Category Archives: General Assembly

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.

Notes from the Right Wing Echo Chamber

By Peter Galuszka

On Wednesday, I was standing next to the Capitol grounds in Richmond watching brightly decorated cars and pickups drive on 9th Street, their horns blaring.

I was attending the drive by protest rally on assignment for Style Weekly and happened to speak to Jason Roberge, a Spotsylvania County resident who is one of several Republicans hoping to oust U.S. Rep. Abigail Spanberger, a former covert CIA officer who represents the 7th Congressional district.

Roberge was there to protest what he says is Gov. Ralph Northam’s “terrible job” in temporarily shutting down businesses to prevent the spread of the COVID 19 virus. The rally was part of a series of protests across the country that are being set up on cue from right-wing activists.

Roberge told me: ”I hear he’s (Northam’s) down on North Carolina beach while this is going on.” As he spoke the House of Delegates was holding a special session under an outdoor tent nearby while the Senate presided at the Science Museum of Virginia.

Northam at the beach? It turns out that the conservative echo chamber has been peddling a story, firmly denied by Northam’s office, that he was at his house in Manteo, N.C. not far from the beaches at Nags Head during the special General Assembly session. Continue reading

COVID Casualty: Unemployment Insurance System

The rise and fall of Virginia’s unemployment insurance tax, per worker, in response to the 2008-2009 recession. The COVID-19 recession, just starting, is likely to set new records for amount of tax and the length of time those elevated taxes are imposed. This chart includes the average (not maximum) base tax, an additional $16 fund builder tax, and a pool tax imposed on everybody who pays to compensate for employers who default. Source: Virginia Employment Commission.

By Steve Haner

This first appeared in today’s Richmond Times-Dispatch and has also been distributed by the Thomas Jefferson Institute for Public Policy.  

America’s and Virginia’s unemployment insurance program – born of the Great Depression and the Social Security Act of 1935 – may be another casualty of the COVID-19 pandemic. The virus has mutated unemployment insurance into a form not financially sustainable.

Each state has its own unemployment insurance trust fund, financed by taxes on employers and steadily growing in good times. The last time the Virginia Employment Commission publicly reported on our fund’s status, almost a year ago, it projected a balance of $1.3 billion by the end of 2019.  Continue reading

A Break from COVID — Gambling

Photo Credit: Richmond Times-Dispatch

By Dick Hall-Sizemore

The Governor is in a tug-of-war with his Democratic colleagues in the General Assembly. The objects of their contention are the so-called “skill games” (also sometimes called “gray machines”).

The skill games are video games now found in numerous truck stops and convenience stores that offer a cash prize to the winners. The opponents of such games have denounced them as illegal gambling. One Commonwealth’s attorney has charged the distributor of such games for violating Virginia law. The games’ distributors contend they are games of skill. Continue reading

Stop Gap Budget Amendments

By Dick Hall-Sizemore

Not surprisingly, the Governor did not try to re-write the budget in the reconvened session. There is just not enough information available now regarding the extent to which state revenues will be affected by the economic downturn brought on by the novel coronavirus. Using the process set out in the Appropriation Act and implemented several times in recent years, the re-rewrite (with major cuts) will happen next fall.

The Governor used his proposed budget amendments to accomplish several objectives: increase the amount of general fund cash available to address revenue shortfalls; freeze spending on his and on General Assembly initiatives; allow additional spending to proceed in specified, de facto mandated areas; and give himself and agencies administrative flexibility in dealing with COVID-19 situations. Continue reading

The Revolution Has Been Postponed, Not Canceled

by Steve Haner

The revolution has merely been postponed, not cancelled.

Governor Ralph Northam has asked the General Assembly to put off until May 1, 2021, the implementation of several key pro-union changes in Virginia’s labor and employment laws, including a 31% increase in the minimum wage.

Saturday, April 11, was the deadline for Northam’s consideration of the 2020 General Assembly’s output. He had to choose whether to sign, veto or propose amendments to hundreds of successful bills. The amendments he proposed will be put to a vote in the General Assembly reconvened session on April 22.

Will enough legislators of his own Democratic Party join him in disappointing the key constituency of the Democratic Party? Union leaders expressed their fury in the wake of his announcements, so that battle is joined. In the meantime, do not ignore the dozens of other bills which were signed which also damage the business climate in Virginia going forward.

When you see all of the “pro-worker” legislation signed and touted by the Governor in one combined list, it is crystal clear that liberal Democrats (and there appears to be few centrist Democrats left) believe many Virginia employers were refusing to pay, misclassifying, punishing, discriminating against or otherwise abusing workers until the new Democratic majority came along to offer salvation. Continue reading

The Budget Sausage Factory

by Dick Hall-Sizemore

I have been going through the individual budget amendments adopted by the General Assembly. I admit it — I am a budget nerd who finds this stuff interesting. Plus, in this instance, my immersion into budget wonkery had the advantage of providing a diversion from the omnipresent discussion of the coronavirus.

Budgets are a great guide to a government’s policies. Governments put their money where their priorities lie. There was a summary recently in this blog of the major amendments to the recently passed budget bill.

In addition to the major policy initiatives such as public employee compensation, education, and health care, it is instructive to examine the smaller amendments.  They provide further insight into the legislative process (another area I find fascinating): Who has influence, what areas or policies are favored, etc.? Continue reading

Buying Time to Fix the Budget Hole

by Dick Hall-Sizemore

To deal with the virus-created budget crisis in the short term, the Northam administration has announced sort of a “time out.” According to the Richmond Times-Dispatch, the plan will consist of two primary components: freezing all new spending and diverting planned deposits in the cash reserve to pay for essential services in the current year.

The Governor will propose an amendment that would allow the administration to use about $600 million that had been planned for deposit in the cash reserve fund for essential operations of state government. This is not the Rainy Day fund, but money in the additional cash reserve established a couple of years ago.  Under the provisions of the state constitution, the Rainy Day fund cannot be tapped “unless the general fund revenues appropriated exceed such revised general fund revenue forecast by more than two percent of certified tax revenues collected in the most recently ended fiscal year. “Therefore, the state would need to wait until a re-forecast is conducted in the late summer before counting on the Rainy Day fund. 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

New Northam Financial Directive Late, Clueless

By Steve Haner

When I’m wrong, I should rush to admit it. The concerns expressed by others on this blog that the Northam Administration was failing to recognize the financial aspects to the COVID-19 pandemic were valid. The person exhibiting wishful thinking was me, with my assumption they were already acting.

That’s because they just acted, with an executive order to state agencies to freeze hiring, tighten spending and otherwise batten down the fiscal hatches for a storm. “We can expect to enter a recession soon,” Chief of Staff Clark Mercer writes in a four-page memo quoted by the Richmond Times-Dispatch.   

Wrong. The economy has been in recession for a month. A month. The concern now is a depression.

Mercer said the state expects “significantly less revenue” than the most pessimistic forecast Northam’s economic and revenue advisory councils considered last fall and reduced cash balances at the end of this fiscal year that will carry into the next two-year budget and require cuts in spending.

“Our intention is not to cut the budget in the short term, but decisions will depend on how much revenue comes in,” he said.

Wrong again. The state will be slashing the budget as never before, and the Governor should have started the process weeks ago. One can only hope, and it may be a forlorn one, that agency financial managers saw the clouds and acted on their own. If the Governor’s people are only now getting serious about the amendments to the budget due in seven days, shame.  Continue reading

Is Aubrey Layne Serious about a $2B “Hit” to Virginia’s Biennial General Fund from COVID-19?

By DJ Rippert

Penny Layne. Aubrey Layne is Virginia’s Secretary of Finance under the Northam Administration. Previously, Layne served as Secretary of Transportation under the McAuliffe regime. Prior to his time in government Layne held a number of executive positions in private enterprise including the presidency of Great Atlantic Properties. Layne is listed by Wikipedia as being a Republican. If true, he must have shown considerable competence and talent to be appointed to senior positions in two consecutive Democratic administrations.

Five days ago, during a Q&A with Richmond Times-Dispatch Magazine Layne effectively made an astonishing prediction. He was asked about the economic fallout from the COVID-19 epidemic in Virginia. The interviewer noted that COVID-19 would trim $2 billion from the state’s $48 billion General Fund budget within the $135 billion biennial budget. Here’s the question, “When the state budget was passed earlier this month, it was based on a full-throttled economy. Now the state is forecasted to lose potentially $2 billion in the upcoming two-year budget because of the coronavirus pandemic. How will the Northam administration address the drastic change facing the approved $135 billion budget?” Layne went on to answer that question and others without ever calling the $2 billion estimate into question.

Is it possible that the economic hit to Virginia from COVID-19 (even after federal bailout money) will only be $2 billion from the General Fund over two years? That’s just over 4% of the General Fund and just under 1.5% of the total budget.

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

A Capital Idea

By Dick Hall-Sizemore

As a diversion from the coronavirus story, as well as an effort to give you a little more variety, the following is my previously promised summary of the General Assembly’s changes to the capital budget.  (It was only a little over two weeks ago that the legislature adjourned, but it seems much longer.)

The actions of the General Assembly were both surprising and not surprising. The surprise was that, for the first time in many years, maybe ever, the legislature ended up authorizing fewer capital projects and less debt than the Governor had recommended. The non-surprise was the winners and losers. Continue reading

This is the Green New Deal Economy. Enjoy.

Source: Energy Information Agency.  Click for larger view. LCOE, LACE and Value-Cost Ratio explained below.

By Steve Haner

If all else fails in achieving your green energy dreams, you can always hope for a depression.

In Italy, the COVID-19 depression has already dropped electricity demand by about 18-21%, as reported recently by Utility Dive. The regional transmission organizations around the United States are seeing declines, as well, and I’ve been told (no data, but a reliable source) that PJM’s load is approaching a 10% drop.  Past recessions have included electricity usage declines.  Continue reading

Northam: Take the Bricks Off the Life Rafts

My first post in two weeks. What the heck, I should join the parade and give a bunch of advice to our beleaguered Governor which he is likely to ignore.  This first appeared today in the Fredericksburg Free Lance-Star. It has one of those annoying “take a survey” paywalls, but in this case asks a question we should all answer. Try it.    

By Steve Haner

The assumptions underlying the most contentious debates of the 2020 General Assembly session are gone. Sixty days ago, activists were arguing that this was a rising economy and state government should mandate raising workers to a higher level.

This is a now sinking economy, and the General Assembly’s actions have piled bricks on the life rafts that workers in the commonwealth will need to survive.

The priority now is containing the spread of this respiratory virus, but soon it becomes reviving an economy that has come to a near stop. Nobody knows when or where unemployment will peak, but this is starting to look more like 1929 than 2009.

Gov. Ralph Northam’s lasting legacy will not be his response to the virus, but the speed of the following recovery.  Continue reading