Category Archives: Finance (government)

Williamsburg the Locality Most Vulnerable to COVID-19

Composite Local Vulnerability Index. Source: “Report on Local Vulnerability Analysis.” Click for larger image.

The City of Williamsburg is the Virginia locality most vulnerable to the stresses imposed by the COVID-19 epidemic on local governments, according to a report recently issued by Virginia’s Commission on Local Government. Other small cities — Emporia, Colonial Heights, and Norton — follow close behind on the list.

The Commission based its assessment on three sets of data. The first is the Fiscal Stress Index, which the state already maintains to measure the taxing capacity of local governments and the “effort” they expend in terms of taxes levied. Commission analysts also considered each locality’s dependence upon revenue sources most immediately impacted by the virus: local sales taxes, transient occupancy taxes on hotels, and meals taxes. Thirdly, they used an analysis of job loss vulnerability produced by Chmura Economics & Analytics based on a region’s mix of industries. 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

Gerald Smith: Richmond’s New Top Cop

By Peter Galuszka

FYI, here’s a piece I did for Style Weekly about Richmond’s new p0lice chief, the third in about a month, and his interpretation on the problems of law enforcement in this period of defunding.

The Revenue Picture is Bad, But Not as Bad as Expected

By Dick Hall-Sizemore

The state’s May revenue report has been released today.   As one would have expected, the May 2020 general fund (GF) revenues were down significantly from May 2019 and the year-to-date GF revenues are running behind the annual forecast.

However, on the somewhat bright side, the administration is now saying that it expects the decline in GF revenue for the fiscal year to be less than previously predicted.  In last month’s report, Secretary of Finance Aubrey Layne predicted that the shortfall in FY 2020 GF revenue would be $1 billion.  Now, he anticipates that “fiscal year 2020 revenue collections will be less than $ 1 billion below the official forecast.”   Layne told the Richmond Times-Dispatch that total GF revenues for the year were down about $800 million and he expected that the state would make some of that up in June.  He summarized by saying, “We’re going to end the fiscal year in a better position than being $1 billion down. I don’t know how much it’s going to be, but the good news is what we have projected and told people — we’re going to be well within that.” Continue reading

Racism, COVID19 and Marijuana Legalization in Virginia

By DJ Rippert

Unintended consequences.  Newspapers, websites and Bacon’s Rebellion have been full of articles describing and debating the COVID-19 pandemic and the police killing of George Floyd with the attendant protests. First-order consequences of these events have been widely discussed. However, as we enter into the “new normal” a number of secondary and tertiary questions arise. One such question pertains to the legalization of recreational marijuana in Virginia. My opinion is that both the COVID-19 pandemic’s economic fallout and the new sense of urgency around racial justice should compel our state government to accelerate the legalization of adult use marijuana.

The COVID19 lockdown recession. The sudden stop to Virginia’s economy has resulted in predictable fiscal turmoil. While one can debate whether the lockdown was too restrictive, not sufficiently restrictive, too long or too short there can be no debate that closing large parts of the economy has caused deep financial issues. The US economy is in recession. Some will say that Virginia will be insulated from the worst of that recession by the flow of federal dollars through the state. To that I’d reply – “don’t be naive, Nancy” … stories of the impact on small businesses are being reported across the state. It should be obvious to everybody that Virginia faces a fiscal winter even if there is no second wave of Coronavirus this actual winter. Continue reading

Remember Petersburg!

Robert Bobb, of the Robert Bobb Group, functioned as Petersburg’s de facto CFO for a year or more. He was tough, but he got the city’s books straightened out.

by James A. Bacon

Two weeks ago, the U.S. House of Representatives passed a $3 trillion coronavirus-relief bill that would direct nearly $1 trillion to state, local and tribal governments. This massive bail-out would come on top of massive assistance to states and localities in previous legislation: $150 for a Coronavirus Relief Fund, $30 billion for an Education Stabilization Fund, $45 billion for the disaster Relief Fund, $25 billion for public transit systems, an increase in the federal government share of Medicaid spending, and billions more for miscellaneous programs. Also the Federal Reserve Bank has set up a $500 billion program to facilitate short-term state and local borrowing.

The ball is now in the U.S. Senate’s court. What, if anything, will the Senate propose in the way of a second wave of fiscal assistance? Judging from their press releases, Virginia Senators Mark Warner and Tim Kaine have so far refrained from committing themselves to a Pelosi-style bail-out of the states. Their statements have focused on narrow-bore initiatives for water improvement projects, National Guard benefits, and a restaurant meals program for Americans struggling with food security.

Sooner or later, however, they may be called upon to either support or oppose a second-wave bailout. They will receive intense pressure from their Democratic Party colleagues representing the states — Illinois, New Jersey, New York, Connecticut — in most desperate need of fiscal rescue. When they do so, I hope that that the two former governors will remember the hard choices they made to keep Virginia’s fiscal house in order, and, similarly, how the McAuliffe administration forced the City of Petersburg, when faced with fiscal collapse, to make hard, hard choices to put its finances in order. Continue reading

Juggling the Revenue

By Dick Hall-Sizemore

Jim Bacon mentioned in an earlier post that the state’s revenues for April were $700 million less than in April of last year.  I was surprised that there were no cries of outrage from readers and dire warnings of the state running a budget deficit. I was also surprised that I did not detect any signs of panic on the part of the administration.

After I dug into the details and thought about them for a while, I realized that, for reasons to be set out later, the state is in position to finish this fiscal year in the black. It is next year that has the administration worried.

Total general fund revenues for April 2020 were 26% lower than those for April 2019, leading to the $700 million decrease. Although total General Fund (GF) revenue year-to-date was higher (1.4%) than the comparable period in FY 2019, 3.1% growth for the year is needed to meet the forecast. In summary, the state revenue growth rate through April was less than half what was needed to meet the forecast. Continue reading

Hidden, Spaced Out, Higher Taxes Coming

The green areas are regional transportation districts where additional fuel taxes are already being collected, 7.6 cents per gallon on gasoline and 7.7 cents per gallon on diesel. Effective July 1 those regional fuel taxes will be imposed in all the other Virginia localities. In combination with the 5 cent per gallon increase in the statewide gasoline tax, the total tax on fuel goes to 28.8 cents on gasoline and 27.9 cents on diesel.

By Steve Haner

First published this morning by the Thomas Jefferson Institute for Public Policy.

The 2020 General Assembly, with its new progressive Democratic majority, passed a host of changes in Virginia tax laws that will begin to hit individuals and businesses in a few weeks on July 1.  Because of the COVID-19 economic shutdown, a few amendments were made to the implementation schedule during the reconvened session on April 22, but no tax increase was repealed.

This is a follow up on an earlier report on the sixteen tax bills that passed the regular session. Most are taxes will be buried almost invisibly in various transactions, and their phased imposition will also keep many taxpayers from noticing them.

July 1, 2020

The statewide tax on gasoline increases from 16.2 cents per gallon to 21.2 cents per gallon (a 31% increase) and is no longer tied going forward to the rise or fall of wholesale cost.  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.

Screwing Workers On Safety and Liability

A GRTC bus driver in better times

By Peter Galuszka

At 4:30 a.m. on April 27, about 100 workers of the Greater Richmond Transit Company — half of the total – failed to show up for work.

Worried about the health of its membership, Local 1220 of the International Amalgamated Transit Union demanded additional safety measures such as full personal protection equipment, time and a half hazardous pay, limits on the numbers of passenger and testing.

GRTC management threatened to fire workers who stayed away from work but agreed to talk. A resolution may come at a May 19 board meeting.

Indeed, stories are showing up throughout Virginia and across the country as workers most likely to be exposed to COVID-19 often have the least protection and no guarantees their employers will provide testing, hospitalization and sick pay.

In Timberville near Harrisonburg, workers at a Pilgrim’s Pride poultry plant worry that they are required to work at less than six feet –- considered safe distancing –- from each other. In Norfolk, non-union workers at a General Dynamics ship facility were required to do electrical work until they refused, citing exposure threats and a death. Continue reading

Why Northam Is Such An Important Governor

By Peter Galuszka

This is a bit like throwing chum at a school of sharks, but here is my latest in Style Weekly.

I wrote an assessment of Gov. Ralph Northam that is overall, quite positive. My take goes against much of the sentiment of other contributors on this blog.

They are entitled to their views but, to be honest, I find some of the essays shrill and not really fact based. If Northam wants to delay elective surgeries at hospitals for a week or so, some want to empanel a grand jury.

An acute care health facility in Henrico County becomes one of the most notorious hot spots for coronavirus deaths and it is immediately Northam’s fault even though the care center has had serious problems that long predated the governor’s term in office.

He’s a trained physician who served as an Army doctor in combat during the Iraq War yet he is vilified as being incompetent and incapable of understanding the COVID-19 pandemic.

It’s like the constant repetition of the “Sins of Hillary” on Breitbart and Fox News about emails and Benghazi.

Like him or not, Northam is bound to be one of the most consequential governors in Virginia history given the gigantic problem of the pandemic. He’s not a showboat salesman like Terry McAuliffe nor a smarmy, small-time crook like Robert F. McDonnell.

Anyway, here’s the piece.

Despite Offered Delays, Pay Your Taxes On Time

By Steve Haner

The latest complaint against the Northam Administration’s response to the COVID-19 pandemic is failing to provide adequate state tax relief. The complaint comes from the Tax Foundation and surfaced in a news report in Wednesday’s Fredericksburg Free Lance-Star.  The Richmond Times-Dispatch has now chimed in with an editorial.

Apparently most other states have matched the new (and temporary) federal income tax filing deadline of July 15 rather than April 15. Virginia has delayed the deadline for paying any taxes still owed for 2019 from May 1 to June 1. But the 2019 income tax returns are still due on May 1, and the common complaint is that since Virginia taxes are based on your federal adjusted gross income, you need to know your federal AGI figure to file.

“Virginia has done the least to help taxpayers with delayed filings or delayed payments than any other state,” said Jared Walczak, director of state tax policy with the Tax Foundation.

Walczak said although Virginia requires that state tax returns be filed by May 1, the payment deadline has been extended until June 1. But even with an extension on tax payments, Walczak said interest starts to accrue on the amount you owe.

“Virginia is the only state in the nation that is doing that,” said Walczak. “Everywhere else, there is at least some relief on both filing and payment deadlines.”

Continue reading

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

Thank God for Medicaid Expansion

By Peter Galuszka

For years after the Affordable Care Act, “Obamacare,” made millions of federal dollars available for states to expand Medicaid health coverage, Virginia Republicans steadfastly blocked Virginia from using the money.

Led by former House Speaker Bill Howell and Sen. Tommy Norment, the GOP claimed that expanding Medicaid to nearly 400,000 people would be too expensive and would blow out state funding.

This skinflint approach was finally put to rest after Democrat Ralph Northam became governor in 2018, foreshadowing a Democratic sweep of the General Assembly in elections last year.

Thank God the Democrats prevailed.

Virginia’s formerly robust economy has been shattered by the COVID 19 pandemic. Last week, some 110,000 Virginians filed for unemployment support. It was 46,277 the week before.

Who covers them is an open question but many would qualify for Medicaid. Expansion has boosted lower-income Virginians so that they may be able to better ride out the pandemic. Continue reading

“We Are All Keynesians Now”

John Maynard Keynes

By Peter Galuszka

John Maynard Keynes, the British economist, advocated government spending and monetary intervention as suitable for modern economies.

When I was a student at a liberal college in New England in the early 1970s, we were taught that Keynes very much had the right idea. As evidence, we had the Great Society programs of Lyndon B. Johnson and, strangely, the Vietnam War. They all relied on vast amounts of deficit public spending.

Since then, free-market types came into favorable light and it all became the magic of the market, little regulation and other panaceas.

According to whom you read, pro-capitalism economist Milton Friedman admitted the necessity of Keynes’ thinking by stating, “We’re all Keynesians now.” President Richard Nixon, a Republican, is also credited with the quote when he took the U.S. off the gold standard.

The phrase is taking on increasing relevance with the COVID-19 pandemic. Virginia is no exception. Continue reading