Category Archives: Entitlements

How Discount Power For Poor Will Raise Your Bill

By Steve Haner

Virginia’s two major electric utilities estimate that as many as 150,000 of their poorest residential customers will see their monthly bills reduced next year using money extracted from all their other customers on their own power bills.

Appalachian Power Company projects about 30,000 of its low income customers will receive subsidies of $500-$600 per year. Dominion Energy Virginia projects bill subsidies to about 120,000 households of about $750 per year.

Both companies told the State Corporation Commission recently that to pay for this, about $1.12 will be added to the cost of every 1,000 kWh of electricity used by homes, businesses, and industries in Virginia. The cost per kWh is the same for all customer classes, and thus represents a larger percentage price increase for the commercial and industrial users.  Continue reading

Atlantic Coast Pipeline Necessity and the FERC

by James C. Sherlock

Peter Galuszka’s piece earlier today in this space made two claims the greens offer endlessly trying to achieve what I call truth by repeated assertion:

  1. The Federal Energy Regulatory Commission (FERC) either did not review or did not review properly (he inferred both) the wisdom and necessity for natural gas pipeline projects in general and the Atlantic Coast Pipeline (ACP) in particular.
  2. That if it had done so, the FERC would have discovered that there is no market for additional natural gas in the markets to which the pipelines would have brought it.

These claims appear from the usual sources every time any discussion of the ACP is had on this blog. They are both false. I hope this is the last time we will need to read about them.

Mr. Galuszka clearly did not understand the facts.

He wrote:

“So Dominion and its partners could make billions of dollars, some of it paid for by electricity ratepayers, for a project whose public need was always in doubt

and Continue reading

VEC: 1.5 Million Unemployment Claims In 2020

Virginia and US employment fluctuations since 2004, showing the dip in 2009-10 and plummet in the last four months. Source VEC. Click for larger view.

By Steve Haner

By the end of this amazing year, almost 1.5 million Virginians may have filed claims for unemployment insurance payments, leaving the state’s once-record unemployment trust fund balance of $1.5 billion reduced to $750 million in the red, legislators were told this morning.

That $2.25 billion swing is due to $2.6 billion spent out of the state fund, to cover basic unemployment benefits. To date, the federal government has supplemented that with another $6.3 billion paid to Virginian under special COVID-19 related benefits, which do not come out of the state trust account.  Continue reading

Advancing the Opportunity Agenda: Make 401(k)s More Portable

Robert L. Johnson on CNBC

by James A. Bacon

Robert L. Johnson, founder of the Black Entertainment Network and America’s first black billionaire, touted a proposal on CNBC this morning to help African-Americans — and, for that matter, all Americans — build wealth through their 401(k) plans. His proposal would make it easier for Americans to carry their employer-based retirement plans from one employer to another.

Sixty-three percent of African-Americans cash out their 401(k) plans when they move from job to job, said Johnson. With “auto-portability,” workers would not have to take any action for their 401(ks) to follow them. Often, owners of small accounts are given the option of cashing out. When they do, they pay various taxes and withdrawal penalties. People still would have the freedom to cash out if they really needed the money, but the administrative change would nudge them into keeping their funds intact and, thereby, boosting their savings.

African-Americans are more likely than other Americans to have small accounts that would be ported from one employer to the next. Over time, Johnson claims, his proposal would put approximately $191 billion dollars into the retirement savings of black Americans (and many billion into the savings of other Americans).

Here’s what I like about this proposal — it’s win-win. Auto-portability is a tool for helping African-Americans increase their net worth, but it’s not a carve-out or set-aside that creates a privileged racial status. Auto-portability would help all Americans with small 401(k) plans but African-Americans would benefit the most. Continue reading

WTJU Podcast: COVID-19 and the Economy

By Peter Galuszka

Here’s is the twice-monthly podcast produced by WTJU, the official radio station of the University of Virginia. With me on this podcast  are Nathan Moore, the station general manager, and Sarah Vogelsong, who covers, labor, energy and environmental issues across the state for the Virginia Mercury, a fairly new and highly regarded non-profit news outlet. Our topic is how Virginia is handling the economic fallout from the COVID-19 pandemic.

Right Wing Uses Virus To Stifle Needed Reforms

Statue of Gov. Harry F. Byrd on the state capitol grounds.

By Peter Galuszka

Right-wingers in Virginia have been apoplectic for months that Democrats finally captured the General Assembly after years of Republican control.

They also were enraged that the legislature this winter passed a number of reforms that would draw Virginia into the 21st Century such raising the minimum wage, boosting collective bargaining, tightening rules on carbon pollution and raising taxes for cigarettes, a deadly product.

Now such conservatives are using the COVID-19 pandemic as an excuse to throttle or delay such needed reforms. They have banded into groups such as the Coalition fort a Strong Virginia Economy. They have used the Virginia Municipal League’s complaints against the reforms, claiming they cost too much, as a way to derail new measures.

According to the left-leaning blog site Blue Virginia, one of the more extreme advocates for scrambling changes is Dave LaRock, a far-right Republican delegate from Loudoun County. A pronounced gay-basher, LaRock wants to squelch all of the reforms made by the more progressive General Assembly. Continue reading

A Look at Richmond and COVID-19

By Peter Galuszka

Here is a roundup story I wrote for Style Weekly that was published today that explains the effects of COVID-19 on the Richmond area. Hopefully, BR readers will find it of interest.

It was a tough piece to report. The impacts of the deadly virus are very complicated and multi-faceted. An especially hard part was trying to keep with the fast-changing news, notably the number of new cases and deaths. We were updating right up until the story closed Monday afternoon. It was hard to talk to people with social-distancing and closings.

The experience shows the delicate balancing act between taking tough measures to stem the contagion and keeping the economy going. My view is that tough measures are needed because without them, it will all be much worse, particularly more illness and death as the experience in Italy has shown.

Incredibly, our utterly incompetent president, Donald Trump, now wants to focus on the economy more than taking necessary containment steps. It’s far too soon for that. Regrettably, a number of Bacon’s Rebellion commenters are sounding the same irresponsible tune in keeping with their big business and anti-regulation laud of free market capitalism. Continue reading

The Ohio Energy Bill Subsidy Virginia Would Copy

Three of the six electric utilities charging customers to provide others with Ohio PIPP subsidies. Per 1,000 kWh the surcharge to customers is $3.19 for Toledo Edison, $3.34 for Ohio Edison and $2.37 for The Illuminating Company.

by Steve Haner

Both the Virginia House of Delegates and Senate have voted to increase the price of electricity to most Virginians in order to subsidize the bills of low-income utility customers. How much? They have no idea. But the program in Ohio being copied adds from $1 to $3.66 to the price of 1,000 kilowatt hours for those not subsidized.

The Virginia version is even borrowing the name and acronym from Ohio, the Percentage of Income Payment Program (PIPP). The charge in both is called a “universal service fee.” In 2020, the Ohio program will cost ratepayers $301 million to subsidize the power bills of about 275,000 low-income households. The Public Utility Commission of Ohio (PUCO) sets the amount charged in each utility’s service territory and the Ohio Development Services Area transfers the necessary funds to the various electricity providers.

The largest electricity provider in that state of 11.7 million people, Ohio Power, has the highest “adder” on its rates, $3.66 per 1,000 kilowatt hours used. That works out to $44 per year for a residential customer using exactly that amount monthly. A large industrial or commercial user would pay the same rate until monthly consumption hit 833,000 kilowatt hours, when a reduced rate kicks in on additional consumption. The first 833,000 kilowatt hours of usage in Ohio Power’s territory is hit with a $3,050 monthly surcharge.  Continue reading

No Basis for Governor’s Community College Claim

Enrollment trend at Reynolds Community College.

by James A. Bacon

Last month Governor Ralph Northam announced a plan to spend $145 million to make community college tuition-free for low- and middle-income students pursuing jobs in high-demand fields. As justification for this massive entitlement expansion, he cited numbers from Reynolds Community College showing that students who dropped out before completing their degrees “usually had earned a 3.1 grade point average when they left school.” The reason they left, he asserted, was not an inability to keep up academically but a lack of money.

In this post, I questioned the numbers. I didn’t dispute them, but I wanted to know more about where they came from and what caveats might apply before committing to a $145 million spending program. I promised to ask J. Sarge (as we Richmond old-timers still refer to the college) where the 3.1 GPA number came from and report back.

So, I have obtained the information, and now I’m reporting back. Bottom line: Northam got part of the story right, but he drew totally unwarranted conclusions from the data. The justification for the $145 million initiative has no empirical foundation basis.

Let’s see what the Governor said when announcing the program in his State of the Commonwealth speech, and then let’s see what the data is to support it. Continue reading

A Spending Boost We Won’t Object to: Medicaid Fraud Prevention

Participants in the REAL LIFE program.

by James A. Bacon

As legislators ponder the next two-year budget, which incorporates a $2.2 billion-per-year increase in spending (14%) in FY 2022 compared to the current fiscal year, they would do well to take into account a new Medicaid scam.

Medicaid covers expenses categorized as “mental health skill building.” These mental-health services are particularly valuable to the homeless, drug and alcohol addicts, and people coming out of incarceration. Since the enactment of Medicaid expansion, the number of agencies providing such services has increased significantly. And so have the fraudsters who have learned how to game the system.

‘We have seen mental health skill builders drive their clients to our Community Center, sit in the waiting room sometimes for two to three hours while waiting for us to deliver services; meanwhile they are billing Medicaid,” says Sarah Scarbrough, director of REAL LIFE, a nonprofit that serves marginalized populations. Continue reading

JLARC: Medicaid Jumps 19% In Expansion Year

Source: JLARC October 7 report on state spending over time, in this case a decade of sustained economic growth with no recession.

By Steve Haner

Every year, the Joint Legislative Audit and Review Commission issues a report looking at ten years of state spending, sliced and diced various ways. In recent years, the headline results have largely been surprisingly consistent and the 2019 report issued Monday fit the pattern. As seen before:

  • Medicaid program costs lead the charge, exploding almost 19% in one year due to the expansion that started January 1, 2019, even though the fiscal year was one-half over by then. It went from $10 billion to $11.9 billion. The average annual growth over the decade has exceeded 7% and $600 million.
  • Keeping up with Medicaid, and exceeding it in some categories, are the various forms of transportation spending. In the decade since the base year of the report, fiscal year 2010, Virginia has passed both statewide and regional transportation tax increases, and various toll projects have been completed – all flowing through the state’s books.
  • The third budget element that has seen major growth is higher education, with the vast majority of the new money coming from tuition, fees and auxiliary operations at the state schools, not state tax dollars. When all the schools are lumped together, their spending growth is right in line with the other two mega programs, and the higher education totals push past the growth in state funds transferred for local public schools. Local public schools don’t charge tuition and fees they can raise at will.
  • Virginia’s general economic performance lagged the national average for the entire decade, with average annual gross domestic product growth of 1.4% (versus 2.2% nationally), per capita income growth of 2.8% (versus 3.4% nationally) and labor force growth of 0.9% (versus 1.5% nationally.)  The GDP is adjusted for inflation.

Continue reading

Don’t Abandon Medicaid Work Requirement

Cover art from 2014 JLARC report on Virginia’s array of workforce training programs. Another state report notes almost 860,000 served in 2017.

By Steve Haner

To Republicans who supported the 2018 decision to expand Medicaid services to more Virginians – and encouraged yes votes from reluctant colleagues — the promise to couple those benefits with pathways toward gainful employment was a key reason. The compromise has worked in other states as well.  Continue reading

Medicaid Expansion Cost Still Off-Budget, Elusive

By Steve Haner

All the signs point to trouble. The next state budget, a two-year plan to be proposed in December, adopted by March and implemented in July, may be caught between stagnant revenue and soaring spending.  The spending charge will be led once again by Medicaid.

Just how much the decision to expand Medicaid will cost in the future remains elusive.

The state’s fiscal prospects were explained to the General Assembly’s money committees September 16 and 17 by Secretary of Finance Aubrey Layne.  The highlights are summarized in this article for the Thomas Jefferson Institute for Public Policy, using the image of a strand of worry beads.  The article is being distributed today.  Continue reading

Does the Left Have an Understandable Position on Immigration and How Much Does It Matter?

by Don Rippert

Debate: The debate on immigration in America continues to rage. People who hold right-of-center political beliefs seem to think that the U.S. immigration laws should be vigorously enforced. There may be some “wiggle room” on the right. For example, some conservatives believe there should be exceptions to deportation for those illegally in the United States so long as they have been here a fairly long time, paid taxes, stayed out of legal trouble, etc. Without commenting on the reasonableness of the conservative position, it is understandable.

The position held by Americans with left-of-center political beliefs is hard to fathom. While few liberals will openly say they are in favor of “open borders” the sum total of their beliefs seems to indicate that “open borders” is exactly what they seek.

This issue is important for Virginia because some areas of Virginia have very low numbers of foreign born residents, while other areas have very high numbers of foreign-born residents. For example, the 2010 Census found that 12.9% of people living in America were foreign born. Virginia had 11.4% of its residents recorded as being foreign born. However, Arlington County (Virginia’s 6th most populous county) had a foreign born percentage of 28% in 2000. Social services are affected by immigration. The cost of teaching English as a second language in public schools is directly impacted by the percentage of residents born in foreign (non English speaking) countries.

Author’s apology in advance – this is a long post. By far the longest I have ever published. However, this is a complex topic with both liberals and conservatives more than willing to misrepresent the data. I saw no way to properly handle the topic with brevity.

Continue reading

Unpaid Bills, Debt Collection, and Hospital Profits

Carlos Ortiz. Photo credit: Wall Street Journal

Carlos Ortiz underwent tests last year at Mary Washington Hospital in Fredericksburg for dizziness stemming from an inner-ear problem. When the 65-year-old uninsured gardener couldn’t pay his $15,000 bill, the nonprofit institution took him to court. Mary Washington was suing so many patients that day that the circuit court had cleared the docket to hear all the cases.

As it turns out nonprofit hospitals are more likely than for-profit hospitals to garnish patients’ wages to collect their bills, according to a study of Virginia hospitals published Tuesday in the Journal of the American Medical Association and reported upon by the Wall Street Journal. In 2017 Virginia nonprofits filed 20,000 lawsuits against patients for unpaid debt.

Remarkably, the study found, nonprofits are more likely than for-profits to file lawsuits against patients for unpaid debt. These numbers do raise fundamental questions about Virginia’s social compact with its nonprofit hospitals. But hasty judgments are not in order. Continue reading