Category Archives: Finance (government)

May Day Brings Virginia’s Labor Revolution

Posted on April 1, 2021 by | 24 comments

“Liberty Leading the People,” Eugene Delacroix.

by Steve Haner

Four major changes in Virginia’s labor laws delayed at the beginning of the COVID-19 recession will all take effect May 1. All were approved by the 2020 General Assembly once Democrats controlled both legislative chambers and then delayed at the 2020 Veto Session. May Day 2021 is almost here.

Minimum Wage. The 31% increase in the state’s minimum wage, from $7.25 to $9.50 per hour, will have the broadest impact. House Bill 395 and Senate Bill 7 also raised the hourly minimum wage to $11 eight months later, on January 1, 2022, and to $12 a year later on January 1, 2023.

The bills outline two further increases, which go into effect only if the Assembly votes for them again: To $13.50 per hour in 2025 and then the often-touted $15 per hour in 2026 (by which time that will be considered inadequate.) From there the rate will automatically adjust upward annually for inflation, a consideration never offered to taxpayers when inflation raises their taxes. Continue reading →

24 Comments

Posted in Elections, Finance (government), General Assembly, Government Oversight, Government workers and pensions, Labor & workforce, Taxes, Unions

Tagged

Virginia Will Mandate and Hold Retirement Savings

Posted on March 31, 2021 by | 31 comments

Click here for more information on the California state-run retirement fund that inspired the Virginia legislation. Source:  Georgetown Center for Retirement Incentives.

by Steve Haner

Next week’s reconvened General Assembly session will decide whether only full time employees of Virginia’s small businesses will be pushed into a new state-sponsored retirement savings plan, or part-time workers will join them there.

The big question is whether this is something the state should be doing at all, but on that the Assembly has spoken. People who are not covered by an employer-sponsored retirement plan will be forced to send money to a state “Virginia Saves” account unless they take explicit steps to opt out.

Governor Ralph Northam’s amendment to expand House Bill 2174 will be voted on by legislators at the reconvened session April 7 and must be approved by both chambers. If rejected, he could then veto the bill, but that seems unlikely. More likely is that efforts to expand the program will continue in future sessions, as the sapling grows into a mighty oak.

The bill as introduced in the House of Delegates covered all workers but passed the Senate limited to employees with 30 or more hours per week. Increasing coverage to part-time employees greatly expands the pool of covered workers. It also greatly expands the pool of covered businesses, since to be drawn into the state-managed retirement mandate they need 25 eligible employees.  Continue reading →

31 Comments

Posted in Business and Economy, Finance (government), General Assembly, Labor & workforce, Poverty & income gap

Tagged

Unthinkable–a Tax Decrease!

Posted on March 28, 2021 by | 20 comments

Patrick Duhaney,City Manager, Virginia Beach

By Dick Hall-Sizemore

According to a report in the Virginian –Pilot, the city manager of Virginia Beach will be recommending that city council reduce the city’s real estate tax rate. He is also recommending that the city delay a previously approved storm-water fee increase.

Last year, the city cut $67 million out of its operating budget in anticipation of COVID-19’s impact on the economy. The impact was not as bad as anticipated and revenues have stabilized. Even with the proposed cut in the real estate tax rate and the delay in the storm-water fee, resulting in a loss of about $9.3 million, the manager projected enough revenue in the budget to recommend 3% salary increases for city employees and the approval of 54 new positions, primarily firefighters and emergency responders.

The fiscal condition of the city of Virginia Beach is not typical of that of other Virginia local governments and there are probably few, if any, others who could afford to take these steps. However, the city is an example for most of the contributors and commenters of Bacon’s Rebellion that governments are not always trying to get as much out of the taxpayers as they can.

20 Comments

Posted in Finance (government), Taxes

Tagged

The Business and Politics of Senior Care in Virginia

Posted on March 24, 2021 by | 2 comments

by James C. Sherlock

We write here often about senior care, the companies that provide it and the politics around that business.

It is useful to understand the continuum of care to make sure we also understand the different financial situations which companies in different parts of that industry find themselves and the way they are overseen and paid in Virginia.

The larger corporations that offer these services often offer both facility and in-home care.

The basic descriptions below are offered for considering the business interests and therefore the lobbying efforts of the companies that provide the services. They are not meant for personal counseling. Continue reading →

2 Comments

Posted in Finance (government), Government Oversight, Health Care, Insurance, Long Term Care and Nursing Homes

Tagged

Virginians’ Money and Our Tax-Exempt “Public Charity” Healthcare Monopolies

Posted on March 21, 2021 by | 18 comments

The Business of Healthcare

by James C. Sherlock

A generally accepted rule of thumb for the minimum profitability required for a hospital to maintain operations and fund its future is 3%.

Virginia’s community hospitals as a group in 2019 had an operating margin of 10%. Most of them are filed with federal and state governments as not-for-profit public charities and are untaxed at any level of government.

I yesterday wrote a  column that disclosed 34% increases in the 2019 profitability of Virginia hospitals that were generated by taxpayer funds sent directly to the hospitals through Medicaid expansion and increases in Medicaid payments passed by the General Assembly in 2018.

There were several good reasons for Medicaid expansion. Better access for the poor. Financial stability for rural hospitals. I was for Medicaid expansion myself, and Republican votes put it over the top. Continue reading →

18 Comments

Posted in Charity, Courts and law, Finance (government), General Assembly, Health Care, Political Influence, Taxes

Tagged

Podcast: How the General Assembly Has Changed

Posted on March 18, 2021 by | Leave a comment

By Peter Galuszka

I haven’t contributed much to BR lately since I am slammed with non-Virginia work. I did manage to help out on a Podcast about how the General Assembly has changed the state over the last two years as Democrats have gained power.

This Podcast is produced by WTJU, the University of Virginia radio station. I do a weekly talk show on state politics and economics and, on occasion, work on Podcasts.

Joining me is Sally Hudson, a delegate from the Charlottesville area. She is Assistant Professor of Public Policy, Education and Economics. Sally studied at the Massachusetts Institute of Technology and Stanford and is one of the youngest members of the General Assembly.

I hope you enjoy it.

Leave a comment

Posted in Agriculture & forestry, Blogs and blog administration, Budgets, Business and Economy, Consumer protection, Courts and law, Demographics, Economic development, Energy, Entrepreneurialism, Environment, Finance (government), General Assembly, Health Care, Housing, Immigration, Individual rights, Infrastructure, Labor & workforce, Land use & development, Politics, Poverty & income gap, Property rights, Public safety & health, Race

Analysis of State Use of Federal COVID Funds

Posted on March 7, 2021 by | 30 comments

Design credit: Atlantic Cape Community College

By Dick Hall-Sizemore

(Note:  All of the data presented in this post is based on the author’s analysis of raw expenditure data from the state’s accounting system (CARDINAL) for FY 2020 and FY 2021 through 2/22/2021.)

As of February 22, state agencies had spent or disbursed $11.9 billion in federal COVID funds.

Two major categories of expenditures accounted for about 86 percent of that total.  The Virginia Employment Commission had paid out $8.8 billion in unemployment claims.  Secondly, in accordance with federal law, the state had transferred $1.4 billion to local governments.  The remaining $1.7 billion was spent directly by state agencies or disbursed by them as grants to local or regional government agencies or to private entities. Continue reading →

30 Comments

Posted in Budgets, Finance (government)

Tagged ,

You Thought Payday Lenders Were Bad? Welcome to Internet Lending.

Posted on March 4, 2021 by | 29 comments

by James A. Bacon

A new law that went into effect this year is designed to protect Virginians against “predatory” short-term loans by limiting what lenders can charge. And in honor of National Consumer Protection Week, Attorney General Mark R. Herring is encouraging Virginians to familiarize themselves with the risks associated with smaller-dollar loans.

I’m all in favor of educating consumers, and I’m glad to see that the AG’s office is vigilant against fraudulent lending. But I can’t escape the worry that the political class’s do-gooder instinct to “help” poor people by regulating one of the few industry sectors willing to lend them money may do them more harm than good. Regulating payday lenders pushes poor people into the arms of online lenders.

In a press release today, the AG’s Office reported some interesting numbers regarding the scope of payday lending. Citing data from the 2019 Annual Report of the Bureau of Financial Institutions, the press release notes that 83,107 Virginians took out 268,097 payday loans totaling nearly $110 million with an average annual percentage rate of 253%. Continue reading →

29 Comments

Posted in Finance (government), Poverty & income gap, Regulation

Tagged

Help for Small Businesses–One State Use of CARES Funding

Posted on February 22, 2021 by | 12 comments

By Dick Hall-Sizemore

I owe the Dept. of Small Business and Supply Diversity (DSBSD) an apology. In an earlier post, I questioned whether the agency would be able to quickly distribute $120 million in grant funds. It turns out that its first checks went out in mid-August and it had to stop accepting applications on Dec. 9 because the amount of money designated for the program had been exhausted.

The program is called Rebuild VA. Approved applicants received awards of three times their average monthly recurring eligible operating expenses plus COVID-related expenses, up to a maximum grant of $100,000. To be eligible for an award, an applicant could be a corporation, pass-through entity, nonprofit organization, recognized tribe, sole proprietor, or individual contractor who met the following criteria:

  • Principal place of business in Virginia
  • 250 or fewer full-time employees
  • Operating prior to 3/12/2020
  • Currently in good standing with State Corporation Commission (if applicable), and
  • Engaged in legal activity.

Continue reading →

12 Comments

Posted in Business and Economy, Finance (government)

Tagged ,

More Money, Same Level of Service

Posted on February 21, 2021 by | 253 comments

Photo Credit: Richmond Times Dispatch

By Dick Hall-Sizemore

There are often cries of anguish or outrage on this blog and elsewhere over the increases in spending proposed in budget proposals and then authorized by the General Assembly. Some of this criticism of increased spending is justified, but, sometimes, the increase is the result of circumstances beyond an agency’s control. Sometimes, stuff just costs more.

Replacing State Police cruisers is a good example of this quandary. For many years, the State Police used the Ford Crown Victoria Police Interceptor. When Ford stopped production of that model in 2011, the State Police began using the Ford Taurus Police Interceptor.  (It took me a little while to get used to seeing the State Police in those smaller cars.) Next, Ford discontinued production of the Taurus in 2019. After testing Dodge and Chevrolet vehicles as potential replacements, the State Police selected the Ford Police Interceptor Utility. (This is a modified SUV and it explains why I have been seeing local police driving SUVs, which was a little disconcerting.) Continue reading →

253 Comments

Posted in Budgets, Crime , corrections and law enforcement, Finance (government), General Assembly

Tagged

A Really Sweet Valentine

Posted on February 19, 2021 by | 40 comments

Photo Credit: WHSV

By Dick Hall-Sizemore

Governor Northam recently gave the budget conferees a $730 million Valentine.

Based on January’s revenue report and year-to-date collections, the Governor has revised the general fund forecast to include an additional $410 million in FY 2021 and $320 million in FY 2022.

The main factor leading to the increase was the unanticipated growth in sales tax revenues. Overall, the General Fund revenues through January grew by 6.0% over the same period a year ago. By comparison, the current budget is based on an estimated annual General Fund revenue growth of 1.2%.  The Governor’s letter to the money committees is here; a Power Point summation of the forecast increase is here; and the detailed January revenue report is here. Continue reading →

40 Comments

Posted in Budgets, Finance (government), General Assembly

Tagged

The Latest Federal COVID Money Pot

Posted on February 13, 2021 by | 51 comments

Illustration credit: YouTube

By Dick Hall-Sizemore

The federal COVID money keeps rolling into the Commonwealth.

According to the Secretary of Finance, as of January 13, it was estimated that the state would receive $2.4 billion from the stimulus bill passed by Congress in late December (the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA)).

Unlike the earlier COVID stimulus money (CRF from the CARES Act), the December federal legislation provided less flexibility with this pot of money, directing it to specific agencies and purposes.

K-12 education gets the biggest share. The estimates for Virginia are:

  • Governor’s Emergency Education Relief (GEER) Fund—Flexible—$30.0 million
  • GEER Fund—Private Schools–$46.6 million
  • K-12 Fund–$939.3 million.

Continue reading →

51 Comments

Posted in Budgets, Finance (government)

Tagged ,

How the CARES Funding is Being Allocated

Posted on February 10, 2021 by | 44 comments

Design credit: Atlantic Cape Community College

By Dick Hall-Sizemore

Upon Jim Bacon’s suggestion, Jim Sherlock and I have taken on the task of looking closer at the federal COVID money that is coming the Commonwealth’s way and trying to discern how it is being spent.  Unfortunately, this is not an analysis one finds in the general news media.

We have taken different approaches, perhaps reflective of our different backgrounds.  Jim has started with the federal programs and their components and requirements, along with the amounts of funding allocated to Virginia. I am looking at how the federal  pot is being split up among state agencies, as reflected in the state budget.  Later, I hope to examine how some of those agencies are spending the money. Continue reading →

44 Comments

Posted in Budgets, Finance (government), Public safety & health

Tagged ,

Senate Taxes Less PPP, House Bill Almost All

Posted on February 9, 2021 by | 21 comments

by Steve Haner

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

Majorities in both chambers of the Virginia General Assembly agree with Governor Ralph Northam and have voted to tax the federal Payroll Protection Plan grants that saved Virginia jobs in the pandemic. They only remain at odds over how much to tax.

The Virginia Senate has passed a bill 39-0 that allows employers, who used the money to maintain their workforce, to exempt the first $100,000 of their PPP grant from 2020. The rest is taxed. The bipartisan compromise allowed the bill to pass with the emergency clause it needs to go into effect immediately upon approval, in time for this tax filing season.

The average Virginia PPP grant was about $107,000, state officials reported. More than 20,000 employers would still see some taxes on their grants under the Senate bill. This state and its localities have received multiple billions of dollars of direct federal funding during the COVID pandemic, with more on the way, yet Governor Northam also wants to skim 6% off the top of what Virginia employers received.

It is that simple. Continue reading →

21 Comments

Posted in Budgets, Business and Economy, Finance (government), General Assembly, Taxes

Tagged

Federal COVID Funding to Virginia K-12 Schools

Posted on February 8, 2021 by | 4 comments

by James C. Sherlock

The federal government allocated a great deal of money in each of two different pieces of legislation in 2020 to provide COVID-related relief to K-12 schools.

I will endeavor here to explain briefly what that means to Virginia.

The two pieces of 2020 federal legislation that provide funding to K-12 schools were:

  • Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law on March 27, 2020; and
  • Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSA) signed into law on December 27, 2020

Two of the major program elements under each of those two bills are :

  • Elementary and Secondary School Emergency Relief (ESSER and ESSER II) funding – Virginia’s allocation is $1.2 billion dollars, 90% of which is to be sub-allocated by formula to school districts.
  • Governor’s Emergency Education Relief (GEERS and GEERS II) funding – $132 million to be allocated to the neediest public schools and non-public schools at the Governor’s discretion.  Money for the Emergency Assistance for Non-Public Schools (EANS) program is part of the Governor’s Emergency Education Relief Fund.  Virginia’s EANS allocation was $46,618,019. For comparison, total Virginia K-12 school spending from all sources was estimated by the NEA at $17.8 billion in 2018-19.

By way of comparison, the federal government sent $1 billion to Virginia for K-12 schools in 2019, including big money from the Department of Agriculture for the National School Lunch program ($247 million) and other non-educational programs, so the 2020 COVID supplementals already exceed the original annual federal appropriations for Virginia. Continue reading →

4 Comments

Posted in Education (K-12), Efficiency in government, Finance (government), Government Oversight, Open Government, Taxes

Tagged