Tag Archives: Stephen D. Haner

Love Is A Juicy Tomato, A Ripe Melon

“We as a country have fallen out of love with healthy fruits and vegetables.”

Dominic Barrett said that while sitting at a picnic table a few feet from an acre of healthy fruits and vegetables, a new urban garden in the heart of Northside Richmond created by Shalom Farms.  The location is in my neighborhood beside my normal walking path.  Looking for a story I asked Barrett to meet me there and talk.

Turns out the story is there is no big story, and it’s told from time to time.  This is another example of Richmonders (Virginians, Americans) seeing a problem and doing something about it.  No fuss, no muss, no parade permits, no angry tweets.  The non-profit farm was stared a decade ago as a United Methodist urban mission, has spun off and is now approaching $1 million in annual budget, its staff supplemented by thousands of volunteer hours.

Dominic Barrett, Executive Director Shalom Farms

While official statistics indicate that only one in ten of us eats enough healthy fruits and vegetables, Barrett and his group have plenty of customers for their produce.  Nobody has fallen out of love with fresh-picked tomatoes or corn. Shalom Farms sells product at discounted prices from a “Grown to Go” truck which stops at 11 locations in the city (the stop I saw was bustling), through Richmond Healthy Corner Stores, and give much of it away through a network of other distribution points.

They measure their 2017 output as about 550,000 “servings.”  They also offer food preparation classes, have visitors out to their larger 12-acre farm off Virginia 288 in Powhatan County, and for a few people offer a personalized prescription produce plan to restore health.  A key partner is Health Brigade, formally known as the Fan Free Clinic.

Click on Image for Annual Report

The stories about “food deserts” often fail to mention that decades ago home or neighborhood vegetable gardens or fruit trees were common, even in the city, supplementing purchased food.  This time of year, people were awash with produce grown, given or traded.  At least some of the bounty was then canned or preserved in some other way.  Modern distractions, growing incomes, sprawling supermarkets – all have had a hand in the decline of home gardens.

And of course, as Barrett lists as his biggest lesson from his time in the work, farming is hard and risky.  Why risk a failure from weather or insects when stores have abundant supplies?  But big stores are rare in parts of the city, while cheap and attractive unhealthy food choices are everywhere.  Barrett reported that the group has strong relationships with grocery chains in the area, who do not see Shalom as competition.

The farm on the Westwood Tract inside the city has generated no controversy, Barrett reported.  Five acres are rented from Union Theological Seminary and sit on the edge of a large park-like expanse which is actually at risk for future development.  Many neighbors would prefer the farm to 300 more apartments.

Shalom Farms follows organic practices and has been certified as a natural grower but has not taken the steps (which can be expensive) for official organic certification.  Nor does it preach the Gospel of Organic that discourages people from commercially-grown or even canned or frozen vegetables or fruits.   Fresh is great, local is great, but it’s all better than most prepared foods, so enjoy.

There are aspects of the nutrition challenge Shalom Farms leaves to others, despite what Barrett called “the temptation to be all things.”  The mission is not to rekindle the practice of home gardening, or to feed mass numbers of people.  Like millions of other Americans, they do what they can for those they can reach.  As I said, no big story, nothing new here, but a welcome reminder that more good is being done daily than most realize, and we don’t celebrate that enough.

Specific Updates: Lobbyists, Lottery, Tuition

A few updates, clearing the decks before I disappear next week (I’m not quite as dedicated as Bacon, although I will take the laptop to Duck.)  My son who blogs on University of Virginia sports is going to give me some tips.  (StLouisHoo or something like that…)

Specifics on Who is Not Specific

The Virginia Public Access Project (VPAP) has once again demonstrated the power of a good chart (see above), this one tracking the number of 2018 disclosure forms filed by lobbyists which list bill numbers, and frankly it is a lower percentage than even I realized.   Absent any corrective action by the existing oversight committee or legislators, who are probably not motivated to require more disclosure, the number of disclosure forms listing bills by number will drop further.  No consequence, no change.

If the situation changed, you can see on VPAP the potential for a real tracking system where you could see which companies or associations weighed in on which bills.

Specifics on Who Plays the Lottery

Source: Virginia Lottery

A request for additional information on lottery spending or lottery frequency by income category, following my earlier report, drew a response from the Virginia Lottery that the information is not available.  Perhaps it is a question they do not want to ask or a survey crosstab they do not want to see.

My query did produce some additional data on who plays which games.  It was interesting that those with the lowest level of education, the 12 percent of respondents who didn’t finish high school, are least likely to play and of course least likely to have much discretionary income.  (They are underrepresented in the sample, however.)  People with a high school diploma but no college are the heaviest players of daily games and scratch games, which as noted earlier produce the most revenue.

Additional data was sent on the purchase of lottery tickets by automatic debits or charges, called a subscription in their terminology.  That approach to playing is most popular in the more economically healthy and urban regions of the commonwealth.

Source: Virginia Lottery

They did push back a bit on my assertion that the purchase of U.S. Treasury investments to cover deferred future payouts is another way the house wins, and correctly pointed out the state lottery doesn’t gain any benefit from that.  Yes, in that case I was using the term “the house” to mean government in general, including the federal government, which most certainly benefits from this steady market for these securities.

Specifics on Higher Education Inflation

You read it first on Bacon’s Rebellion a few weeks ago, but the large increase in the tuition and fees bills for this coming term at the state’s public colleges and community colleges is now fully detailed in the official release from the State Council of Higher Education.  The Richmond Times-Dispatch coverage is here.

Somebody Must Think We’re Stupid

David Poole and his team at VPAP have provided another illustration of how the reporting requirements placed on lobbyists at the state Capitol are intentionally vague and useless.  The chart above deals with the reports on lobbyist compensation.

This is usually the figure at the heart of the occasional stories about the amount spent by an individual company, or the gross amount spent on lobbying by all who file these forms.  But in practice almost nobody reports in full what they are paid, and they of course do things other than lobbying with their time.  So they pro-rate their fee and salary and report only a portion of it.

Who draws the line?  Who picks the formula for pro-rating the time? The lobbyist or the principal do so for themselves and are never asked to report their rationale.  That’s why comparisons are impossible – some report 5 percent and some 100.  Partly there is the natural reluctance everybody has to reveal their income, but there is also a reluctance to stand out as a big spender on charts like those produced by VPAP or in a news story.

A Peek Inside the Process

Years ago, one of the best lobbyists I ever worked with, a fine lawyer, instructed me that only the time I spent talking or writing to a legislative or executive branch official about a specific bill or vote was lobbying.  The time I spent researching the issue, drafting legislation or talking points, driving to the meeting, sitting in the anteroom – none of those hours, the bulk of the time, constituted lobbying.  The ten or fifteen minutes in the room, that was the only actual lobbying.

This all flows back to the very narrow definition of lobbying in Virginia law, which does not get into indirect lobbying or grassroots lobbying or lobbying preparation, all things that come up when companies are deciding what is and isn’t lobbying for federal tax compliance purposes.  This situation is too ridiculous to be accident or oversight, and extremely convenient for both the lobbyists and the lobbied.

Compensation is not that relevant.  What matters far more, the real glaring gap in the reports, are the details about what specific subject matters, bills, budget amendments, gubernatorial appointments or procurement decisions are being influenced.   The shameful gaps in the reports include loopholes that allow expensive dinners, gifts or entertainment to be given with no recipients named, or money to shuffle between various entities under the guise of some unregistered coalition.

Also, the full extent of grassroots or indirect efforts needs to be revealed.  More and more issues now spark television, direct mail, phone bank and other campaign style communications efforts, and every dime spent on those should be just as transparent as if they were being spent on a candidate.

One area where compensation should be reported in full is when the client is the government.  Beyond that, we need to focus on those other more important failings in the current non-disclosure disclosure regime, although this contribution by VPAP is useful in demonstrating that somebody out there thinks we’re stupid.

Will Dominion Appeal Latest Loss At SCC?

Daily Press photo of Yorktown Power Station

Michael Martz has a good report in this morning’s Times-Dispatch on the State Corporation Commission’s opinion trimming Dominion Energy Virginia’s proposed transmission charge.  The SCC ordered the proposed Rider T going into effect next month reduced to reflect the lower federal income tax rates.  It also rejected the utility’s argument that a payment it was receiving from the PJM regional transmission entity was a generation cost it should be allowed to book against base rates instead of against Rider T.  Booking it against base rates would in effect make it profit.

The payments are made because PJM asked Dominion to continue operating its Yorktown plant for reliability reasons.  The SCC wrote: “Legally, these payments are part of the PJM Transmission Tariff, which explicitly states that — in this particular instance — the generator is providing a “transmission service” for which PJM is assessing “an additional transmission charge” of $12.7 million. Accordingly, the Commission finds that both (1) the charges assessed, and (2) the payments made, by PJM under the PJM Transmission Tariff for this transmission service shall be reflected in the Subsection A 4 revenue requirement.”

As the biggest beneficiary of that increased reliability, Dominion is actually providing about half of the money to PJM which is then repaid to Dominion.  How does it collect its share?  In Rider T.  These are all transmission dollars.

The adjustments ordered by the SCC will save more than $2 per month on the mythical 1,000 kwh residential customer bill.  The question now is, will Dominion appeal the decision to the friendly Supreme Court of Virginia?  In its final written arguments to the Commission it pointed to the legislative provision (which of course it wrote) that these costs are on their face “reasonable and prudent.”  Reading the SCC opinion (not yet up on its website) it is obviously laying the groundwork for its argument in any possible appeal.

If the appeal is filed it will have little to do with this issue and a great deal to do with the battles to come over Dominion’s massive grid investment plan, just getting underway.   The tax issue involved more money, but the argument over the payment from PJM for maintaining operations at the Yorktown power plant goes right to the heart of the legislative declaration of “reasonable and prudent” and the utility’s game of moving costs back and forth between base rates and rate adjustment clauses when it improves its bottom line.

Previous Bacon’s Rebellion posts on this issue can be found here and here.

Sport of Kings Needs Peasants Playing Slots

Horse Race Slot Machine Circa 1937 (Not What’s Coming Now)

The Sport of Kings apparently cannot survive today unless between races the peasants are pumping their copper into slots.

“The new law acknowledges what several other horse racing states already have concluded: that the new economic realities to sustain a viable horse racing industry require an alternative form of gaming to offset the high cost of live racing,” writes industry advocate Jeb Hannum in today’s Richmond Times-Dispatch.

The column hit print two days after a Virginia Racing Commission (VRC) public hearing on implementing the proposal approved by the 2018 General Assembly to allow up to 3,000 “historical horse racing” machines.  No machine was on display during the meeting, and the commission apparently wants to see one before making some decisions. 

“I want to see one of those machines sitting right down here. I want someone to explain exactly how that machine works. And why it’s not a slot machine,” said Commissioner I. Clinton Miller. “I want to be able to look people in the face and say ‘This is different. This is not Charles Town. This is not Las Vegas.’”

Looks like a slot machine to me.

Taxable Wager Data from VRC Annual Report

All of this is rehash but Bacon’s Rebellion adds value. Pari-mutuel gambling has been legal in Virginia less than 25 years, making it slightly younger than the far larger and more ubiquitous state lottery. According to the VRC annual report, total wagering (the licensed kind) since 1996 is slightly under $3 billion, far less than the $37 billion taken in by the state lottery.

The placement of Colonial Downs in New Kent, instead of far more populous Northern Virginia or vacation destination Hampton Roads, ranks as the one of the dumbest economic development decision of the age. Revenue was anemic and declined rapidly after the recession of 2008.

Colonial Downs closed the track and eight off-track betting facilities in 2014, and only limited racing has taken place at other locations, detailed in the report.   Virginia Equine Alliance, Hannum’s group, has since opened three satellite wagering facilities of its own with three more planned.

Those spread the revenue to localities. Before its collapse Colonial Downs was sharing revenue with nine localities, peaking at about $1.4 million in 2006 and 2007. Last year six localities received almost $400,000 in revenue, most of it for New Kent. The localities attending the hearing Tuesday clearly want plenty of local machines.

But technology is changing. Starting in 2004 “advance deposit wagering” by internet or telephone was allowed and almost $800 million in bets were placed that way through 2017, the largest source of revenue since the track closed. Four different websites are linked to the VEA website, with this as a fair example. With the Virginia Lottery happily taking bets via subscriptions online, that will be next for horse-race gambling.

Two more interesting links for background: the key roll calls in the House of Delegates and State Senate on House Bill 1609, which authorized the expansion into machine gambling. They too were placing a bet that Virginia’s voters are less antagonistic to gaming by machine than in the past.

Working? A Republican Anti-Poverty Plan Works?

Source: IRS.gov

“The federal EITC, together with the Child Tax Credit, lifted nearly 200,000 Virginians out of poverty each year from 2011 to 2013, including nearly 100,000 children.”

Lifted out of poverty.  Let that sink in a minute.  The writer of that sentence is admitting that the federal Earned Income Tax Credit lifts people out of poverty.  And it wasn’t even part of President Lyndon Johnsons’ Great Society but was enacted in the era of GOP Presidents Richard Nixon and Gerald Ford.

I lifted the sentence out of a report on the website of the Commonwealth Institute for Fiscal Analysis, which was called to my attention by a piece  distributed this morning by Virginia Mercury.  The people at the Commonwealth Institute also recognize that Virginia is poised for a long-needed discussion on tax policy, thanks to the opportunity provided by the major changes at the federal level.   It would be a perfect time to discuss again a refundable state version of the EITC, which the state has resisted because of the cost.

The federal EITC is refundable, meaning if the taxpayer has not paid in as much in taxes as the credit, the unused balance of the credit is paid out in cash just like a refund.  Virginia’s EITC is just a credit, and if the credit is larger than the tax owed the tax bill goes to zero but there is no cash-back refund.

The 2018 General Assembly defeated the most recent effort to convert the credit, House Bill 716.  The fiscal impact statement put on an incredibly high quarter-billion dollar price tag, which I suspect is wrong.  If it is not inflated, Virginia should be ashamed it is taking that much tax away from low-income families.

The Commonwealth Institute report noted that just over 80 percent of eligible Virginia taxpayers are claiming the federal credit, meaning almost 20 percent are ignoring it.  Even without converting it, it probably makes sense to get more people to file.  The size of the credit is tied to income and family size, and it’s possible many of the people taking a pass wouldn’t have much of a credit anyway.

When it suits some advocates for low-income programs, they ignore the real value of existing efforts that do provide cash or services to that population.  Note that the child tax credit is also mentioned as important, and other programs not listed keep people above abject poverty abound, supplemented by private efforts. Do the poor have it easy in this country?  Hardly.  But the entire picture needs to be seen.

As Virginia stumbles quietly toward a tax debate over whether and how to conform to the new IRS rules, a state refundable EITC deserves to be one of the big ideas.

Lobbyist Forms Not Mentioned At Council Meeting

A Peek Inside the Process

The state’s Conflicts of Interest and Ethics Advisory Council met Tuesday making no mention of  my column published in July 21’s Richmond Times-Dispatch, pressing for specific bill numbers, budget item numbers and other details on the state’s lobbyist disclosure forms.  I had been told in advance the issue wouldn’t be added to the agenda.

In fact the council’s meeting lasted less than 30 minutes, had no business items, and the only vote was on previous meeting minutes.  Those minutes reveal that the June meeting’s big decision was to approve a staff suggestion to add student loan balances among debts disclosed by public officials.

I don’t want anybody to think I’m making up the complaint that the forms disclose nothing at all, despite a direction to be as specific as possible, so I pulled a few examples at random.  Who owns up to working on which of the 3,722 individual pieces of legislation at the 2018 session?   

As previously noted on July 9 most of the filings lack specifics and the Conflict of Interest and Ethics Advisory Council has sent signals this is acceptable with its published examples.

Loudoun County Chamber of Commerce: “Business Issues.”  Well, that narrows it down to 600 or so bills.

Virginia Chamber of Commerce: “Executive and Legislative Actions and Procurement Transactions.”  I looked at this a few times before I realized it simply repeated back the phrase from the question.    

Mecklenburg County: “Matters involving issues affecting local government.”

Fairfax County Water Authority: “Matters of interest to the Fairfax County Water Authority, including but not limited to, issues arising under the Virginia Water and Waste Authorities Act.”  But not limited to. 

Norfolk Southern Corporation: “All matters affecting Norfolk Southern Corporation.”

City of Norfolk: “Local government.”

Virginia League of Conservation Voters: “Matters related to land conservation, land use, energy issues, and transportation financing.” Continue reading

The Underground Saga Continues: I-66

October 2017: Legislators and Prince William County supervisors announce support for an underground transmission line paid for almost in full by other people’s constituents. U.S. Senate nominee Corey Stewart is second from left, Hugo fourth from left.

The saga of expensive underground transmission continues:  Now comes the Dominion Energy Virginia 230-KV line along I-66 which is needed for an Amazon facility and the growing data center industry. The State Corporation Commission has signed off and reports in the order a cost of $170 million or more to build it.

Every step in this process has been heralded by press releases from Delegate Tim Hugo, R-Centreville, who sponsored legislation to order the SCC to approve the underground approach, which then became a major chip in the poker game behind the 2018 Dominion Energy legislation. The power line to serve the data center was first opposed outright, and then the push was to bury it. The parties reached an agreement on this route a few months ago.

“Now that the State Corporation Commission has accepted Dominion’s application, western Prince William County residents can be assured that the Haymarket power lines will be buried,” said Del. Tim Hugo, R-Centreville, in  a release Friday. “This community-led effort, which I was proud to contribute to, will ensure the quality of life in western Prince William County is maintained. Last year, I promised to pass legislation to bury the power lines, and working together, we did.”

The SCC estimated the cost of the 5-mile overhead project, which includes a new substation, at $51 million. So, that’s our cost to deliver reliable power in that region to Amazon and others, and $120 million extra is charged to maintain the lustrous beauty of I-66 through three miles of the  route. Much of the route east of Haymarket is lined by subdivisions and 100-foot towers would be hard to miss.

Again, as with the previously-discussed plan to place 4,000 miles of small residential tap lines underground, the cost is paid by all company ratepayers,  it is paid off over a very long period with a comfortable profit margin, thus the final all-in cost is more than twice the initial window sticker. As seems to be the rule now and not the exception, the General Assembly and Governor overruled the decision made by the commission to go with a lower-cost option. What the SCC “accepted,” to use Hugo’s word, is its reduced circumstances.

Utility transmission improvements should be paid for by ratepayers across the system, but the trade-off is that the regulator should be zealous about demonstrated need and reasonable cost. The idea is to prevent the raw political horsetrading on display here.

The neighborhood underground program is paid for with a special rider on everybody’s bills, Rider U, but this Haymarket transmission project will eventually be incorporated in the larger Rider T. The enactment clause in the 2018 bill that ordered the SCC to approve the underground approach also authorized a second “pilot project,” yet unnamed (a card still face down on the table.)

A powerful precedent has been set and those two projects may be followed by more. Large overhead power lines are very unpopular and the path to force them underground has been found. The added cost also adds profit for the utility. This is just another skirmish in the overall battle plan to leave the SCC and anybody else putting consumers first dying in a ditch.

Want more evidence? I commend to your reading a report in the Times-Dispatch that, buried in the recent 200-plus application by Dominion Energy Virginia on its grid enhancement plan, is a request to avoid any cost-benefit analysis of that at all.

The Tax on the Mathematically Challenged

Pick 3 Game Frequency

Untold thousands of Virginians just poured their money into the recent multi-state Mega Millions drawing won by someone in California.  Governor Jerry Brown sends his thanks for his cut.  But based on a recent news release our own governor is also very pleased with the performance of the Virginia Lottery as it approaches its 30th anniversary.

As with any other game of chance, the house has many ways to win.

Years of debate in the General Assembly led to a November 1987 lottery referendum, which passed with about 57 percent in favor.  The games started less than a year later.  According to information on the Virginia Lottery website, and plugging in the unaudited totals from fiscal year 2018, over 30 years the lottery has:

  • Received from players $37 billion in cash (sales).
  • Returned about $21 billion of that back to players in prizes. The net after taxes is not reported, so that might really be about $16 or 17 billion.
  • Transferred about $12.5 billion to the state earmarked for education (but there is no proof local schools are better funded than they would otherwise be.)
  • Spent about $2 billion on its own overhead and advertising and  another $2 billion on compensation to retailers. (State and local taxes gets a cut of that, too.)

Neighboring lotteries were rare initially, but now all surrounding states have joined in taxing people who don’t understand probability. Maryland has taken the additional plunge into casino gambling.  Strip away the masquerade and Virginia is right behind with the new “historical horse racing” which will allow 3,000 slot machines.

This has become a big business, more than twice the size of Virginia’s liquor sales through the ABC.  The bare-bones cash flow summary on the Virginia Lottery website is supplemented by details in the annual reports and survey information provided to Bacon’s Rebellion upon request.

With all the attention given to the large national lotto games, the bulk of Virginia’s revenue comes from the scratch-off games and the daily Pick 3, 4 or 5 games intended to mimic the illegal numbers racket.  Last year’s annual report stated the scratch-off revenue represented 56 percent of sales and the simple numbers games 30 percent.

Regular market surveys are based on a rolling 100 interviews per week or 1,300 per quarter, a very strong methodology, and you can see a recent report here.  If indeed 70 percent of adult Virginians have played in the past year, that’s about 4.6 million individuals.  That puts the annual average revenue per player at $465, but of course most of players spend far less.

Which means quite a few Virginians are spending far more.  Who are they?  How much do they spend? The data shared does not include that, but there are some hints. Continue reading

Ratepayers Cover $760,000 Line for One Customer?

Highest cost projects from DEV underground line program phase three,with lifetime revenue requirement from ratepayers. Source: SCC pre-filed testimony.

The State Corporation Commission staff audit of Dominion Energy’s ongoing effort to place residential and small business electric service tap lines underground has turned up some expensive examples.  A handful of lines will cost ratepayers hundreds of thousands of dollars over time to serve a single residence.

The average cost for the first 18,000 customers getting new lines is about $50,000 each based on my own calculation.

Those are the all-in costs for planning and constructing the lines, then adding the interest cost or profit margin depending on how the utility financed it. The projection uses the current 9.2 percent return on equity. The money is collected over the estimated useful life of the new lines, about 40 years.  For phases one, two and three the total cost with financing is about $921 million, according to the SCC staff analysis.

The SCC staff compared the full capitalized cost of installing the highest-cost lines to home values.  “This means it is possible in some instances that the company could have purchased the customer’s homes at a lower cost than undergrounding their tap lines,” testified David J. Dalton of the SCC staff.

This program to expand underground lines is something else paid for with a specific monthly charge on everyone’s bill, a rate adjustment clause known as Rider U.  It is also something else that the General Assembly has deemed to be in the public interest and virtually off-limits to SCC challenge.

Photo: Dominion

The annual review of the program to adjust the billing charge is underway now and was the subject of a hearing at the SCC Tuesday. With big questions settled by the legislature, the discussion is focused on minor issues such as accounting changes or how the costs are allocated between various classes of customer.

The largest industrial customers are exempt but everybody else under the SCC’s jurisdiction pays, including the 600,000 customers who already have underground service (and paid for it themselves) and the unknown number who will never get underground service.  For that mythical average residential customer using 1,000 kwh per month, the current charge is 55 cents per month and Dominion is asking to raise it to $1.98 as of next February.

The legislature has authorized this to go until at least 2028, and Dominion expects to place 4,000 miles of lines underground in 12 phases at a direct cost of $2 billion and a fully-capitalized cost of almost $6 billion.  At that point the residential charge will be more like $5 per month.  The charge for commercial or small industrial customers was not reported.

Spending other people’s money is very popular.  The record on this case includes favorable comments from Senator Glen Sturtevant (R-Richmond), Delegate Vivian Watts (D-Fairfax) and several local officials where the program is active.  A spokesman for the American Red Cross attended Tuesday’s hearing in person to testify about that organization’s support, noting how wonderful it is not to have your power go out.  At the end he said his own house has already been upgraded under the program.

Continue reading