Category Archives: Poverty & income gap

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.

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

Now Library Fines are a Social Injustice

Mayor Levar Stoney (left) and Library Director Scott Firestine

by James A. Bacon

The Richmond Public Library has joined 200 other public libraries across the country in eliminating the charging of fines for overdue books. Why? Because, in the words of City of Richmond press release, the fines, which make up less than 1% of the library’s total budget, “disproportionately affected low-income, African American and Hispanic communities.”

By eliminating fines, the city hopes that “residents of all backgrounds will feel more comfortable and welcome” to use library resources. Says Mayor Levar Stoney: “A welcoming library … provides a gateway to the world of learning and opportunity for personal progress. Ending fines … will alleviate the burden on our most vulnerable Richmonders.”

Added Richmond Public Library Director Scott Firestine: “Our library has removed a punitive, inefficient and misguided practice that was a barrier blocking our most vulnerable users. This is a giant step forward to inform, enrich and empower.”

Needless to say, my initial reaction to this idea was not a positive one. Eliminating fines erodes personal responsibility. It sends a signal to poor people that larger society won’t hold them accountable for their actions. You’re poor? You get a free pass. At the same time, I do believe in following the facts. Arguments that aren’t certifiably insane actually can be made that the idea is a good one. 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

Minimum Wage and Medical Insurance

Question of the Day: If Virginia enacts a minimum wage increase, how many employers will respond by cutting fringe benefits like medical insurance?

Kennon Morris, president of the Virginia Forest Products Association, raises the concern in a Free Lance-Star op-ed today. Here’s his prediction of what would happen in rural Virginia: The minimum wage “would force many businesses to shut down, cut jobs, or hire part-time workers without benefits.”

Foes of the minimum-wage hike have focused mainly on the impact on jobs. But employers may choose other ways to control costs. One possibility is scrapping company-subsidized health plans — encouraging employees enroll in Medicaid or buy Obamacare. I would love to see an analysis of how many workers potentially would be affected and what the fiscal impact on state and federal government would be if thousands suddenly became medical wards of the state.

— JAB

More Mobile Homes, Please

Smitty’s Mobile Home Park in Norfolk

by James A. Bacon

The good news is that the poverty lobby has recognized that mobile home parks provide a valuable source of affordable housing in Virginia. The bad news is that… the poverty lobby wants to help.

There are about 600 mobile home parks in Virginia. The average sales price for a single-width mobile home is about $53,000 (not including lots), a fraction of the $280,000 median price for a single-family house. These parks provide affordable housing for tens of thousands of Virginians — more than 11,400 in Central Virginia alone.

One way to approach mobile homes in Virginia is to say, “Fantastic! A source of affordable housing. How can we open up more land for development of mobile home parks? How can we increase the supply and give poor people more options for where to live and whom to rent or buy land from?”

Another way to approach mobile homes is to look at the negatives. It turns out that many are in disrepair. Figure that — homes owned by poor people are in disrepair. Not only that, Christie Marra, director of housing advocacy at the Virginia Poverty Law Center, tells Virginia Public Media (VPM), many trailer parks have less than desirable surroundings. “They didn’t have street lights, they didn’t have paved roads, they didn’t have up-to-date electricity or sewer systems.” Continue reading

Energy Omnibus III: Race, Poverty and Justice

By Steve Haner

Unfortunately, there is nothing new about the Virginia General Assembly passing an energy development bill which overrides the authority of the State Corporation Commission or usurps its role in planning utility resources.

Where Governor Ralph Northam’s new clean energy transition legislation breaks ground is its immersion into questions of race, poverty and environmental justice.  Should it pass and be implemented, the large electric utilities will be charging means tested rates, exempting low income ratepayers from some charges entirely, submitting their construction plans to an environmental justice council and engaging in preferential hiring for at least some construction projects.  Continue reading

Energy Omnibus: What it Does, How it Costs You

What will Virginians see due to the Virginia Clean Economy Act? “Lots and lots of solar,” said the patron, Del. Richard Sullivan, D-Arlington. Higher bills, added the State Corporation Commission.

By Steve Haner

The General Assembly adopted Governor Ralph Northam’s clean energy package Tuesday, with party-line votes in both the House of Delegates and Virginia Senate. Two House Democrats joined the Republicans in opposing the House version.

House Bill 1526 and Senate Bill 851 appear identical but amendments were being adopted at the last minute. Now that they have crossed over to the other chamber, they likely will become identical.  And expect furious efforts to recruit some Republican votes in favor, as this new vision for Virginia’s energy economy will be disruptive, expensive and politically explosive.

Using the House version as it passed, here is a tour of some (not all) highlights, with line references so you can follow on this PDF version of the engrossed bill. If you want to see it without line numbers, but with highlighting of the new language instead, look here. For that I’ve used the Senate bill.

The bill overrides State Corporation Commission authority to look out for consumers in too many places to count, but you’ll find the clearest and most important example of that on line 1399 of the House bill.  Continue reading

More Data on Why Students Don’t Complete College Degrees

by James A. Bacon

The biggest reasons students take college courses but fail to complete a degree are work-related, according to a Strada Education Network survey of more than 42,00 adults nationally with some college but no degree. Seventeen percent cited “work-related” reasons for ceasing their studies. The second mostly commonly cited reason was financial pressure, followed closely by life events/personal problems.

When people rack up thousands of dollars in student loans without obtaining an educational credential that will enable them to qualify for a better job, it is both a personal setback and a waste of social resources. The Strada study is important because it helps identify the reasons why many students fail to get degrees, and it provides lawmakers and colleges guidance in how to address the college dropout issue.

Governor Ralph Northam has budgeted $145 million to make community college tuition-free for low- and middle-income students pursuing jobs in high-demand fields. He cited numbers from Reynolds Community College showing that full-time students who dropped out before completing their degrees “usually had earned a 3.1 grade point average when they left school.” If they didn’t leave for academic reasons, the Governor surmised, they must have left for a lack of money.

After checking the Reynolds data, I found that conclusion was unwarranted. Although the data ruled out low GPAs as a reason for at least 40% to those who did not return for a second year of study, it did not address what their motivations were. I suggested that one other reason might be because they had found a job. There could have been other reasons.

However, the Strada data provides some evidence in support of Northam’s position. Continue reading

A PIPP of an Idea: Electricity Transfer Payments

By Steve Haner

Green energy advocates never tire of telling us that accomplishing their zero-carbon electricity supply will lower our costs. If so, why does their dream bill include a new income transfer entitlement program for low-income customers?

It is called the Percentage of Income Payment Program with a handy acronym PIPP. It first appeared in Delegate Lamont Bagby’s House Bill 1483. The Henrico County Democrat saw his bill pass the House Labor and Commerce Committee February 4, but for good measure it is now enshrined on lines 1828 through 1909 of the omnibus clean energy bill revealed February 6, House Bill 1526Continue reading

Plundering the Middle Class

by James A. Bacon

To get a handle on how progressive (to be clear, I use “progressive” as a synonym for “leftist”) Governor Ralph Northam’s proposed two-year budget is, consider the following.

If Northam’s agenda is adopted, Virginia’s middle class will pay higher gas taxes, higher cigarette taxes, higher income taxes, and higher electric rates. That doesn’t include higher charges resulting from a new hospital tax last year, nor does it include higher college tuition, any of the proposals (such as an inheritance tax) proposed by emboldened Democrats in the legislature, higher who-knows-what-else is squirreled away in the budget, or ideas just hanging fire like the Transportation Climate Initiative.

What will the middle class get in return? Virtually nothing, unless you count expenditures on programs meant to benefit the public at large such as the environment, rural broadband, education, and workforce development. The majority of spending programs are targeted to help lower-income Virginians — and various Democratic Party constituencies who mask their self-serving agendas as benefiting the poor.

Going down the list of initiatives listed in Northam’s State of the Commonwealth address, we find: Continue reading

Another Tool in the Search for Affordable Housing

Jeff Bourne

by Dick Hall-Sizemore

This is going to be an interesting session; probably a nightmare for Republicans. Much of the public attention has been on gun legislation, but there are other areas in which Democratic initiatives have been bottled up in the past and now will have a much better chance of being enacted.

One of these areas is housing. In an earlier blog today, Jim has highlighted one proposed piece of legislation dealing with “middle” housing. There is another bill that I had heard about earlier, which I think also addresses a housing issue that we have discussed on this blog. That is HB 6, introduced by Del. Jeff Bourne. D-Richmond. The bill would forbid someone from refusing to rent or sell a dwelling on the basis of the source of income or payment by the person seeking to rent or buy. In effect, it would prohibit landlords or property sellers from refusing to accept housing vouchers.

Bourne introduced this legislation in the 2019 session. It died in a House committee, without even being given the consideration of being referred to a subcommittee to be heard. Continue reading

Samirah Bill Inspires Debate Over Residential Zoning

Ibrahim Samirah

by James A. Bacon

Suburban Virginians were the key swing voters who gave Democrats majorities in both houses of the General Assembly. It will be interesting to see if Democrats now manage to alienate them.

Del. Ibraheem Samirah, D-Herndon, has submitted a bill, HB 152, that would require zoning ordinances in localities across the state to allow “middle housing” — duplexes, townhouses, cottages and other structures — in neighborhoods zoned for single-family dwellings.

Samirah characterizes the mandate as an “affordable housing” initiative.  He quite accurately says that residential zoning restrictions restrict the supply of new housing construction by limiting housing units to one per lot. But rhetorically he goes off the rails. Describing suburbs as “mostly white and wealthy,” he implies that people wishing to live in safe, peaceful neighborhoods are guilty of racial discrimination.

“Because middle housing is what’s most affordable for low-income people and people of color, banning that housing in well-off neighborhoods chalks up to modern-day redlining, locking folks out of areas with better access to schools, jobs, transit, and other services and amenities,” he wrote on Facebook (as quoted by the Daily Caller, a conservative web publication). Continue reading

At Last: Zoning Restrictions on “Middle Housing” Are Coming Under Scrutiny

A neighborhood of detached single-family dwellings in Arlington.

by James A. Bacon

Arlington County plans to study the “missing middle” in its housing market: homes that fall between apartment-sized units and single-family dwellings — in its housing market.

Ninety percent of the county’s residential land is zoned for detached, single-family houses. The median housing price in the county falls between $530,000 and $640,000, and the arrival of Amazon is likely to drive prices even higher. A big part of the problem, says Richard Tucker, acting coordinator of Housing Arlington, is restrictive zoning. WAMU summarizes his thinking:

Too much single-family zoning is leading to a proliferation of teardowns, Tucker says. In neighborhoods throughout the county, property owners are bulldozing smaller single-family homes to make way for mansions that swallow up entire lots. Teardowns are common in neighborhoods where zoning is restricted to single-family construction, Tucker says, but they’re expensive to build and own, so they don’t contribute affordable housing to the county. They also take up a lot of land that could be used more efficiently, he says.

If owners had the option to build duplexes and triplexes instead of McMansions, Tucker says, maybe they would. “What we hope to do is identify other options for these property owners,” the planner says.

Continue reading

How to Fix Virginia Schools: Mo’ Money vs. the Bristol Model

by James A. Bacon

In thinking about what ails Virginia’s K-12 public schools, perhaps we should give some consideration to the state’s schools of education and what Virginian teachers are taught. To get a sense of the quality of scholarship and thought that comes out of our teaching academies, we might consider an op-ed penned nine days ago for the Washington Post by Robert C. Pianta, dean of the University of Virginia’s Curry School of Education and Development.

Here is the thesis of his piece: “The perception that education is in crisis has contributed a fundamentally distorted view of the system that ignores the biggest problem plaguing U.S. public schools: a lack of resources.”

Sadly for Mr. Pianta, the op-ed now bears a correction at the top, which reads as follows: “An earlier version of this piece stated that, adjusting for constant dollars, public funding for schools had decreased since the late 1980s. This is not the case. In fact, funding at the federal, state and local levels has increased between the 1980s and 2019.” Continue reading