Photo Credit: The Washington Post
by Steve Haner
Dominion Energy Virginia’s effort to force its ratepayers to finance a fleet of electric school buses has finally crashed, defeated by the House of Delegates for a third time in the final roll call of the 2021 General Assembly Saturday night.
The 41-49 rejection by the House at about 11 p.m. followed an earlier 46-46 rejection just before 9 p.m. In both cases the House was rejecting near-identical conference reports on Senate Bill 1380, first killed and revived about ten days ago.
In all three cases, the utility had no problem getting exactly what it wanted from its compliant friends in the Virginia Senate, which backed these newest versions of the bill Saturday by 25-12 and 27-12.
Del. Dan Helmer, D-Fairfax, got the final word on the House floor before the final vote. “I think we have a really excellent opportunity to say we need regulatory reform in Virginia,” Helmer told his colleagues in urging rejection of the proposal. That linked this bill’s defeat to the earlier rejection – by those same utility-compliant senators – of a series of reform bills seeking to rebuild State Corporation Commission (SCC) authority over rates. Continue reading
Seen in my neighborhood on my morning walk.
Long-Term Trend in Working at Home. Credit: Alan Pisarski
by James A. Bacon
It may be time for a major re-think of transportation policy. Alan Pisarski, a Northern Virginia transportation consultant, argues that the states should refrain for now from expanding the transportation system and dedicate funds to properly maintaining the transportation assets they have.
New technologies and business models, some accelerated by the COVID-19 epidemic, could radically change decades-old travel patterns. In a Reason Foundation presentation made last year, Pisarski said the level of uncertainty is “immense.”
Virginia legislators would do well to review Pisarski’s presentation as they tinker on the 2022-23 budget bills advancing through the General Assembly. Absent major changes, the commonwealth will allocate $8 billion roads and highways, almost $1 billion to rail and mass transit in fiscal 2022, and even more the following year. That includes $3.6 billion for new highway construction and $700 million for mass transit (mostly to support the Washington Metro). Spending is up dramatically from the $7.2 billion allocated to transportation in fiscal 2020. Fixated on social justice issues, legislators have been content to let the system run on auto-pilot, with funds allocated between maintenance, road construction, and transit investments according to complicated formulas. The larger issue of how much money Virginia really needs has gone unaddressed. Continue reading
by Steve Haner
Tax on Paycheck Protection Program Grants
The General Assembly session deadlines require final decisions on various revenue bills before the final budget bill is adopted, in theory keeping the two issues separate. What is good tax policy should not be driven by the need or greed of the appropriators.
But the conference committee overseeing the final decision on how much of the Paycheck Protection Program Grants will be taxed is dominated by appropriators, including the chairs of the both the House and Senate budget panels. The Senate’s proposal to allow $100,000 of PPP grants to be tax free produces less revenue, so the House’s position of allowing only $25,000 to be tax free meant the House budget includes another $70 million in spending.
The announcement that the state’s economy continues to hum and produce additional revenue, adding $730 million more in the General Fund, would allow for the Senate position to prevail without the need to cut the existing House budget. But the pressure remains to tax more and spend more, with Governor Ralph Northam raising expectations even higher with a late proposal for fatter employee raises. Continue reading
Rav4 hybrid — paying its fair share
by Bill Tracy
There’s a new Virginia tax called a HUF — for Highway Use Fee.
Who knew? Not me — until I had to pay it.
If you renew your Virginia vehicle registration, and your car exceeds a 25 miles-per-gallon EPA rating, you will be politely advised that you are underpaying pump taxes, and to be fair, you will be assessed an extra fee. In my case, I owed an extra $35 taxes because my new RAV4 Hybrid gets 40 MPG.
Because my wife and I do not put on many miles in retirement, and with COVID, that means I probably now pay a little more combined Virginia pump tax with my RAV4 Hybrid than I would with a non-hybrid RAV4. Not to mention significantly more annual car tax to Fairfax County. Continue reading
EV School bus? Storage battery? No, utility profit center.
by Steve Haner
First published this morning by Thomas Jefferson Institute for Public Policy.
The ultimate goal of the Transportation and Climate Initiative with its tax and rationing scheme is to eliminate fossil fuels for transportation and get us into electric vehicles. That is something advocates have admitted and critics have pointed out. While Virginia TCI participation is on hold in this statewide election year, the 2021 General Assembly is following other pathways to the utopian EV future.
The House of Delegates has sent the Virginia Senate a bill to create a state financial incentive of $2,500 for purchase of a new or used electric vehicle. An additional $2,000 rebate is offered to a low- and middle-income buyer of a new car and $500 if that buyer choses a used EV.
The House has also passed legislation empowering the state’s Air Pollution Control Board to adopt state regulations on vehicle fleet fuel economy and to model California’s existing program forcing manufacturers to offer more zero- and low-emission vehicle sales in the state. This bill sets no goals but puts an accelerated process in motion, bypassing the full regulatory review, with a goal of regulating the 2025 model year vehicles offered in the state. Continue reading
Norfolk Southern’s coal loading terminal at Lambert’s Point in Norfolk
By Peter Galuszka
Oilprice.com, a petroleum trade newsletter, has a story that could spell more bad news for the faltering Virginia coal industry.
For many years, the most valuable product from Virginia’s coal fields was coking or metallurgical coal that is exported to other countries for use in steel making.
China has been a crucial buyer of Virginia coal but recent pronouncements from the Communist Party leadership indicate that coal is on its way out after leader Xi Jinping outlined a far-reaching program that set a peak of carbon emissions in 2030 followed by net zero policy by 2060.
Correspondingly, steel companies are also setting net zero carbon goals including the world’s biggest steel makers ArcelorMittal of Europe, Baowu Steel of China and Nippon Steel of Japan.
The moves could erase Virginia’s coal experts because the demand for the steam coal used to generate electricity has already been undercut by the remarkable growth of renewable energy sources like solar and wind in China and India. As they expand, their costs go down – below those of coal.
Coking coal exports from Hampton Roads could get slammed as global steelmakers experiment with new manufacturing processes. Continue reading
By Steve Haner
The Transportation and Climate Initiative plan to tax and ration motor fuels suffered a major setback just before Christmas, when eight of the eleven states considering it decided not to move forward in 2021. Less than two weeks earlier, advocates had released polling that claimed to show overwhelming popularity for the idea. Continue reading
by James A. Bacon
In his proposed budget unveiled yesterday, Governor Ralph Northam provides $50 million to extend Amtrak passenger rail service from Roanoke to the New River Valley. The money would go to “right-of-way and easement acquisitions and anything that would help reduce bottlenecks to make way for a passenger train in the New River Valley,” reports the Roanoke Times.
“This is an important down payment on extending passenger rail connections in Southwest Virginia,” Northam said. But it’s not a done deal yet, says the Times. There is no firm timeline for when the state and Norfolk Southern Corp. will strike an agreement.
Fifty million dollars is a non-insubstantial sum. As Northam acknowledges, it is only a “down payment.” It does not cover, for instance, the cost of building an Amtrak station in Christiansburg. Some documentation exists online about projected ridership, revenue, and costs available, but I could not find a study that weighed the costs and benefits of the proposed route compared to alternative investments of the money.
Let’s review the numbers, such as we have them. Continue reading
New sparkplug for Colonial Williamsburg. Carly Fiorina, former CEO of Hewlett-Packard, unsuccessful candidate for president and Virginia resident since 2011, has joined the Colonial Williamsburg Foundation Board of Trustees as chairwoman. It is gratifying to see Fiorina, a truly dynamic individual, apply her talents to a Virginia enterprise. Colonial Williamsburg has suffered a long-term decline as American interest in visiting historical sites has ebbed. Like all tourism attractions, the preserved colonial town also has been hobbled by mandated and self-imposed travel restrictions during the COVID-19 epidemic.
Speaking of conserving history… The American Battlefield Trust has issued a report describing how developing massive solar farms can be made compatible with the preservation of rural historical resources. “Conflict tends to arise when developers disregard the historic and cultural landscapes on or near potential solar sites,” states the report, “Siting Solar in Virginia: Protecting Virginia’s Historic Landscape While Meeting the State’s Clean Energy Goals.” The report advises: (1) early planning and consultation can help avoid harm to historic resources; (2) localities should establish clear rules and guidelines; (3) developers should consider locating solar facilities on greyfield or brownfield land, or co-locating with existing uses such as rooftops and parking lots; (4) developers should proactively engage with the State Historic Preservation Office.
Speaking of solar production… Dominion Energy has scrapped its plans to build a $200 million gas-fired peaking plant at the Southern Virginia Megasite in Pittsylvania County. Reports the Chatham Star-Tribune: The company said it no longer believes it is possible to build the units planned in Pittsvylania County “despite the economic and reliability benefits for our customers.” Peaker plants offset fluctuations in supply and demand to maintain a stable electric grid, a concern that will become all the more pressing as Virginia moves to increased solar production. “We plan to conduct a further reliability study to determine how best to move forward to maintain the around-the-clock service our customers need.” Continue reading
by Bill Tracy
Let me tell you a sad yarn about buying green cars in Virginia.
Due to a dead hybrid battery after 14 years and 192,000 miles, we recently traded in our classic 2006 Toyota Prius for a new Toyota RAV4 Hybrid LE, the cheapest green RAV4.
Had we lived in a different Blue state, we could have purchased the luxurious new RAV4 Prime Plug-In ($40,000 car), with heated seats and all of the fancy extras, cheaper (after taxes) than the $28,000 economy hybrid model, with no heated seats. How is this possible? Well, states like Colorado offer up to $5,000 plug-in vehicle rebate on top of the existing Federal $7,500 tax credit. Furthermore, some states throw in generous additional benefits for plug-ins, such as free HOV/HOT lane use during the gridlocked rush-hour.
Virginia has no plug-in vehicle incentives yet, but per Jim Bacon’s recent article, that is on the agenda. The Old Dominion, however, has a systemic problem in the new car showroom: high property taxes. Just ask former NFL star Michael Vick, who learned the hard way that the Virginia car tax is a progressive tax, especially punishing to newer cars, cleaner cars, and expensive cars.
Let’s take a close look at the green car math. Below I compare NoVA car costs to our neighbors in Washington, D.C. , which offers excise tax-free purchase of all green vehicles over 40 MPG EPA City. Continue reading
New Jersey environmental justice advocate Maria Lopez-Nunez, lower left, speaks with organizers of the Transportation and Climate Initiative on September 29. Hear her here.
By Steve Haner
“I think TCI is just taxing poor people so that we can subsidize rich people’s electric cars.”
So said New Jersey’s Maria Lopez-Nuñez, Deputy Director, Organizing and Advocacy for the Ironbound Community Corporation. She was speaking during an online seminar September 29 organized by Transportation and Climate Initiative advocates.
That particular comment can be heard at about 3:10 into this recording of her speech. The full meeting is recorded here, and her remarks start at about 1hour and 43 minutes in. Listen to her whole speech if you can. Listen to those that follow and you will learn she was not alone.
Lopez-Nunez is dead on correct that TCI imposes a major and very regressive tax to deliver minor reductions in CO2 emissions, and that moving people into electric cars merely moves the source of CO2 emissions from the roads to the power plants.
Run the projected CO2 emissions savings from TCI through the climate change models at the heart of this whole worldwide debate and the result is infinitesimal changes in the feared future temperature increases. Selling this as saving the planet is not credible, so the push is on to find a new rationale. The effort to make that “environmental justice” by targeting the tax money to their causes is not being well received.
by James A. Bacon
Now that Virginia is committed to a 100% renewable electric grid by 2050, the push is on to decarbonize the transportation sector. In a word, that means persuading Virginians to switch from cars with internal combustion engines to electric vehicles (EVs). In an early sign of what’s to come, a Charlottesville-based group, Generation180, has published a report detailing policies needed to encourage widespread adoption of EVs in the Old Dominion, “Virginia Drives Electric 2020.”
There is much good that can be said of electric vehicles. They have lower fuel prices and maintenance costs. Generation180 says the cost is $6,000 to $10,000 cheaper over the car’s lifetime. If that were accurate, I would expect to see more than 24,000 EVs on Virginia’s roads. Still, I buy the argument that the cost is increasingly competitive. Moreover, there is the social benefit from reduced pollution and lower CO2 emissions. I suspect those numbers are hyped and exaggerated, but clearly there is some benefit. All things considered, I think EVs are a great idea. But let’s not suspend our rational faculties when discussing them.
Generation180 has identified barriers in Virginia to rapid EV adoption. One is the shortage of inventory in automobile dealership showrooms. “We found 1,347 new and used electric vehicles in Virginia, compared to 2,399 in Maryland. In other words, inventory was 44 percent lower in the Virginia cities than in the comparable cities in Maryland.” Continue reading
Image source: Northern Virginia Transportation Commission
by James A. Bacon
A 3% cap on annual state contributions to the Washington Metropolitan Area Transit Authority (WMATA) “appears to be a useful tool” for managing runaway subsidies for the Washington-area transit agency, finds a report recently published by the Northern Virginia Transportation Commission (NVTC).
The main benefit cited by the report, required by state law, has been to restrain increases in wages and salary levels, which constitute 70% of WMATA’s budget. States the report: “Data presented to the Working Group found the annual wage increases for union employees range from 0% to 4% per year in the multi-year CBAs over FY 2009 – FY 2024, demonstrating that the cap appears to be a helpful tool in WMATA’s negotiations with labor.”
Otherwise the “Report on Virginia’s 3% Cap” is a curious document. Continue reading
This column was published originally in the Thomas Jefferson Institute for Public Policy newsletter. Steve normally re-publishes it on Bacon’s Rebellion himself, but he is volunteering at the polls today, so I am posting for him. — JAB
by Steve Haner
One quarter into the new fiscal year, despite the ongoing COVID-19 recession, Virginia state government is blowing the roof off its revenue estimates. Thank tax increases Governor Ralph Northam has signed.
Secretary of Finance Aubrey Layne recently reviewed the July through September 2020 results with state legislators, offering his standard slide presentation. Compared to the year before – before COVID — the state’s total General Fund revenue was up 9.9%, sales tax revenue was up 7.5%, corporate income tax receipts up 36% and estimated individual tax payments (those not withheld from paychecks) up 59%.
Now more tax increases are being proposed for the 2021 General Assembly. The Transportation and Climate Initiative in particular is a new carbon tax on gasoline and diesel. The proposal to restore a state inheritance tax on large estates is back. Virginia’s leading progressive group is actually hiring a “revenue campaign manager” to lead the 2021 and 2022 fight “to secure expanded progressive revenue options.” The tax changes already in place will see our revenue “progress” quickly. Continue reading