Monthly Archives: February 2013

Legislators Cobble together Transportation Funding Compromise

Posted on February 20, 2013 by | 4 comments

House and Senate negotiators agreed upon a transportation funding package that will raise $860 million a year for roads, bridges, rail and mass transit when fully implemented. Governor Bob McDonnell hailed the agreement, implying that he would sign the legislation if approved by the both legislative bodies.

The package includes the following key elements:

  • Elimination of the fixed 17.5-cent-per-gallon gas tax, to be replaced by a 3.5% wholesale tax that will increase revenues as gas prices head higher.
  • A 0.3 percentage-point increase in the sales tax.
  • Diversion of $200 million a year in existing General Fund revenues on the logic that transportation is a “core function of government.”
  • Imposition of a $100 million annual fee on alternative-fuel vehicles to ensure that they contribute toward the construction and maintenance of roads.
  • A one percentage point increase in the sales tax on automobile sales, which currently enjoys a discount off the sales and use tax.
  • The levying of a 6% wholesale tax on diesel.
  • Designation of revenue, should it materialize, from the Marketplace Fairness Act, which would require online sellers to collect states’ retail sales tax.
  • Creation of a dedicated revenue stream (not clear what as of this writing) for Northern Virginia and Hampton Roads transportation needs.

The tax restructuring would be revenue neutral to Virginians in the first year but would increase revenues gradually in pace with rising gasoline prices and increased volume of retail sales, thus addressing the stagnating revenues from the gasoline tax. The compromise also establishes a precedent for McDonnell’s contention that transportation is a “core function of government” that will in the future compete with education, health care, corrections and other General Fund budgetary priorities.

Bacon’s bottom line: In the round robin of congratulatory press releases from the Governor, Lieutenant Governor Bill Bolling and House Speaker William J. Howell, there is no indication that there is any unfinished business to take care of. In other words, there is nothing wrong with transportation policy in Virginia that more tax dollars won’t solve.

Guided by the essentially socialist principle that, hey, everyone benefits from roads, so everyone should help pay for them, the compromise makes a hash of the user-pays principle for transportation funding.

The only consolation that a believer in fiscal conservatism and free markets can extract from this atrocious piece of legislation is the knowledge that, yes, we do need more transportation funding and this bill will provide it. But there is absolutely no assurance that the money will be well spent. Virginia still has no objective criteria for prioritizing projects on the basis of Return on Investment. The McDonnell administration has done absolutely nothing, zip, zilch, nada, to tie transportation planning to land use planning. No one has lifted a finger to improve the transparency and accountability of the Public-Private Partnership process. Furthermore, there is no justification in economic theory or as a matter of fairness to ask Virginians who do not drive (or drive very little) to subsidize those who do.

These are first impressions. I will have more to say in future posts.

— JAB

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Posted in Taxes, Transportation

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Virtuous Virginia?

Posted on February 20, 2013 by | 3 comments

Graphic credit: Jon Millward

In my never-ending quest for insight into social and economic differences between Virginia and other states, I stumbled across an unusually revealing data set. Blogger Jon Millward analyzed a database of 10,000 porn stars to build a profile of sex actors on a range of attributes from ethnicity to cup size. Among the data points he gathered was the porn stars’ self-reported place of birth. The largest percentage by far hailed from California (is anybody surprised?), followed by Florida and Texas, in numbers far out of proportion to their population. Other states paled by comparison, with Virginia barely registering.

Even Washington, D.C., a den of iniquity if there ever was one, appears as a mere pinprick in the porn star constellation.

But before you unleash your inner puritan and praise the Mid-Atlantic region for the relative virtue of its citizens, consider another piece of research by AshleyMadison.com, an escort service: No. 1 on the list of Least Faithful Cities, based on the number of sign-ups per-capita in its database, was… Washington, D.C.!

Downstate Virginians have no grounds to snicker about the perfidy and tawdriness of the nation’s capital. As it turns out, Richmond, Va., landed in 6th place nationally. Perhaps the main difference between the Mid-Atlantic and the Land of Nuts and Sluts is less our fascination with sex (a universal human preoccupation) than our desire for discretion.

— JAB

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Posted in Demographics

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Visa Reform and Farmville’s Private Gulag

Posted on February 20, 2013 by | 4 comments

By Peter Galuszka

Surrounded by coils of security wire, the cream-colored metal complex sits in a small valley just outside Farmville, 60 miles southwest of Richmond. On the ridges above the private Immigration Centers of America-Farmville detention facility, a row of signs warns: “No photos or filming.”

Inside the facility’s entry, just before the airport-style metal detector, displays in Spanish and English warn visitors of a strict dress code. Women’s shorts “shall cover customarily covered areas of the anatomy, including the buttocks and groin area, both when standing and sitting.” For men, muscle shirts and gang colors are verboten. Everyone must wear shoes.

The $21 million jail, opened two years ago by three Richmond businessmen with federal approval, has the feel of a gulag for Spanish speakers. The 1,000 or so detainees inside tend to be Latin Americans who arrived to take low-paying jobs and lack proper visa documents. Some may have committed crimes and await deportation.

Indeed, the ICA-America-Farmville facility is a touchstone of the thorny issue of illegal immigrants who number about 11 million in this country. The privatized jail was created a few years ago during the height of an anti-immigrant craze that was a battle cry for the tea party and some Republicans, such as Prince William County supervisor Corey A. Stewart, who promoted Arizona-style laws to make it easier for police to arrest people they suspect of being in the country illegally.

The mood, however, is shifting rapidly. Republicans are moderating their tough stances after Mitt Romney garnered only 27 percent of Latino voters in the presidential election. President Barack Obama made comprehensive immigration reform a highlight of his Feb. 12 State of the Union address. “Both sides realize that the Hispanic vote is very important,” says Michael Zajur, president of the Virginia Hispanic Chamber of Commerce. He hopes a comprehensive reform plan that allows illegal immigrants to become legal will be in place within two years.

The problem goes far beyond Latin American newcomers here to handle the dirty jobs that the American-born don’t want, such as washing dishes or working in poultry factories. The country’s most significant federal immigrant law, passed in 1952, didn’t anticipate the country’s drastic need for high-tech workers that American schools can’t supply. Policies for H-1B visas, which allow American businesses to temporarily hire foreign-born workers, limit annual admission to 60,000.

High-tech companies in Richmond and Northern Virginia are desperate for qualified engineers and computer experts. The situation, says Debra J. C. Dowd, an immigration lawyer at Richmond’s LeClairRyan law firm, has become so strained that employers take bizarre steps to meet their need for foreign talent.

Some West Coast technology companies, for example, couldn’t get visas for needed foreigners. So they leased a cruise ship and set it up with work stations, Dowd says. The foreign engineers worked aboard ship as it cruised just off the U.S. coast and came into port to attend business meetings. That way, the workers could get into the country as tourists and then return to the ship and sail off to safe waters again.

“It is a function of not being able to find the workers they need,” Dowd says, adding that it also speaks to the weakness of the American educational system. In another example, Facebook had to place 80 foreign engineers in Dublin, Ireland, because it couldn’t get visas for them to work in California, The New York Times reports.

Solutions to such problems include allowing more foreign workers in high demand into the country, speeding up the visa process and perhaps allowing guest workers in for extended periods.

A major sticking point is how to handle the 11 million or so people who are living in the country without legal documentation. Early attempts to address this issue, including an initiative by former President George W. Bush that was regarded as progressive, were shot down by hard-liners who demand deportation for illegal immigrants. Some say a general amnesty is the only answer. The Dream Act, first proposed in 2001, would allow illegal immigrants to stay in the country if they arrived as minors, graduate from high school and are of good moral character.

Obama appears to be taking the middle ground by proposing a clear path to U.S. citizenship for illegal immigrants, but cautions against placing them ahead of foreign nationals who already are here legally. With the growing power of the Latino vote, such proposals stand a chance of passing both houses of Congress.

Since Obama took office, some 400,000 people have been deported, although Dowd says that the Obama administration has been trying to limit deportation to people who have committed serious crimes. Others see the president as not moving very far with immigration. “He should stop the deportations,” says Isabel Castillo, a waitress and immigration rights activist from Harrisonburg, who says Obama is “hypocritical” for voicing support for reform but doing little.

Castillo is an example of how muddled the immigration bureaucracy is. Now 28, Castillo arrived in the United States without documents when she was 6 years old. In 2004, her stepfather petitioned for her citizenship, she says, but the waiting list dates back to 1993.

Should Congress vote for comprehensive reform, what happens to facilities such as ICA-Farmville and other privately owned detention operations in other states? One problem for the ICA-Farmville’s owners is that their success depends on a steady stream of prisoners being investigated by the Immigration and Customs Enforcement division, known as Ice, of the Homeland Security Department, or have been convicted of a serious crimes and will be deported. There will be a need for detention facilities, Dowd says, “but perhaps not as many of them.”

Farmville officials have said they like having the detention facility because the city can get paid $1 to $2 per day per prisoner in fees and it provides jobs.

The ICA-Farmville, built by Richmond businessmen Ken Newsome, Warren Coleman and Russell Harper, does not readily give out information about its operations. In the entrance way to the detention center, a man identifies himself as Jeff Crawford and says he’s the facility director, but declines to speak with Style Weekly. Repeated telephone calls to immigration officials in Fairfax and Washington weren’t returned by press time.

It may take several years, but comprehensive immigration reform could seriously impact ICA-Farmville’s business plans if not put it out of business. “You have plenty of serious criminals out on the streets,” Zajur says. “We have people who only want to better their lives. We don’t need to put those people in a facility like that.” 

Note: This post first appeared in Style Weekly.

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Posted in Business and Economy, Crime, Corrections and Law Enforcement, Federal issues, Immigration, Infrastructure, Labor and Workforce, Media, Politics

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Land Use and Tax Revenue in Fairfax County

Posted on February 19, 2013 by | 80 comments

Reston Town Center: highest tax revenues per acre in Fairfax County.

by James A. Bacon

Last year I published research documenting the vast discrepancy in property tax revenue per acre between commercial development in low-density versus  high-density settings in Sarasota, Fla. A mid-rise tower with retail on the ground floor and condominiums above could yield literally 100 times the property tax revenue per acre as a Wal-Mart. (See “The Fiscal Fix.”) What Virginia needed, I suggested, was more “tax literacy,” to borrow the phrase of Joe Minicozzi, whose Asheville, N.C.,-based Public Interest Projects, compiled the Sarasota data.

It turns out that a couple of enterprising young women in Virginia have conducted research showing comparable results here in the Old Dominion. I highlight one of those now: Alanna McKeeman, who performed an in-depth analysis of the Fairfax County tax base for her 2012 Master’s Thesis in urban planning at Virginia Tech, “Land Use, Municipal Revenue Impacts, and Land Consumption.” McKeeman now works as an Associate in ICF International’s Washington, D.C., transportation practice.

Massaging data on more than 357,000 properties in Fairfax County using ArcGIS software, McKeeman calculated the property tax revenue per acre for 159 categories of land use.  She published two sets of figures: “basic” revenue, based upon the then-current rate of $1.07 per $100 of assessed value, and “total” revenue that included special taxes and fees aimed at financing specific projects such as Route 28 corridor improvements and the extension of Metrorail to Dulles airport.

Click for larger, more legible image.

The chasm in revenues per acre is mind-boggling — high-rise condominiums yield literally 100 times more taxes per acre than single-family dwellings, which occupy over half the county’s land area. Unfortunately for Fairfax County, the highest grossing land uses comprise only a tiny fraction of the county’s land.

While tax revenues-per-acre soar with higher density, the cost of providing roads, utilities and other infrastructure does not. In fact, McKeeman cites a Brookings Institution study that found the up-front capital cost of installing infrastructure in high-density settings to be nearly half that of low-density settings, and the ongoing maintenance costs to be nearly 20% lower.

In her Master’s Thesis, McKeeman compared property tax revenues for Reston Town Center and Tysons Corner, two of the county’s major commercial centers. In Reston, high-rise apartments and condos generate property tax revenue as high as $2.8 million per acre — almost double the revenue from comparably zoned properties in Tysons Corner. While density may be the major reason for the discrepancy — the Reston apartment towers might be taller and contain more units, for instance — McKeeman suggests that other factors may be at work:

Clearly, the land and buildings in [the Reston] study area are quite valuable compared to County averages for the same land uses. Extremely high-value, dense housing and office space surround the Town Center, suggesting agglomeration benefits and perhaps a premium on the pedestrian accessibility of these properties to various amenities in the surrounding area. … The denser, walkable nature of Reston Town Center, combined with proximity to Dulles airport, appears to result in higher property values.

In other words, Reston is a walkable, mixed-used community and Tysons is not. Tysons grew not because of its hodge-podge pattern of low-rise buildings surrounded by acres of parking lots but because of its strategic location near the intersection of Interstate 66, the 495 Capital Beltway and other major arterials. In other words — and this is me speaking, not McKeeman — Tysons grew despite its dysfunctional land use patterns. The coming of the Metro may provide the impetus to reconfigure Tysons land use to a more tax-efficient arrangement but the cost of making that transition will run into the billions of dollars.

The link between Reston’s walkability and its higher property values remains a hypothesis, McKeeman cautions. Additional research or modeling is necessary before firm conclusions can be drawn.

House in Great Falls. High taxes? Think again. On a per-acre basis, Shady Grove homeowners pay less than Fairfax County’s trailer parks.

In another interesting close-up, McKeeman looks at the Shady Oak neighborhood in the Great Falls area bordering the Potomac River.  The average single-family home value in the area exceeds $1.5 million and the average lot size is almost five acres. Homeowners pay what they undoubtedly feel are high taxes — averaging $3,463 per acre. (At nearly five acres per house, that implies the average homeowner pays roughly $17,000 yearly in property taxes.) Yet on a per-acre basis, McKeeman says, Shady Oak homeowners pay less than property owners of Fairfax’s mobile home parks. Given the higher infrastructure costs per unit in Great Falls, her data imply that Fairfax’s property tax system is more regressive (tilted against those with lower income) than commonly thought.

To be sure, local governments must consider more than property tax revenue yield-per-acre when making land use decisions. For instance, McKeeman’s numbers do not include the sales tax generated by commercial property (although other studies suggest that including the sales tax makes a relatively trivial difference.) Moreover, the tax yield must be weighed in conjunction with the cost-per-acre of installing and maintaining infrastructure, public services and schools. On a per-acre basis, houses in Great Falls place a tiny fraction of the burden on public schools that a high-rise condo in Reston might. Bottom line, property tax revenue-per-acre is only half the equation. But it is an element that is almost entirely missing from the public discourse.

Among her policy recommendations, McKeeman suggests reforming property tax structures to incorporate long-term infrastructure maintenance costs rather than charging one-time impact fees. “Under such a system,” she writes, “two equally-valued properties with different demands on infrastructure and rates of land-consumption would not pay the same amount of property tax revenue.”

To rephrase her suggestion in the argot of Bacon’s Rebellion, property owners should pay their location-variable costs. The political reality is that potential losers from any proposed restructuring of property taxes would mobilize to thwart meaningful reform. But at the very least, Virginians should demand that local government leaders consider the property tax revenue-per-acre implications of their land use decisions going forward.

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Posted in Government Finance, Land use & Development, Taxes

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Show Me the Money, Virginia. What You’re Doing Is Not Paying Off.

Posted on February 19, 2013 by | 6 comments

Show me the money, Jerry.

by James A. Bacon

Virginians need to wake up and realize that scoring a No.1  or No. 2 ranking on Forbes Magazine‘s “Best States for Business” has very little correlation with actual economic performance. It’s a nice sobriquet but as Cuba Gooding Jr. said in the movie Jerry Maguire, “Show me the money.”

When it comes to such measures of economic well being as number of jobs created, wage/salary levels and growth in high-tech jobs, Virginia’s so-called Golden Crescent  is not exactly gleaming. According to the Milken Institute’s recently published “Best Performing Cities 2012,” the Washington region (which includes Northern Virginia) logged a very respectable No. 5 ranking among the nation’s 200 largest Metropolitan Statistical Areas (MSAs) in 2012, but Richmond came in at 68, Hampton Roads at 139 and Roanoke at 142.

If you deem Washington’s outlier performance as an artifact of unsustainable federal spending — the Milken report says that Fairfax County could lose 87,000 jobs, or 13% of its workforce, from looming budget cuts — those rankings for the locomotive regions of Virginia’s economy are not remotely consistent with the “best state” in the union for business.

For what it’s worth, Virginia’s smaller MSAs did turn in a respectable performance last year. Charlottesville ranked No. 11 among the 179 small MSAs tracked, Harrisonburg 22, Blacksburg 32, Danville 49, Winchester 67, and Lynchburg 72 — every one outperforming the national average. Notably, the top three are all college towns. Even Danville, which has long been the poster child for failing Southern mill towns, looks like it may have turned the corner. (Hat tip to Hamilton Lombard.) That’s all very encouraging but the smaller metros, collectively speaking, figure less than even the smallest of the big three metros (Richmond) in economic impact.

Bacon’s bottom line: As Tom Petty once crooned, it’s wake-up time. Unfortunately, everyone is still asleep. Outside of the most poverty-stricken regions of Virginia, I detect no concern that anything might be awry. I believe that the problem emanates from the top. The governor’s office (not just for the McDonnell administration but every administration preceding it) publicizes positive recognitions such as the Forbes Magazine ranking and positive developments such as new plant openings while downplaying the negative. The emphasis on good news is intrinsic to the office. After all, every governor wants to make himself look like a success, not a loser.

But the problem runs even deeper. The people serving four years in the governor’s office are rarely experts in economic development. They are largely captive to the state’s economic-development institutions — the Virginia Economic Development Partnership, the Tourism Office, the Department of Agriculture, the Department of Business Assistance and the like — whose career administrators (a) naturally and understandably want to put a positive spin on the job they are doing and (b) are unlikely to call for radical new thinking about economic development that might siphon resources to other priorities.

And even deeper… Virginia’s business and civic leaders are slaves to the mid-2oth century paradigm of economic development embodied in the “Best States for Business” methodology. Rather than push for more innovative approaches to economic development, they lobby for more spending on transportation, more spending on schools and higher taxes on everybody but themselves to pay for it. Virginia’s sluggish performance represents a collective failure.

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Posted in Business and Economy, Labor and Workforce

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Another Step toward Smarter Highways

Posted on February 18, 2013 by | 5 comments

The Virginia Department of Transportation (VDOT) has issued a $34 million contract to Pennsylvania-based TransCore to design and build an active traffic management system for Interstate 66. The contract will cover 34 miles of highway from Washington, D.C., to Gainesville, at the intersection of U.S. 29. Reports ITS International:

The active traffic management system will continuously monitor traffic and roadway conditions around the clock, collecting data using roadway monitoring equipment such as vehicle detection sensors and closed-circuit television cameras. The system will use such techniques as lane control signal systems, adaptive ramp metering, enhanced detection and camera systems, lane management systems, and queue warning systems. Active traffic management systems have been used throughout Europe for the last decade, but Transcore says this is a relatively new concept in the United States.

Benefits of the I-66 ATM system for motorists include: dynamic message and lane control signing advising motorists of incidents and delays by providing direction on lanes that are usable, and guidance on merging traffic; expanded use of shoulder lanes regardless of time of day in response to incidents and to manage traffic; improved monitoring of the roadway to provide quicker response by transportation, safety and law enforcement personnel.

Kudos to VDOT for aggressively exploring active transportation management as an alternative to laying more concrete and asphalt. As always, it would be useful for citizens to see a Return on Investment  justification for the investment. My hunch is that commuters will see a lot more benefit from this investment than from extending a single lane for a mile or two. But that hunch needs to be proven. If VDOT can nail down the ROI for smart roads, it will be able to justify more in the future.

— JAB

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Posted in Science & Technology, Transportation

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Pssst. PST Jobs are Growing in Virgina, Pass It Along.

Posted on February 18, 2013 by | 2 comments


by James A. Bacon

The occupational cluster labeled “professional, scientific and technical services” (PS&T) has been one of the fastest growing job categories in the United States economy since 20o1, expanding some 15% in contrast to a roughly 20% decline in such noteworthy clusters as manufacturing, media and finance over the same period, writes Joel Kotkin for NewGeography.org. That trend has been a positive one for Virginia — at least for the Washington and Richmond metropolitan areas, less so for Hampton Roads.

In an important modification to the line that I have frequently peddled here — that high-salary, high-skill jobs tend to gravitate toward larger labor markets — PS&T jobs have been moving to second-tier labor markets such as Jacksonville, alt Lake City, Kansas City and Richmond over the past decade. (See the list of the 50 largest metros in Kotkin’s blog post.)

Writes Kotkin: “Once considered the natural domain of megacities and dense urban cores, high-wage business service jobs, largely due to technology, can increasingly be done anywhere. This suggests that the playing field for such positions, rather than concentrating, will become ever wider. As the struggle for good jobs intensifies in the years ahead, expect the competition between regions to get even greater.”

Washington: Washington has the highest concentration of PS&T jobs in the nation, with a “Location Quotient” of 2.45 in 2012, meaning that it has 2.45 times the number of jobs as a percentage of population as the nation as a whole. While the percentage growth in the number of such jobs was relatively high — 26.1% — the intensity score increased only incrementally because the base was very high to start with.

Richmond: Richmond’s LQ was only 1.01 in 2012, a hair above the national average. However, job growth over the decade was robust, 28.9%, so the LQ rose by 9.8%.

Hampton Roads: Here we get another clue into the region’s sub-par economic performance over the past decade. PS&T jobs increased only 7.4% since 2001, and actually declined over the past two years. The region’s Location Quotient was .89, or one of the lowest in the nation.

Bacon’s bottom line: There’s no secret to the Washington region’s growth in PS&T jobs — the occupations are tied to the region’s strength in government-driven systems integration. The labor pool is so deep that the region has achieved critical mass, generating new enterprises that draw upon that talent, which in turn increase the need for even more PS&T workers. That dynamism overcomes the fact that salaries are higher than anywhere in the U.S. outside San Jose and San Francisco.

Richmond is more of a mystery. There is no single industry cluster that can explain the growth in PS&T jobs. It’s possible that the job cluster is so small that growth of a handful of organizations could account for the surge. I learned recently, for example, that the Richmond Federal Reserve Bank handles the lion’s share of IT management for all federal reserve banks across the country. Could job growth at the Fed, or another big employer like Capital One, have made the difference? I don’t know. Local economic development authorities should take a look.

Hampton Roads… I think we have a problem, folks. Not only do these jobs comprise a smaller slice of the economy, wage levels are lower. This is a strategically critical occupational category for any region, and local authorities need to understand the source of weakness.

Hat tip: Tim Wise

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Posted in Economic development, Labor and Workforce

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An Alternate Vision for the Fifty States

Posted on February 16, 2013 by | 31 comments

For those of you who believe that the geographic boundaries of the 50 states are the arbitrary and illogical constructs of history, consider the map above, drawn by Artist Neil Freeman. Freeman’s boundaries have the virtue of creating states with near-equal populations of 6.2 million each. His goal was to solve address the injustice of states varying in size and population from California to Rhode Island having an equal number of United States senators, a violation of the one-man-one-vote principle.

Of course, the boundaries would have to be redrawn periodically to reflect shifting populations, inevitably giving rise to gerrymandered states, and also vitiating the concept of the co-sovereignty of state and federal governments upon which the entire U.S. Constitution is built.

Personally, I’m not wild about the idea of Richmond being thrown into “Tidewater,” which extends almost all the way down to Charleston, including some of the poorest regions of Virginia, North Carolina and South Carolina. On the other hand, co-blogger Don Rippert would see the consummation of his dream: a state essentially consisting of the Washington metropolitan region.

Hat tip: Rebecca Tippett on the StatsChat blog.

— JAB

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The Blessings of Old Housing Stock

Posted on February 15, 2013 by | 15 comments

by James A. Bacon

Among the nation’s 50 largest metropolitan areas, Richmond and Washington have relatively large stocks of pre-1940 housing, while Hampton Roads has relatively little, according to data published by Wendell Cox at the NewGeography.org blog. As a rule, regions with the youngest housing stock are Sun Belt metros like Las Vegas, Phoenix and Orlando, while regions with the oldest housing stock are located in the Northeast: Boston, Providence and Buffalo.

The thrust of Cox’s blog post is to argue that “historically core municipalities” don’t all look the same: “For example, the core cities of Phoenix and Philadelphia have approximately the same population. Yet they could not be more different. Philadelphia has a long history, including a time as the nation’s largest city around the period of the Revolutionary War. Phoenix, in contrast, is a product of the post-World War II boom.”

One of the biggest surprises I found in Cox’s data is the utter lack of older housing in the historically core municipalities of Hampton Roads — only 1.1%. Actually, I can’t help but wonder if that’s in error. The City of Norfolk did bulldoze much of its pre-war housing in 1960s-era slum clearances, but there are still some older neighborhoods there, not to mention in the older, core cities of Portsmouth and Hampton.

Bacon’s bottom line: Here’s my question: Is a surfeit of old housing a good thing or a bad thing? I think it’s a good thing. But it’s not the housing, as much as the prevailing form of urban design when the housing was built. Most pre-1940 housing was built in compact, moderate-density communities on grid streets, often with appropriately scaled retail, professional and commercial buildings mixed in.

The Fan neighborhood of Richmond is one of the greatest, most livable neighborhoods in America. Most of it was built between 1900 and 1930. After going through a period of decay, the district has been thoroughly renovated. The streets, laid out in a grid system and dotted with mini-parks, are a pleasure to walk. Thanks to the mixed uses permitted in the neighborhood, the Fan is chockablock with restaurants, corner stores and professional buildings. For good reason, Fan residents are fan-atics about where they live. (I want to move back there sooooo bad!)

Admittedly, some older neighborhoods of Richmond, especially in the east end, are riddled with poverty and all it entails, including abandoned and uninhabitable housing. Clearly, small lots, grid streets and corner stores are no magical formula for prosperity. I would argue, however, that they do at least lend themselves to revitalization. Neighborhoods with good bones have the potential to become places where middle-class families want to live, which means that they will be gentrified eventually. Indeed, large swaths of Church Hill in Richmond’s east end have been salvaged, largely by households of young, educated professionals who place a premium on the near-downtown location and the architecture of the 19th-century houses, and who are willing to put in sweat equity and brave the hazards of living in high-crime neighborhoods.

By contrast, who is moving into Richmond’s aging, close-in “suburbs”? Poor people. There are some neighborhoods where no one else wants to live.Built in the 1950s and 1960s, these neighborhoods have nothing worth investing in, nothing worth salvaging. Thus, as the City of Richmond is progressively gentrified, poverty is leaking into Henrico and Chesterfield counties. Unless there is a sudden resurgence of middle-class demand for 1,500-square-foot ranchers on dead end streets, these forsaken neighborhoods will become the slums of tomorrow.

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Posted in Housing, Land use & Development

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Tidying up the Tax Code

Posted on February 15, 2013 by | 4 comments

Not exactly Saint George slaying the dragon… but it’s a start.

At last the General Assembly is doing useful, even if it’s not terribly consequential. The House of Delegates voted Wednesday to pass a bill that would strike 34 unclaimed tax credits from Virginia’s tax code. The bill, introduced by Sen. Walter Stosch, R-Glen Allen, would declare a tax credit obsolete if it hasn’t been claimed in five years, reports the Capital News Service.

By definition, the measure will have minimal impact on tax revenues. If no one is using the tax credit, it’s not costing the state anything… which probably explains why the measure passed 92 to 6. If nobody is benefiting from a tax credit, there’s nobody to lobby to keep it.

It’s refreshing to know that our ever-vigilant legislators are willing to make the tough call to eliminate tax breaks that nobody is using. Now, if only they would tackle the special tax breaks that people are using. Deleting those from the tax code, creating a broader tax base and leveling the level playing field would represent a real step forward.

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Posted in Taxes

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So, What Would Happen If Richmond, Like, Got Hit by a Killer Asteroid?

Posted on February 15, 2013 by | 10 comments

Asteroid 2012 DA14 is expected to pass 17,200 miles from Planet Earth today. What would happen if a splinter, say the size of a school bus, broke off and plummeted to earth at 12 miles per second, striking downtown Richmond?

You can get a glimmer from these videos on the Atlantic Cities blog of a kitchen table-sized meteor streaking through the sky near Chelyabinsk, Russia. But a school bus is a lot bigger than a kitchen table. Thanks to the good folks at KillerAsteroids.org, we can simulate the impact, as seen above.

The entire downtown area would be incinerated, and the better part of the city would be subject to a zone where “steel buildings are knocked over.” Tragically, the Third Street Diner, a genuine Richmond landmark, would be consumed in the blast. On a positive note, the entire apparatus of state government — including the General Assembly, if the asteroid hit during the session — would be obliterated. Don’t worry: Yours truly resides safely outside the blast zone, so Bacon’s Rebellion would continue publishing.

— JAB

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Posted in Disasters and Disaster Preparedness, Uncategorized

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Reports of King Coal’s Death Are Greatly Exaggerated

Posted on February 15, 2013 by | 4 comments

 By Peter Galuszka

It seems such a short time ago.

In the gnarled hills of Southwest Virginia’s coalfields, prominent Republicans Ken Cuccinelli, Robert F. McDonnell and others were on the stump for Mitt Romney. The key theme was how Barack Obama’s environmental rules were putting a stranglehold over the coal industry.

A little farther north in Ohio, Robert Murray, a strident conservative and head of Murray Energy,  was laying off coal miners and allegedly forcing others to attend a pro-Romney rally. It was, he said, a “drastic time” and they were in “survival mode layoffs” thanks to Obama.

Flash forward to now. While natural gas has eaten into King Coal’s share of the U.S. electricity market, the coal industry has managed to increase its exports of thermal product to Europe from 39.5 million short tons in the first months of 2011 to 51.1 million short tons in the same period of last year. The reason: while Americans enjoy cheap natural gas, Europeans are paying three times the normal rate for it.

Meanwhile, Bristol-based Alpha Natural Resources, which, to its credit, did not blame its losses last year on Obama, is expecting a bit of a recovery in the coal industry this year.

The firm lost $2.4 billion in 2012 as it suffered from big utility stockpiles thanks to a warm winter and competition from natural gas, but CEO Kevin Crutchfield expects some recovery in 2013. The firm also managed to double its exports of Eastern thermal coal to six million tons – part of the unexpected  European demand. Alpha took over troubled Massey Energy, based  in Richmond, in 2011.

As for Murray Energy, Obama must be doing a bad job at killing King Coal, because there are reports that Murray Energy is rehiring some miners.

True, there’s renewed interest in carbon dioxide rules that will impact coal and perhaps place it further out of marketability. But there export market is strong in Europe and Asian demand for coking coal may pick up.

Part of the problem, as Crutchfield notes, is that Central Appalachia, which includes Southwest Virginia, southern West Virginia and eastern Kentucky coalfields, is just too expensive for production, compared to Wyoming’s Powder River Basin or Northern Appalachia’s Pittsburgh seam.

All the complaining in the world about the EPA and Obama can’t change that.

Shameless self- promotion: My book, “Thunder on the Mountain: Death at Massey and the Dirty Secrets Behind Big Coal,” was reviewed by the New York Times Book Review on Feb. 10.

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Posted in Business and Economy, Economic development, Energy, Environment, Labor and Workforce, Media, Money in politics, Politics, Public safety & health, Regulations and Government Oversight, Science & Technology

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Fixing Broken Streams and Broken Dreams

Posted on February 14, 2013 by | 9 comments

The Bellemeade Walkable Watershed project aims to reclaim a damaged creek, create a route for kids to walk to school, and boost community spirit in a gritty, inner-city Richmond neighborhood.

by James A. Bacon

Bob Argabright got involved with Richmond city schools nine years ago when he volunteered to help two young students learn to read. It wasn’t long before he discovered that the challenges faced by inner city kids run far deeper than a difficulty with letters and words. As he delved deeper into their lives and their surroundings, his volunteer activity became a full-time vocation. Today, the retired paper industry executive is such a fixture at Oak Grove-Bellemeade Elementary School that children wave to him in the hall, call him by name and even run up to give him a hug.

“I think it’s totally unfair for a child to be born in the 23229 zip code and be set for life while a child born in 23224 has a low probability of success,” says Argabright. “Ninety percent of our kids say they want to be a rap star, an NFL football player or a beautician. We’re trying to show them other paths. … We’re teaching these children to dream.”

As unlikely as it might sound, Argabright is hoping that a few children might conceive the ambition of becoming an architect or an environmental engineer.

Making that connection would have been unlikely a year ago, when the students at Oak Grove-Bellemeade were attending the old Bellemeade Elementary School, an aged and decrepit school building that screamed urban blight. But this month they moved into a new, LEED-standard school building next door that is fresh, clean and airy. Every section of the school bears a name associated with the James River — the river bed, forest floor, forest canopy, and the like — to serve as inspiration for teaching about nature. Moreover, the city is moving forward with a project to restore the severely eroded creek behind the school with the aim of creating a community resource and a focus for environmental education.

The Bellemeade Walkable Watershed is a triumph of public-private collaboration, says Michelle Virts, deputy director of utilities. “It’s a great opportunity for the city to stretch our dollars.” The project is funded largely through a $187,000 National Fish & Wildlife grant to restore the creek, and a $60,000 Environmental Protection Agency grant to build a watershed coalition, but the city is chipping in land, public works money and staff time, while not-for-profits like the James River Association and the Alliance for the Chesapeake Bay are providing volunteers for clean-up and money for tree planting.

Perhaps the most intriguing aspect of the walkable watershed is how the community is leveraging a single project to advance multiple goals: stream restoration, environmental education, a community garden and a network of sidewalks and trails. By making it possible for hundreds of kids, many of whom live in housing projects, to walk or bicycle to school instead of ride the bus, the project, it is hoped, will ward off the obesity that plagues Richmond’s inner city.

Many educators, public officials and not-for-profits have contributed to the project. But Argabright is the thread tying the efforts together. “Bob is extremely active in the neighborhood,” says Virts. “He makes things happen.”

“Bob Argabright is totally on fire about this thing,” says Champe Burnley, president of the Virginia Bicycling Federation, who recalls meeting with him more than half a year ago. Argabright was thinking ahead to when the new route opens for children to walk and bike to school. How many poor kids own bicycles? Not many. Even back then, he was working the angles to rustle up some used bikes. He now has 300 (only some of which, he regrets, are suitable for children) sitting in a warehouse in anticipation of the day when they can be used.

Argabright is not one to claim credit. He sings the praises of everyone involved in the project, from Oak Grove-Bellemeade’s principle Jannie Laursen to Lara Kling with the Blue Sky Fund, which has raised $275,000 to fund outdoor nature programs for inner city schools, including Oak Grove-Bellemeade. He depicts his contribution mainly as showing up at community events, pushing to get things done and building a web of contacts linking corporate leaders with City Hall and neighborhood volunteers and activists. Says he: “What I’m doing is networking, doing what I’ve done my whole career.”

Re-greening Richmond

Two developments were key to making the project happen. One was construction of the Oak Grove-Bellemeade School, which opened its doors this year. Children from the old Bellemeade School, located right next door, moved in right away. Students from Oak Grove will transfer next school year. The 90,000-square-foot facility is state-of-the-art. But it’s one thing to teach a subject like science in the abstract to inner-school children who have seldom ventured outside their concrete-and-asphalt domain, and quite another to teach them in a natural environment. More.

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Posted in Education (K-12), Water-waste water

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One Less Obstacle for Prisoners Re-entering Productive Society

Posted on February 14, 2013 by | 5 comments

Getting a Virginia driver’s license is a breeze for most of us. But it’s not so easy if you’re in prison.

by James A. Bacon

State prison inmates seeking to re-establish a productive life in society will find that task a little less intimidating thanks the efforts of Governor Bob McDonnell. A partnership between the Virginia Department of Motor Vehicles (DMV) and the Virginia Department of Corrections (DOC) has expanded into 12 correctional facilities and processed 500 identification cards for inmates preparing for release, the governor announced today.

DMV Connect identifies individuals slated for release within a month and collects the personal documents and application forms needed to obtain Virginia ID cards. DMV employees travel to the correctional facilities to complete the forms using a portable laptop and camera.

McDonnell has made it a goal to reduce recidivism rates in Virginia. “One of the main reasons released offenders find themselves back in jail or prison is because it’s difficult to fit back into ‘normal’ life,” he said in a press release.  “Identification is necessary to confirm citizenship and identity. An official form of identification is also necessary to address basic needs such as opening bank accounts, entering public buildings and applying for jobs and benefits.”

Bacon’s bottom line: Normally, a story like this might have escaped my attention. But I have taken an interest recently in what Virginians are doing to reduce recidivism. Earlier this week, I visited Richmond City Jail and a halfway house in Richmond’s northside neighborhood. At the jail, I had a brief chat with Sheriff C.T. Woody Jr., who told me that McDonnell had visited the jail numerous times — a half dozen or more. The governor had spent many hours mixing with inmates and talking about their problems.

Undoubtedly, the governor heard the same things that I have been hearing on how difficult it is for inmates to plug back into society. Prisoners receive $25 and a bus ticket home, ill prepared to find housing and look for a job. Many end up in the same places, with the same crowds, that got them into trouble to begin with. Simple tasks like obtaining ID documents can be big obstacles, especially for men who never graduated from high school.

This is just a guess, but I can’t help but think DMV Connect arose from the Governor’s conversations with Richmond City Jail inmates. McDonnell also pushed legislation to restore non-violent felons’ right to vote and serve on juries, although a House of Delegates subcommittee failed to act on it. “While our administration has enacted the fastest and fairest restoration process in the history of the Commonwealth, it is still a burdensome process,” he stated in a press release last week.

I’ve been pretty tough on McDonnell for his transportation tax plan, which is nothing short of disastrous, but I have to give him credit for his quiet fight to help Virginia’s prisoners. There is little to gain politically from these initiatives. The governor is pursuing them because he feels they are the right thing to do. Having met some of the men who are trying earnestly to turn their lives around — to become better husbands, fathers and contributing members of society — and having heard the obstacles they face, I understand what McDonnell is trying to do, and I applaud him for it.

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Posted in Crime, Corrections and Law Enforcement

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State Budgets on Fiscal Crack

Posted on February 14, 2013 by | 2 comments

by James A. Bacon

The 50 states of the republic are conducting a fascinating, real-world  experiment in tax policy. The Democratic-dominated “blue states” are jacking up income taxes while some Republican-dominated “red states” are shifting the tax burden from income to consumption taxes. Which gambit will prove the most enduring path to prosperity?

Joel Kotkin, writing for NewGeography.com, sees the blue states as doubling down on a suicidal strategy that will drive out the middle-class and the well off, hollowing out their tax bases in the process.

If you’re part of the Silicon Valley or Manhattan wealth-creation clusters, it’s worth staying put no matter how high the taxes. But if your business is not tightly bound to an industry-specific ecosystem, you have every reason to flee. Between 2006 and 2009, Kotkin writes, California lost a net 45,000 taxpayers earning between $5 million and $300,000 a year.

“To be sure,” he writes, “the outward movement slowed during the recession, but more recently the pattern has reasserted itself. Last year, all ten of the leading states gaining domestic migrants were low-tax states including five with no income tax: Texas, Florida, Tennessee, Washington and Nevada. In contrast high-tax New Jersey, New York, Illinois and California suffered the highest rates of out-migration.”

Federal Reserve Board policy is propping up the blue-state economies right now, Kotkin suggests. Low interest rates are flushing money out of fixed-income investments into stocks and real estate, driving up prices, enriching the wealthy and creating a boom in capital gains income. (If you want to know why the income gap continues to widen during the Obama administration, you need to look no further. The Obama/Bernanke policy is immiserating small savers, who earning next to nothing on their bank CDs and money market funds, while enriching those who own stocks and real estate.)

Higher income taxes serve as an equivalent to what economist Suzanne Trimbath calls ‘fiscal crack.’ For a short period there’s euphoria, as tax revenues flow in and the economy seems to recover. Yet the real problems, such as inadequate private-sector job growth, are never addressed, and as the high fades, the state again faces a loss of jobs and people.

All bubbles eventually collapse. The Fed cannot maintain its zero-interest rate policy forever. Eventually, interest rates will rise, depressing stock and real estate prices. Blue-state tax revenues, which are disproportionately dependent upon cyclical revenue sources like capital gains, will plummet. And the blue states, having already driven out many productive taxpayers, will have nowhere to turn.

Virginia is sitting on the sidelines of income tax reform, content to keep its top rate at a moderate 5.75%. In a world in which high-earning (and taxpaying) individuals are as mobile as ever, the Old Dominion is positioning itself as neither a winner nor a loser.

Instead, Virginians are consumed by the need to raise tax revenue for transportation. The General Assembly has made the decision to raise taxes; the only question now is whether to go with the House version, the Senate version or some hybrid of the two. Unfortunately, the move to raise taxes is not accompanied by any effort to demand more accountability for the transportation dollars we spend. By enacting higher taxes to pay for projects offering dubious economic payback, Virginia is inching toward the blue-state governance model. We don’t have the worst tax regime in the country, but ours is far from the best.

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Posted in Business and Economy, Taxes

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