commonwealth of virginia, community development, economic development

 Volume 02 • Issue 22 June 2, 2003 

  

Bacon's Theorem:

P = (I - T) C 

What’s It all About, Alfie?

 

There's more to life -- even political life -- than low taxes. People want prosperity, which includes higher incomes and a lower cost of living.  


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Now we hear that Gov. Mark R. Warner is putting off announcing the particulars of his tax restructuring initiative until after this year’s legislative races. Big mistake. The governor may avoid turning the November election into a partisan referendum on his proposals, but he still may not like the result. Pumped up by electoral victories last year, the anti-tax wing of the Republican Party is moving into the rhetorical vacuum. The insurgents are eager to turn the election into a referendum on their no-tax-increase agenda.

 

Virginians desperately need to engage in a conversation over the structure and level of state and local taxes -- but that's not the debate we're likely to get. As the discussion is shaping up, the rebels will argue for tax cuts, citing the steady growth of state and local government spending through the 1990s. Their opponents will squirm and wiggle – no one will actually endorse tax hikes publicly -- while noting under their breath the need to fund priorities such as education and transportation. In sum, fall 2003 will become a re-hash of the same, tattered raise-taxes-no-cut-them palaver we’ve been hearing for the past decade.

 

Totally absent is any recognition of the complex interplay between taxes, incomes and the cost of living. What Virginians crave most isn’t lower taxes, I would argue, so much as higher income after taxes. Citizens hate income tax hikes because they reduce disposable income. Cutting taxes is popular because it puts money back into peoples' pockets. But there are other ways to bolster disposable income: (1) raise wages, salaries and profits, and (2) lower the cost of living so peoples' incomes buy them more.

 

In theory, then, investing $1 billion in education, transportation or other state programs that boost economic productivity would be worthwhile if it bolstered profits, wages and salaries by, say, $2 billion. Likewise, investing $1 billion in revamping the state Medicaid program would be worthwhile if it reduced Virginians’ medical insurance premiums by $2 billion.                                                                                            More >>   

                                        


Koelemay's Kosmos

Here Comes the Sun

The sun finally shined on Virginia this week, and lots of new mothers may be naming their baby boys Ray.  

   

It is almost impossible now to remember the drought conditions in Virginia a year ago. Creeks and rivers dried up, reservoirs shrank, dust and sun scorch were everywhere. Mouths got so dry that tongues stuck in cheeks. One thing Virginians learned for sure in sun-dried 2002 was the simple truth that the heat, not the humidity, was responsible for their misery.

 

But that was before six months of wet, wet cold, wet cool, just plain wet. Something happened in the autumn season last year that shoved the sun and the dry days into the shadows. It rained and snowed, rained and stormed, rained and drizzled so many times that Virginians started counting their animals by twos. How bad was it? Some Dads stopped calling their boys “Son.” How bad? Cheerleaders lead crowds with shouts of “Ra, Ra.”

 

By the first day of June 2003, an AOL online “American Pulse” poll had over 1.5 million Internet users responding to a question as to how they would characterize their spring: 59 percent said “soggy,” while only 23 percent answered “sweet.” The 16 percent who answered “sweltering” obviously were from the planet Venus. But the widespread reoccurrence of significant sunshine this week in Virginia, including a glorious illumination of Virginia Beach’s broad, new sandy expanse on the weekend, provides a great opportunity to look back and establish what really happened.

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Patrick McSweeney

A Losing Strategy

 

Every election year, political consultants counsel politicians to play to the middle. But what wins elections is voter turnout spurred by sharp, issue-driven campaigns.

 

Virginia Republicans can't afford to forget what Democrats at the national level are now recognizing. Blandness doesn't win elections. Sharp, issue-driven campaigns do.

 

Even with their recent successes, Republicans shouldn't be smug about elections this year and beyond. The voters have shown that they will respond to a hard message, often confounding political pundits in the process.

 

Candidates who listen to consultants' advice that they pursue the "safe" course of playing to moderates may regret that strategy. In an election year without a statewide election, it is particularly important for candidates to think about turnout. Turnout is a function of many factors, but the most important is message.

 

Campaigns that don't deal with controversial issues aren't likely to generate high turnout. On the other hand, what are perceived as nasty, negative campaigns are usually low-turnout elections.

 

The important point for a candidate is not whether overall turnout is high or low. The key is whether that candidate's supporters turn out in sufficient numbers to assure his or her victory.

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Rebel with a Cause

Fiscal Straight Jacket

 

Candidates Wilder, Warner bought my strategy of honest talk on fiscal issues. Terry, Beyer didn't. Now comes 2005. VA's budget is not "balanced";  it has a $4.5 billion structural deficit.

 

Behind Virginia's growing financial woes is a ballooning deficit of candor. My analysis of the state's true financial condition was the basis of candidate Warner's winning fiscal message, the one we put into writing on the key pages of his Action Plan for Virginia. Since then, the "structural deficit" -- the sum total of all the gimmicks, fixes, embedded fiscal time-bombs and off-the-books debt that has been used to "balance" current budgets at the cost to future budgets -- has grown to at least $4,500,000,000 and surely many hundreds of millions higher.

I have not been given access to the state's official books. Our elected officials have long been promising "truth in budgeting."  But if the governor, House Speaker Bill Howell, R-Fredericksburg, Senate Finance Chairman John Chichester, R-Fredericksburg, House Appropriations Chair Vincent, R-McLean, Secretary of Finance John Bennett, or anyone else advising either the governor or the General Assembly on fiscal matters want to disagree with the thrust of the analysis to follow, then let them give me a chance to review the state's financial books.

They will not, indeed can not. Despite months of promising just such honest talk, our state's political leaders have put Virginia into a tightening fiscal straitjacket that would be the envy of the weavers in Hans Christian Anderson's fable The Emperors New Clothes. Their claim that the state's budget is "balanced" is made out of whole cloth.

Unfortunately, the editorial boards of too many of our state's newspapers, led by the usual voices, are intent on focusing on a three letter word - TAX - as if raising taxes in 2004 or 2005 and giving this crowd in Richmond more money is a sure fix for this gapping Structural Deficit. They still don't get it: higher taxes is only a guarantee of higher taxes.
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Virginia Review

Earth Day Revisited

 

Environmental quality is getting better -- and will continue to do so as long as we safeguard the institutions that create wealth and support the advance of science and technology.

 

My children recently participated in Earth Day assignments at school. According to the curriculum, the environment is a mess, humans constitute environmental dangers, global warming is upon us and we face deteriorating water and air quality. Our familiar way of life is threatened by resource depletion, urban sprawl, and growing mountains of trash. We are awash in human-generated carcinogens, and so on and so forth.

 

While friends of liberty can be glad this Earth Day nonsense is over for another year, they can hardly be pleased with the state of environmental education in our schools. Perhaps it is time for parents to sit down with their kids to present an alternative view of the state of the planet. Here are some of the points I try to make in discussions with my children.

 

  • By most measures of environmental quality, things are getting better. We are living longer and healthier lives. Child mortality rates are down. Standards of living continue to improve, even for the poor. Educational and cultural opportunities abound. American enterprise remains creative and energetic. Social mobility is high. Per capita disposable income continues to increase. Available per capita living space continues to rise. Our water and air continue to become cleaner. Age-corrected cancer rates are falling.                                  More >>


Guest Column: Mike Thompson

Scuttling the Ghost Fleet

 

Seventy aging warships at the mouth of the James River are an environmental disaster waiting to happen. Bay Bridge Enterprises is backing a proposal to convert them to scrap. 

 

An environmental disaster of unknown consequences drifts toward reality at the environmentally sensitive mouth of the James River.

 

Seventy old naval vessels, retired from active service, are quietly moored in the James River off of Fort Eustis. This fleet of slowly deteriorating ships is conveniently called “The Reserve Fleet.” But in reality vast numbers of these once powerful war machines are rusting away; their stored oil and chemicals are waiting to ooze out into the James and then empty into the Chesapeake Bay.

 

The common reference to this rotting fleet is “The Ghost Fleet,” as it is only a wisp of what these ships were in the past. From a distance in the light of the moon or in the morning fog, these aging vessels appear like a fleet of imposing war vessels ready to fight for our freedom. But any fight has long since departed these wraiths of the sea.

 

The Ghost Fleet, managed by the U.S. Marine Administration (MARAD), poses a real danger from catastrophic oil spills and chemical spills. A whole Devil’s brew of contaminants could severely endanger the mouth of the James River, Chesapeake Bay and surrounding waters. Imagine the impact of a huge hurricane whipping these ships around like tooth picks and smashing them against each other. It’s a nightmare waiting reality.

                                                   More >>


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 The Op-Ed Page for Virginia's New Economy.

 Public Policy, Economic Development and Community Revitalization.

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Jim Bacon, an insurrectionary with a pen and a keyboard, applies his critical eye to government, public policy, economic development and community revitalization in Virginia.

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Madison County in Central Virginia doesn't maintain its own website. But webmaster Robert Miller, working on his own dime, has developed a site focusing on local government, economic development and growth management. He does a great job of highlighting key planning documents on crucial local issues -- better than most government and media websites do. Although the issues are inherently parochial, local activists could learn a lot from perusing Madison Matters. 

 

 

 

 

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Beyond the Web

 

According to Expansion Management magazine, 80 percent of all site location searches start with an Internet screening. (See "Site Searching on the Web," March 2003.)

 

In a world where everyone in the economic development game has industrial parks, Interstate access and a trained workforce, how can you stand out from the crowd?

 

 

 

Try an electronic newsletter targeted to site location professionals. To find out more, talk to Bacon & Eggheads, publishers of Bacon's Rebellion and experts in digital communications.

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