heartless attack on poor and marginalized Virginians with their illimitable unmet needs. In that context, it is worth remembering Virginia’s slow drift from a lower tax/high-growth state into a high tax/slower growth state over the past three decades, and asking if the higher taxes have made life any better.

According to the Tax Foundation, state and local taxes took 12.5% of Virginia’s net product in calendar year 2022 — the eighth-highest percentage among the 50 states. Within living memory, Virginia’s tax burden was in the second-to-bottom quintile. Today we’re in the top quintile. We’re now officially a high-tax state. Continue reading

Subsidizing a Billionaire

Ted Leonsis, owner of the Washington Wizards and Washington Capitals; Gov. Youngkin on left. Photo credit: Virginia Business

by Dick Hall-Sizemore

If approved by the General Assembly and the City of Alexandria, the deal reached between Gov. Glenn Youngkin and the owner of the Washington Wizards and the Washington Capitals for those teams to move from Washington, D.C. to the Potomac Yards site in Alexandria would constitute the largest public subsidy for a sports team in the nation’s history.  That is the conclusion of a report by JP Morgan commissioned by the state, a copy of which was obtained by The Washington Post.

The total estimated cost of the project is $2.2 billion.  The owner of the sports teams, Monumental Sports and Entertainment would contribute $403 million up front.  The City of Alexandria would be on the hook for $106 million.

The state would create a sports and entertainment authority which would own the land and the buildings and lease them to Monumental. The company would sign a 40-year lease with rent beginning at $29.5 million annually and increasing to $34.5 million.  In addition to the arena for the two sports teams, the project would include a concert hall, underground parking, a conference center, a Wizards practice center, and Monumental’s  corporate offices and media station. Continue reading

Deja Vu, All Over Again

by Dick Hall-Sizemore

Virginia is trying again to land a sports facility for a national professional sports team, The Washington Post reports. This time it is an arena for the Wizards of the National Basketball Association and the Capitals of the National Hockey League. Both teams have the same owner and are currently located in Washington, D.C.

The facility would be located in Potomac Yards in Alexandria. (If that name sounds familiar, that is where then-Gov. L. Douglas Wilder tried to lure the Washington Redskins football team 30 years ago.) According to the Post, the arena would anchor a “massive mixed-use development.” A stadium authority would own the facility and lease it to the company that owns the sports teams. There are no public details on potential costs yet. The owner of the Wizards and the Capitals would be expected to put up “hundreds of millions of dollars of its own money,” with the remainder being provided by the authority. The authority would sell bonds to raise the cash and use revenue from ticket sales, concessions, and parking to repay the bonds (theoretically).  Continue reading

Norfolk Hipsters & Lefties Try to Block a Military-Themed Brewery

by Kerry Dougherty

Now is the time. If you believe that cities ought to be open for business, regardless of the viewpoints of the business owners, if you support the military and don’t consider flag-waving a provocative act, you might want to let Norfolk’s City Council hear from you.

On December 12th it is scheduled to vote on the application of Armed Forces Brewery to open its doors on the same premises that housed O’Connor Brewing in the so-called Railroad District of Norfolk.

The business was lured to Virginia by Gov. Glenn Yougnkin who helped the founders secure tax incentives to open their craft brewery in Norfolk rather than in Florida. The owners have pledged that 70% of their employees will be veterans.

Normally, that would be seen as good news in this military town. Continue reading

Virginia Democrats’ Minimum Wage Bill Would Wipe Out Jobs, Especially During Recessions

from Liberty Unyielding 

The Democratic leaders in both houses of Virginia’s legislature have just introduced legislation that would raise the Virginia minimum wage from $12 to $15. The bill also retains provisions that make the minimum wage rise with inflation, while preventing it from ever falling due to deflation. As a result, it could rise further in real terms in the future. This minimum wage increase and further increases in the future could lead to a big spike in unemployment in the next recession.

In a deep recession, prices may fall due to deflation, resulting in a dollar of wages being worth more than it was before. If employers can’t adjust wages to match those falling prices, they may have to lay off many more of their employees, because employers cannot afford to pay rising real wages at a time when the demand for their product is shrinking due to the recession. As Jason Lennard noted in the European Review of Economic History, “In the ‘deflationary vortex’ of the 1930s… sticky nominal wages translated to rising real wages, which resulted in mass unemployment.” Moreover, “minimum wage legislation may have contributed to stickiness by preventing nominal wages from falling.”

Continue reading