Higher Ed Bonds, Fees, and Donations

By Dick Hall-Sizemore

Almost totally overlooked or ignored among capital projects in the budget bill are those higher ed projects financed with revenue bonds.  They are probably ignored because their passage does not affect the state’s debt capacity and tax revenues are not needed for debt service.  Nevertheless, they do have an impact on Virginia citizens.

For most higher ed institutions, these bonds are issued by the Virginia College Building Authority (VCBA).  The debt service is covered by revenue from a variety of non-tax sources, such as room and board fees,  parking fees, donors, and general student fees.  The issuance of these bonds has to be approved by the General Assembly. Continue reading

Bacon Bits: Antifa Hoax, Goose Sauce, Selling Nova Bike Trails

Hate crime hoaxes not just for minorities anymore. According to Willfred Reilly, the expert on hate crime hoaxes, the fastest-rising category of hoaxes is perpetrated by whites, as white groups take a lesson from the Left’s grievance-and-victimhood playbook. The latest instance involves a Civil War reenactor by the name of Gerald Leonard Drake, reports the Washington Post. Two years ago an undetonated pipe bomb was discovered at the annual reenactment of the Battle at Cedar Creek, in which Drake, a 61-year-old Virginia man, participated. A series of threatening letters issued under the name of Antifa followed, and the 2018 event was canceled. “We will make Charlottesville look like a Sunday picnic!” said one letter. Now the FBI has issued a search warrant revealing investigators’ belief that Drake wrote the letters. Drake has not been charged with a crime.

Sauce for the goose… The Virginia Education Association has been fighting for the right to engage in collective bargaining for its members, and many members of the General Assembly think that’s a dandy idea. The VEA is, after all, a staunch supporter of the Democrats who now run the legislature. But writing in his blog Union Report, Mike Antonucci recounts a little history. The VEA does not have the most harmonious of relationships with its own employees. Employees of the union formed a picket line outside VEA headquarters in 2012, and management-employee relations have been simmering ever since. Employees have filed a lawsuit, petitioned the parent union, and in 2018 even filed an unfair labor practice complaint. Schools are chaotic enough. Do we need to add collective bargaining to the list of woes? (Hat tip: Chris Braunlich.)

Enticing creative-class Millennials. The labor market in Northern Virginia is exceedingly tight, and that’s before Amazon has ramped up its hiring of 25,000 employees. Economic developers are shifting some of their attention from recruiting corporate investment to… recruiting talent to fill jobs that are going begging. The Northern Virginia Economic Development Alliance and the Northern Virginia Chamber of Commerce are making it their top priority to lure bright young minds to the region, reports the Washington Post. Northern Virginia has a tough sell on a couple of quality-of-life indicators: traffic congestion and the cost of housing. The target audience, says Victor Hoskins with Fairfax County economic development, is “looking for a food culture, brew and distillery culture, bike paths, walking trails. How can we package this so they can easily navigate it and relate it to a job opportunity, too?”

Energy Omnibus II: It Doesn’t Shut Gas Plants

Virginia City Hybrid Energy Center, St. Paul, VA. It survives until at least 2030 and perhaps 2045 in the clean energy legislation. Dominion Photo.

By Steve Haner

Will all of Virginia’s existing fossil fuel electric power plants be closed under Governor Ralph Northam’s new clean energy transition legislation? As we continue our detailed examination of House Bill 1526 (with line references), the answers may surprise some. Not many of them. Not the natural gas plants.

Dominion Energy Virginia has been on a building spree for more than a decade, financing new coal, natural gas and woody biomass generators around the state with “rate adjustment clauses,” specific charged for specific projects. All of them emit carbon dioxide. Monthly bills now include six separate RACs or “riders,” costing residential consumers $12.43 cents for every one thousand kilowatt hours of juice they consume.  Continue reading

How to Fix the Borderline Fraud of Surprise Billing

by James A. Bacon

Surprise medical billings are one of those things where people of all political stripes come to agreement. It sucks to go to a hospital within your health insurance network only to discover when you open your bill that an anesthesiologist, consulting physician or emergency room doctor at the hospital, unknown to you, did not belong to your network, and that you’ve been charged thousands of dollars more than you bargained on.

While loathing of the phenomenon knows no partisan grounds, solutions are remarkably hard to find. The General Assembly has been struggling over this issue this session, so far without success. This article in The Virginia Mercury describes three remedies being debated, each with their own pros and cons. I have a few thoughts of my own.

Surprise billing arises from the fact that insurance carriers compete by offering lower rates to customers who agree to stick within restricted provider networks. Hospitals, physicians, labs and other providers agree to charge less in exchange for getting preferential access to the carrier’s customers. It’s one of the few ways to make providers compete on the basis of price and lower costs, and not a strategy we would want insurance carriers to abandon. Continue reading

Let’s Build Some More!

Source: Debt Capacity Advisory Committee, 2019 Report

By Dick Hall-Sizemore

This report on the capital budget section of the budget bill is later than I had planned. There is so much going on with the General Assembly this year.  I was familiar with the term “like trying to drink from a fire hose.” Now, I know the experience.

Debt

Because the vast majority of capital projects are funded with tax-supported bond proceeds, any discussion of the capital budget proposals needs to start with the Commonwealth’s debt picture. (The source of the data on the debt is the latest annual report of the Debt Capacity Advisory Committee (DCAC). Anyone wanting a clearly written explanation and discussion of the Commonwealth’s debt status can find the report here.)

Outstanding tax-supported debt of the Commonwealth more than doubled over the last ten years, from $10.6 billion (FY 2010) to $21.7 billion (FY 2019). This total is comprised of debt issued for general construction and for transportation facilities, as well as pension and other post-employment benefits liabilities. 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

Discipline in Schools? Who Needs Discipline in Schools?

New discipline-free zone?

by James A. Bacon

Speaking of legislation that never made it out of committee in the past but now could be unleashed upon Virginia (see previous post), there’s HB 256, a bill that would modify the state statute on disorderly conduct so that it does not apply on school property or in school buses.

This bill, introduced by Mike Mullin, D-Newport News, and passed by the House in a 61-to-37 vote, continues the trend of undermining the ability of public schools to maintain discipline. Undoubtedly the bill’s backers can cite anecdotal examples in which disorderly conduct represented overkill. Perhaps school districts need to review such cases and adopt policies to prevent abuses. But that’s no reason to categorically deprive schools of a disciplinary option for preventing violence.

Let’s remind ourselves of the definition of “disorderly conduct”: Continue reading

The Beauty of Workers Cooperatives: They’re Voluntary

Equal Exchange workers cooperative in Bridgewater, Mass.

by James A. Bacon

The Virginia Public Access Project has published a nifty list of bills that were killed in committee when Republicans controlled the General Assembly but have broken out to the House or Senate floor now that Democrats run the show. Most are dreadful, some are tolerable, and a few are even beneficial. One bill, HB 55, introduced by the General Assembly’s self-declared socialist Lee Carter, D-Manassas, is downright intriguing.

The bill would establish “worker cooperatives” as a category of cooperative associations. A worker cooperative is a stock corporation that conducts business for the mutual benefit of its employees. At least two-thirds of employees would be required to own membership shares, and members are entitled to one vote only. Profit would be allocated in proportion to the amount of work each member performed.

The House of Delegates passed the bill in a 62 to 36 vote. Yeah, it’s kind of socialist. No, it’s not my cup of tea. But if people voluntarily enter into such an association, what’s wrong with it?

That’s the beauty of a free society. People shouldn’t be forced to participate in the corporate, capitalist economy. I’m perfectly comfortable participating in such a society, but I can understand why other people wouldn’t be. And I think it’s great if we can create mechanisms —  be they hippie communes in the woods or worker cooperatives — that allow people to organize themselves to practice of business as they choose. Continue reading

Huge Dominion Pipeline Project Loses Partner

By Peter Galuszka

The delayed Atlantic Coast Pipeline is undergoing a major change due to rising costs and legal delays – The Southern Company, based in Atlanta, is backing out of the project as an equity partner.

According to an announcement late Tuesday, Dominion Energy will acquire The Southern Company’s 5% stake in the natural gas project whose cost has risen from $5.1 billion to $8 billion thanks largely to legal challenges by environmentalists and regulatory agencies. The new ownership structure will be 53% Dominion and 47% Duke Energy, based in Charlotte.

The Southern Company will be still related to the project as an “anchor shipper,” the announcement said.

Another surprise in the announcement is that the pipeline project will buy a small Liquefied Natural Gas plant in Jacksonville, Fla. Dominion will assume ownership of it from Southern. That raises questions because for years Dominion has vigorously denied that the 600-mile-long pipeline has any link to plans to export LNG. Dominion does own an LNG export facility at Lugsby, Md. on the Chesapeake Bay that exports LNG mostly to Asian utilities. Continue reading

Has Dominion Gone Full Climate-Change Warrior?

Pacific-islander climate change warriors

by James A. Bacon

As the Democratic-dominated General Assembly considers legislation to transform Virginia’s electric grid, Dominion Energy has issued a statement setting a formal goal of achieving “net zero emissions” of carbon dioxide and methane by 2050.

That’s not an easy thing to do for a company that hopes to expand its 14,000-mile natural gas pipeline network by building the Atlantic Coast Pipeline. Under Dominion’s long-range plan, CO2 and methane emissions will be offset through the capture of methane from hog and dairy producers and investments in electric school buses and electric-vehicle infrastructure, among other strategies.

“Our mandate is to provide reliable and affordable energy – safely,” said Chairman Thomas F. Farrell. “But we recognize that we must also continue to be a leader in combating climate change. … I am confident we can … help solve this challenge and leave the world a better place for future generations.”

A topic not mentioned in the press release was how much this 30-year transformation will cost electric ratepayers in Virginia. As Steve Haner has reported, State Corporation Commission staff has estimated that Governor Northam’s proposed zero-carbon legislation will boost retail electric bills by 20%. Continue reading

VA to Examine Company Payrolls, Hunting Bias

By Steve Haner

How bad is the climate for business in Virginia now? Just how much does this New Blue General Assembly detest and distrust evil capitalists? Let’s look at one little bill first noticed Monday in the long string of bills rushing toward Tuesday’s deadline for action. House Bill 624 won’t be the worst bill of the session, but it is very revealing of the new mindset.

Del. Chris Hurst, D-Blacksburg, sold this bill to the House of Delegates Monday with the common and debatable statistic that women earn 79 cents compared to every dollar earned by men. He wants the state to take on the role of ferreting that out worker by worker and devising a state-enforced solution. Doing so will mean $24 billion more paid to female Virginia workers, he claimed. Continue reading

Earmarks are Back

The capital projects section of the budget bill is often overlooked by the media. That has been especially the case this year, with all the major initiatives brought forth by the Democrats.

I am working on one or more submissions dealing with capital development, but, in the meantime, there is one item that deserves a post of its own. Deep in the back of budget bill (HB 30), in Item C-72, there lurks a proposal of dubious constitutionality involving a lot of money.

The Children’s Hospital of the King’s Daughters (CHKD) is a well-regarded, private nonprofit, free-standing children’s hospital in Norfolk. The budget bill directs that $33.4 million in tax-supported bond proceeds be provided for the construction of a 60-bed mental health hospital at CHKD. Continue reading

More Hospital Consolidation in Virginia…

Southside Regional

Bon Secours Mercy Health, a regional Catholic hospital chain, recently acquired three Virginia hospitals — a 105-bed facility in the City of Franklin, and a 300-bed clinic in Emporia. Neither Bon Secours nor the seller, Tennessee-based Community Health Systems, released any information about the transaction other than the fact that it took place, so we can only speculate about the reasons driving the deal. But we do know one thing: The Virginia hospital industry is more concentrated today than it was before the deal.

The Virginia Health Information website provides some clues. For a “nonprofit” health chain, Bon Secours is very profitable. Its four hospitals in the Richmond metropolitan region generated more than $1.3 million in net patient revenue (real money, not charges that are inflated then discounted for insurers) and operating income of $132 million in the year ending August 2018. Bon Secours does not pay taxes on that sum or pay dividends to investors, so it”s free to reinvest all of it as it sees fit.

One option might be to say, gosh, we’re a nonprofit hospital serving a community mission. Why not reduce our charges to patients? But that wouldn’t match the ambitious corporate goal to grow the enterprise. In January the company announced that it had filed for regulatory permission to expand its Hanover hospital by 44 acute care beds. In December, the chain announced regulatory OK for a 55-bed expansion in its Chesterfield County facility. Then, of course, it purchased the four Southside hospitals. Continue reading

Blue, Sweet Blue

Blue waves have consequences

By Peter Galuszka

The Virginia Democratic party’s stunning success in November’s General Assembly elections has, as promised, lead to some big changes, after, forward-moving legislation was stymied for years by GOP politicians, often in committee,

Let’s run through a short list of where the Dems have succeeded and what else can happen. I’ll keep this short given the detailed coverage other columnists have provided.

Guns: Big wins so far on one-purchase-a-month and universal background check. Some movement on “red flag” laws to allow law enforcement to temporary take away firearms from people deemed dangerous. Exactly how to define that remains to be seen. The Big Enchilada, however, is assault style rifle. Proposals would restrict new sales of them and limit their magazines to 10 or so rounds plus banning “bump stocks” that allow semi-automatic weapons fire just about automatically. Whatever happens, this is progress, since for years anything related to firearms got killed in committee with no real discussion.

Marijuana: It’s not time yet to run out and stock up on little bags or buy gummies with THC in them, but it is likely that possession will be decriminalized. Continue reading

SCC: Clean Energy Conversion’s Customer Cost

By Steve Haner

In the first ten years, Governor Ralph Northam’s signature zero carbon electricity legislation will add almost 20%, about $280 per year, to typical Dominion Energy Virginia residential bills. That was the low-ball estimate Sunday from a State Corporation Commission expert who quickly discovered that shooting the messenger is the normal General Assembly response to bad news.

Senate Commerce and Labor Committee Chairman Richard Saslaw, D-Fairfax, visibly scoffed as Kim Pate, the SCC’s director of utility accounting and finance, explained the SCC had no position on Senate Bill 851. She was there to talk about the likely consumer cost, just as she had earlier Sunday on other bills dealing with Dominion Energy Virginia’s massive offshore wind proposal. The last time this was in committee, no legislator even asked about cost.  Continue reading