Category Archives: Business and Economy

DePaul Hospital’s Closing Presents a Unique Opportunity for Hampton Roads

De Paul Medical Center Jan. 29, 2021. Photo Credit: James C. Sherlock

by James C. Sherlock

Not too long ago, before the decline of the malls and COVID, the healthcare community coined what they called the Nordstrom Rule.

The meaning was that if you wished to optimize profits in your healthcare business, build it close to a Nordstrom. The theory was that Nordstrom had already done the market research to identify concentrations of wealthy customers.

I wrote yesterday about the Sisters of Charity and Bon Secours, Catholic charities both. The Sisters were not in it to serve wealthy patients. They purposely located their hospitals among the poor. So 19th and 20th century of them.

Sentara, a more sophisticated public charity, avoids locations close to the poor.

In 1991, Sentara purchased the Humana Bayside Hospital in Virginia Beach, renaming it Sentara Bayside Hospital. That cleansed Virginia Beach of a competitor. But Bayside served Virginia Beach’s largest concentration of economically disadvantaged minorities. So Sentara closed it at the first opportunity.

The Virginia Department of Health brokered the closing of Bayside in 2008 under the cover of the Certificate of Public Need (COPN) process that fatally wounded DePaul, allowing Sentara to relocate the Bayside beds to the new Sentara Princess Anne, far from the minority citizens of Bayside.

The closest hospital for many residents served by Bayside was then, you guessed it, DePaul. No longer. Continue reading

PPP Tax May Focus on Larger Employers Only

by Steve Haner

A week ago, Governor Ralph Northam’s Administration was adamant that it would be unfair, in fact a double tax benefit, to allow Virginia employers with forgiven Paycheck Protection Plan loans to also deduct any expenses used to qualify for forgiveness.

This week, the position changed. Maybe it would make sense to allow it for some employers. Perhaps those employers could keep the first $100,000 from the grants free from tax. What was a firm assertion of fair tax policy is now a typical legislative horse trade, with smaller businesses considered “deserving” and larger businesses not.

Northam and his secretary of finance, Aubrey Layne, built the introduced state budget on a key assumption: Any Virginia employer that received some of the $12 billion in PPP money which flowed into Virginia, and had that loan forgiven, would be denied a tax deduction on the expenses which qualified it for forgiveness. (Mostly employers qualified by keeping employees on the job, so the deduction would be payroll dollars that supported them and their families.) Continue reading

Industrial Escape from Green Energy Costs Blocked

by Steve Haner

Virginia’s major energy-intensive industries will not get a requested path to avoid some of the coming cost shock from the 2020 Virginia Clean Economy Act (VCEA). The bill that sought them a lifeline was tied to an anvil and sunk in a House of Delegates subcommittee today.

It didn’t even help when the Virginia Manufacturing Association’s president mentioned that California is seeing the same problem for its manufacturers and is working on similar relief. Virginia companies were admonished that “they don’t want to pay their fair share,” a phrase used by opponents more than once. A Dominion Energy lobbyist said that about her best customers. Continue reading

Unintended Consequences of Minimum Wage Hikes

Credit: prescottenews

by James C. Sherlock

Sen. Louise Lucas, D-Portsmouth, and Del. Lashrecse Aird, D-Petersburg, contributed an op-ed titled Home health workers at risk without legislative action this morning in the Virginian-Pilot. They will be surprised to read that I agree with every word.

And that I would go farther.

Unintended consequences in the government economy

Lucas and Aird have authored a compelling, well-written narrative of the problems faced by home health workers and their employers under two Virginia programs that have not been reconciled:

  • the rise of the Virginia minimum wage from $7.25 an hour to $9.50 an hour, a 31% increase; and
  • the lack of a corresponding raise of the Medicaid reimbursement rate for home care workers.

As the legislators point out: Continue reading

Taxing the Money That Saved Virginia Jobs

By Steve Haner

Concern that Virginia is seeking to tax federal pandemic relief grants to Virginia businesses – grants which kept Virginians employed — is putting a normally routine tax administration bill in jeopardy.

The House Finance Committee on Monday approved the annual bill to bring Virginia tax law into conformity with the Internal Revenue Code effective December 31, 2020. But eight of 22 committee members voted no, and a similar division in the full House would kill the bill. The bill needs to go into effect immediately to be reflected on tax returns now being prepared, but that requires an 80% super majority.

The Thomas Jefferson Institute for Public Policy, joined by the National Federation of Independent Business and the Virginia Society of Certified Public Accounts, opposed one section of the bill in committee testimony (watch with the link). While Congress told businesses with PPP loans that they can deduct the wages and salaries they maintained to earn forgiveness of the loans, Virginia wants to disallow those costs as a deduction.

That effectively taxes the forgiven loan. Consider the following simple example. Continue reading

COVID Vaccine Distribution: What Can Virginia Learn from Florida?

Image used with permission of Coastal Cloud

Fiasco. From the start, Florida prioritized anybody 65 or older into its top tier for receiving the COVID vaccine. Virginia initially limited early access to the vaccine to those 75 and over. Last Thursday Gov Northam announced that Virginia would include people 65 and over in the current distribution of vaccines. That adds 9.5% of Virginia’s population, or 810,920 Virginians, to the “eligible now” list. What can Virginia learn from Florida about distributing the vaccines to a larger percentage of the population?

Florida’s initial efforts to distribute the COVID vaccine were widely described as a fiasco. Newspapers featured pictures of senior citizens in long lines waiting to get vaccinated. Just registering for a vaccination appointment was chaotic. Registration call centers were overwhelmed. CNN described the registration process as haphazard. If Florida is a benchmark … Virginia will soon enter the “chaos zone.” However, there is good news from Florida that could help Virginia. A Florida based technology company, Coastal Cloud, has started managing vaccine appointments using an application built on Salesforce.Com. I interviewed the husband-and-wife team that founded Coastal Cloud yesterday and they explained how their company is helping four counties in Florida get a handle on the scheduling of COVID vaccinations. Continue reading

Northam Again Targets Virginia Business Taxpayers

Finance Secretary Aubrey Layne. Photo credit: Daily News.

By Steve Haner

Washington giveth and Richmond taketh away. Once again, the Northam Administration wants Virginia to ignore business income tax changes made at the federal level because they would lower state revenue.

Governor Ralph Northam’s finance secretary was in front of the House Appropriations Committee Friday explaining the reasoning and complaining that new federal rules represent a double tax benefit for the affected businesses. “Not only is it expensive, it’s bad tax policy and it’s bad public policy,” Aubrey Layne, a certified public accountant, said at one point in the meeting.  Continue reading

Employer COVID Mandates Might Outlive Pandemic

by Steve Haner

Virginia’s emergency temporary workplace standards on COVID-19 are one step closer to becoming permanent, over the continuing loud objections from employers that they are duplicative, expensive, and not making anybody any safer than existing health and safety protections already do.

UPDATE:  The text of the final permanent standard approved Wednesday was finally posted publicly Jan. 15.    Continue reading

Recreational Marijuana Soon to Be De-Facto Legal in Northern Virginia

Photo credit: Rip Dog Photography

by DJ Rippert

Elections have consequences. The recent presidential election along with the Georgia run-off election has secured Democratic control of Congress with no serious risk of presidential veto. Meanwhile, Washington, D.C., has tried for years to establish a recreational marijuana marketplace only to be thwarted by Republicans in Congress. Finally, in the 2020 session Virginia’s General Assembly passed legislation that made the possession of small amounts of marijuana punishable by a fine so low that it could hardly be compared to a parking ticket ($25). This combination of events will soon have Northern Virginians buying marijuana in D.C. and bringing the weed back to the Old Dominion to consume. D.C. will profit while Virginia gets nothing. Continue reading

Can “Medium” Save Local Journalism?

Image by kalhh from Pixabay

By DJ Rippert

The medium is the message. Medium is an online publishing website founded by Evan Williams — who also co-founded Blogger and Twitter. The genre of Medium is sometimes called social journalism. As described in Wikipedia, social journalism “relies on community involvement, audience engagement, social newsgathering and verification, data and analytics, and relationship-building.” That’s all true. However, the biggest point is that authors get paid to write for Medium. Medium generates revenue by selling subscriptions at $5 per month. People who buy those subscriptions are called “members.” Members are eligible to enroll in Medium’s partner program. People in that program are eligible to earn money based on the level of engagement the author’s stories get from other members. While Medium keeps its payment algorithms secret most members believe that the amount paid is calculated based on the number of members who read the story and how long they spend reading it. In some ways Medium could be considered Uber for writers. It facilitates easy paid participation in the gig economy of writing. Continue reading

Mark Zuckerberg, Call Your Lawyer

by James C. Sherlock

“You don’t need a Weatherman To know which way the wind blows.” — Bob Dylan, Subterranean Homesick Blues.

Consider this:

“Facebook was hit with twin lawsuits by the Federal Trade Commission and attorneys general from dozens of states on Wednesday, in one of the most serious challenges ever to the Silicon Valley giant. The cases could potentially result in Facebook being broken up.

Here’s what you need to know.

The FTC and the states accuse Facebook of abusing its dominance in the digital marketplace and engaging in anti-competitive behavior.

“Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition,” Ian Conner, Director of the FTC’s Bureau of Competition, said in a statement. “Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”

And that story was dated Dec. 11, 2020. 

Maybe last week was not the best time for Facebook to kick that hornets’ nest with another potential antitrust violation. Continue reading

WTJU Podcast on State’s Economy

By Peter Galuszka

This may be familiar turf for some readers, but here is a podcast I worked on with WTJU, the radio station of the University of Virginia. It gives a larger overview of the changes that data centers are making in the state’s economy and what that might mean in the future.

This elaborates on a Style Weekly story I posted here a few weeks ago.

Early this year, WTJU started preparing a series of podcasts under the “Bold Dominion” banner that explores how politics, economics and culture are changing in the Old Dominion. I think they have had 25 episodes up until now and I have participated in some of them. I also do a weekly Q&A on state politics.

Here’s the most recent podcast:

https://bolddominion.org/episodes/what-does-a-burgeoning-tech-industry-mean-for-virginia

Richmond’s Infamous Icon

Credit: National Geographic

By Peter Galuszka

Since 1890, the Robert E. Lee Monument has dominated Richmond’s grand Monument Avenue and has stood as a striking protector of the state’s long history of systemic racism.

True, other Confederate heroes such as Thomas “Stonewall” Jackson and J.E.B. Stuart also found a memorial spot on the Avenue but Lee has always been the main one. He has been a sentimental touchstone for romantics of the Lost Cause and of derision about people hurt by the system.

Now, Richmond and Virginia are paying a price for more than a century of refusing to own up to what it all really meant.

The famed National Geographic magazine has made a cover photo of the defaced Lee statue repurposed as a memorial to George Floyd, the Black man who was killed by police after he was arrested and handcuffed.

The Geographic was listing the top photos of 2020, a wild and depressing year that brought the coronavirus pandemic, riots in cities and the constant chaos of Donald Trump.

That’s not all. In October, The New York Times Magazine proclaimed that the defaced Lee monument was the most influential work of art since World War II. Continue reading

Does a $9 Billion Carbon Tax Get Your Attention?

by Steve Haner

The 2021 General Assembly is now six weeks away, with the holidays in between.  We know no more about the coming Northam Administration proposal to impose a carbon tax and rationing scheme on our motor fuels than we did months ago. Keeping you uninformed may be part of the plan.

All we have is the Transportation and Climate Initiative organization’s own data and modeling, which are quite extensive.

The initial added tax per gallon of gasoline in Virginia could range from 17.5 cents to 28 cents per gallon, depending on which of the 25% reduction scenarios the still-unseen TCI memorandum of understanding uses. By 2032 the tax could range between 36 cents and 57 cents per gallon, TCI projects.  Continue reading

The Lies in “Hillbilly Elegy”

By Peter Galuszka

A 2016 memoir by J.D. Vance, a former Ohio resident, drew praise from conservatives for its laud of self-reliance and disciple and criticism from others for its long string of debunked clichés about people from the Central Appalachians.

The book, Hillbilly Elegy: A Memoir of a Family and Culture in Crisis,” was held up as being a great explainer as to why so many in the White lower classes voted for Trump.

Vance exalts the strength of self-discipline, family values and hard work. He complains that when he worked as a store clerk he resented it when people on welfare had cell phones but Vance couldn’t afford one. He ended up going to Yale Law School.

Vance also spends a lot of time complaining about his dysfunctional family including a nasty grandmother, a mother constantly stoned on alcohol and opioids and lots of divorce – in other words the “social rot” of the hillbilly lifestyle he so disdains.

His tie to Appalachia is a bit thin. He grew up in a suburb of Cincinnati but spent summers in Jackson in the mountains of East Kentucky.

Now director and child actor Ron Howard has made a feel-good movie from the book that stars Glenn Close and Amy Adams. It is getting lousy reviews. Continue reading