Nonprofit Hospital Profits and Medicaid Expansion

Every year Virginia’s hospitals cry poverty as justification for expanding Medicaid, and every year their profits just grow bigger.

Admittedly, hospital profits did decline 0.6% in 2015. But hospitals more than made up the difference in 2016. According to an annual update on Virginia hospital profitability by the Thomas Jefferson Institute for Public Policy (TJI), hospital profits increased 13.9% that year. Over the past four years, Virginia hospital profits have increased 36%. 

Some hospitals are more profitable than others, of course, and it’s true, as the Virginia Hospital Association reminds us, that some hospitals lose money. Twenty-eight Virginia hospitals ran deficits in 2016 compared to 42 in 2012, reports TJI, but that’s not the problem it might seem. Some money-losing hospitals are new, and their losses are temporary as they build market share. Other hospitals, typically rural, are part of larger health systems; while they may operate at a deficit, they funnel patients to larger tertiary-care hospitals where the real money is made. And at least one, Sheltering Arms in the Richmond area, has a business model that relies heavily upon philanthropy.

Remarkably, most of the industry’s $2.15 billion in profits come from the non-profit sector. For-profit Hospital Corporation of America (HCA) accounts for $244 million of the industry’s profit. Other for-profits have a negligible market presence in Virginia. The vast majority of profit comes from the non-profits. Here are the top earners:

Let’s be clear: I’m not attacking hospital profitability. We want our hospitals to be financially healthy. Who wants to have surgery in an institution that’s always cutting corners, can’t hire competent staff, and lacks the capital to reinvest in new technology and best practices?

But it is a legitimate question to ask, especially of nonprofit hospitals, how much profit is enough? The state grants nonprofits exemption from property taxes, corporate income taxes, and other taxes worth hundreds of millions of dollars to support their public mission. What is that public mission, if not providing medical care to the community at large — and especially to the poor?

The Virginia Hospital Association, I hear, will propose to finance Medicaid expansion by means of a hospital bed tax. That gambit will have the political virtue of avoiding a highly visible general tax increase, such as the state income tax or the sales tax, and embed the tax all-but-invisibly in your hospital bill where you likely will never take notice of it because hospital bills are indecipherable and your insurance company is covering most of it anyway. The proposal also will have the practical effect of transferring wealth from paying patients to nonpaying patients. Paying patients are being dunned already through opaque hospital bookkeeping to support the existing Medicaid program, which notoriously pays less than Medicare or private insurance. With a bed tax, paying patients will be dunned again.

But hospitals will retain their revenue surpluses to spend as they please.

Democrats feel terrible that some 240,000 low-income Virginians are stuck in what the center-left Commonwealth Institute think tank calls the health care coverage gap: States a recent paper: “They are unable to get quality, affordable coverage through the federal insurance marketplace because they don’t make enough money, and they can’t qualify for Medicaid because they make too much.”

We’ll see how Democrats propose funding the Medicaid expansion, but the money has to come from somewhere — either from taxpayers generally or the hospital bed tax. If past is prelude, Dems will have few qualms about shifting the burden to either one. After all, as Governor Ralph Northam opined yesterday, Medicaid expansion is “a matter of basic economic justice.” Unfortunately, economic justice, as we have learned from years of experience, is for the poor, not for middle class taxpayers and insurance payers.

In my taxpayer-friendly view of economic justice, perhaps we should be asking Virginia’s hospitals what the public is getting for nearly $2 billion in nonprofit profits. The press doesn’t cover hospital board meetings to report on how that money is disposed of. It doesn’t have the resources to do so. Perhaps the Joint Legislative Audit and Review Commission could determine how much nonprofit hospitals are getting in state and federal tax breaks and how hospitals are redirecting the money. I’d sure like to know before Governor Northam and his friends in the legislature salve their social-justice consciences by sticking it again to the middle class.

Update: The Virginia Hospital and Healthcare Association objects to TJI’s methodology for calculating profits. Says spokesman Julian Walker:

“In past studies of this sort, the Thomas Jefferson Institute has miscounted, included non-hospitals in its tabulation, evaluated total margins rather than operating margins which are a truer measure of fiscal condition, factored in investments and other assets in its calculations of profit, among other calculations that have resulted in a skewed and imbalanced impression of what the actual data from VHI shows. …

From 2008-2016, the annual rate of Virginia acute care hospitals with negative operating margins has ranged from 38 percent to 23 percent. Among rural acute care hospitals, the range is 63 percent to 40 percent.”

American Higher Ed: Innovative, Adaptable, Transformative

Edward L. Ayers

by Edward L. Ayers

Here’s a puzzle:  Americans love their own colleges and universities and yet are suspicious of and even disdainful of colleges and universities in general. Why is that?

Polls show that the great majority of Americans who graduated from college are grateful they went to that college, felt they got their money’s worth, and would go there again. The  love of institutions by students, alumni, and neighbors appears in gifts and in  window stickers proclaiming loyalty to their institution long after they have left. People acknowledge that universities are the source of much of our country’s comparative economic and military advantage, that our nation’s system of higher education is one of the great accomplishments of the United States.

And yet criticism of higher education descends from all parts of the political spectrum. From the right, we hear that colleges and universities are overrun with radicals; from the left, we hear that colleges and universities are overrun with corporate and managerial ideals. From the right, we hear that college costs too much because the federal government subsidizes students who should not be there; from the left, we hear that college costs too much because state and federal government has starved them. From the right, we hear that colleges need to rely more on on-line instruction and efficiencies that come from replacing tenure-track faculty with adjuncts. From the left, we hear that on-line education is one more way for big business to take over higher education, the turn to contingent faculty one more way to strip the freedom of thought and expression tenure was created to protect. Both sides agree that administrators are to blame, but for different reasons—either for not being in charge enough or being too much in charge.

The familiar debates over higher education are not very productive, in part because each side indicts rather than persuades the other. Critics begin with assumptions and reverse engineer solutions that meet those assumptions. In the meantime the real and immediate challenges of higher education go unmet.

A broader historical perspective can perhaps help move the conversation forward. Pulling the camera back, we see that the range, depth, and diversity of Americans achieving higher education has increased exponentially over the last half century and is still increasing. Between 1970 and 2017, the total number of students increased from 8.5 million to 20.6 million and the numbers and rates are still increasing. The number of female students increased from 3.5 million to 11.5 million. The percentage of students of color has doubled since 1976.

The transformation is gaining momentum and extending into all aspects of our institutions. Since 2000 alone, the number of low-income students enrolled in college has increased 14 percent, the number of female students by 29 percent, the number of black students by 73 percent, and the number of Hispanic students 126 percent. In 2017, 70 percent of high school graduates went on to another level of higher education, the highest ever. When they arrive in college, these students see that almost a quarter of full-time faculty are persons of color and almost exactly half are women.

These are remarkable, and heartening, transformations, some of the most positive things that have happened in this country over the last half century. They define the context for everything else in higher education, both our success and our remaining challenges.

Because of the transformation, demand for all kinds of education has never been stronger. Our community colleges are bulging at the seams; public universities of all sizes and kinds are flooded with applicants; for-profit and on-line enterprises have grown up to meet a demand that states and non-profits cannot meet. College has never been worth more, for the wage gap between college-educated and non-college educated people is higher now than it has ever been:  56.6%.

Far from being hidebound and resistant to innovation, higher education is and has been one of the most dynamic economic and social components of American society since World War II. Our universities have developed the most transformative industries of our time and have been on the forefront of every major social change. They have been agents of integration, inclusion, and internationalization, advancing the society far beyond their own gates. They are unruly and loud and sometimes self-righteous because they are the places where the nation tests itself, where new generations define what it means to be American.

American higher education, in other words, has never educated more people, it has never educated a broader array of people, it has never offered an education that embraces so many fields of learning, it has never offered degrees more valuable and more coveted, and it has never been more respected and appreciated by the people who benefit from it. The world admires and copies every aspect of America’s diverse system of higher education, from our liberal arts colleges to our research universities.

Colleges and universities have assumed greater responsibilities than ever before. Higher education is now serving a student body far larger, more diverse, and often poorer than ever before in our history. It educates more people from more backgrounds in more ways. Higher education is hard, intellectually and socially, and it is not surprising that those who are the first in their family to go to college or who speak English as a second language or have other work responsibilities may struggle and require more support. Student welfare, engagement, and protection have become institutional responsibilities and those responsibilities bring enormous benefits as well as new costs.

Institutions of higher education are hardly above criticism, of course. In fact, they are built to foster critical thinking, hard questions, good evidence, and strong arguments. In my experience with a broad range of people from a broad range of institutions, colleges and universities are run with rigor, discipline, and hard numbers. They continually explore and test their assumptions, constantly adapt to changing circumstances and learn from one another.

Like those institutions, critics need to focus on particular problems rather than resort to a generalized set of assumptions. The two major problems of American higher education are the amount of debt some students accrue and low levels of completion for some students in some schools. The two problems go together, for the students who do not finish are those who cannot repay the debt they acquire. Most who graduate do not build up large amounts of debt and default rates are low. Students who give up after a year or two, however, are not equipped to get a job that allows them to repay the debt. Colleges themselves, having analyzed the issues, are putting their resources, in the form of need-based aid, to this purpose—hundreds of millions of dollars each year in Virginia alone. A broader focus on behalf of those students would pay the biggest dividends for the institutions and those who support them.

These problems matter. How well colleges and universities succeed matters because higher education embodies and reflects the possibilities of society at large. Questions about affordability are questions about social mobility in America; questions about diversity are questions about fairness in this nation.

Rather than fixating on why “college costs so much,” in other words, it would be better to focus on the more concrete problem of debt and completion, problems that are both byproducts of the transformation and the strongest impediments to its progress. The democratic transformation of American higher education is not complete and it never will be, but it can be advanced with deeper perspective and clearer priorities.

Edward L. Ayers is president emeritus of the University of Richmond. This column is based upon a speech he delivered to the State Council of Higher Education for Virginia last week.  

Senate Committee Spikes Bill to End Electric Freeze, Promises Comprehensive Reform

Sen. Chap Peterson. Photo credit: Associated Press

The Senate Commerce and Labor Committee today killed a bill championed by Sen. Chap Petersen, D-Fairfax, that would have ended the freeze on base electric rates, restored State Corporation Commission (SCC) control over rate setting, and enabled the refund of hundreds of millions of dollars in electric utility profits to rate payers.

Senate leaders said that they are working on legislation that will direct the long-term future of the electric utility industry, subsuming the regulatory topics that Peterson’s would address. “There will be a larger conversation that will take place in the next week,” said Senate Majority Leader Tommy Norment, R-Williamsburg.

Peterson has pushed for a return to the regulatory regime that existed before 2015 when the General Assembly, worried about the potential impact of the Obama administration’s Clean Power Plan, enacted a freeze on base rates and canceled biennial SCC reviews. Peterson contends that Dominion Energy Virginia has earned excess profits of more than $400 million. Moreover, the new federal tax law will reduce Dominion’s tax bill by $150 million a year. His bill will protect rate payers, he said. “This is not an environmental bill. It’s not a pro-business bill. It’s a pro-ratepayer bill.”

Sen. Frank Wagner. Photo credit: Helment2Helmet

However, Committee Chair Frank Wagner, R-Virginia Beach, said the legislature needs to consider rate regulation in the context of building an electric transmission/distribution system that can accommodate more solar power and keep the grid secure and resilient. Virginia needs to upgrade its grid, he said. “We’re not there — we’re not even close to where we need to be.”

About a dozen speakers mainly representing consumer, environmental and business-customer interests spoke in favor of Petersen’s bill.

In remarks typical of those who supported Petersen, Sam Towell, with the office of consumer council for the Attorney General’s office, argued that Virginia should return oversight of the electric power companies to SCC judges who have the staff and expertise to review complex regulatory issues. “If the rates are too high, as they currently are, the SCC should have the authority to lower them,” he said. “If utilities make prudent investments, they should have the opportunity to recover their investments with a fair rate of return.”

Another advantage of SCC oversight, said Louis Monacell, an attorney representing the Virginia Committee for Fair Utility Rates, is that the public hearings allow for the production of documents and questioning of experts. In contrast to Dominion with its army of lobbyists, who meet with legislators and aides in settings where people don’t have a chance to challenge their assertions, he said, “the SCC bases its decisions on an open record.”

Norment said he was “taken aback” at the insinuation that legislators aren’t getting all viewpoints. “How can you stand there and tell me that your voices are not being heard?”

Dominion has a far greater financial interest in the outcome of the legislative process and can afford to hire more lawyers, lobbyists and experts, responded Monacell.

“We think the consumers do have an articulate voice,” as evidenced by the number of speakers at the hearing, said Norment. “And now they have an Attorney General who is serving their interests more than ever before.”

As Virginians ponder how to restructure the electric utility industry, said Wagner, the General Assembly needs to transcend the “myopic,” two-year time horizon of the SCC and adopt a longer-term perspective.

“It’s very clear that the Clean Power Plan is not moving forward,” Wagner said. “We have a degree of certainty that we didn’t have three years ago. This is the time to go back to a re-regulated environment.” Still, the General Assembly sets the broad parameters for energy policy. Solar is competitive now with every other form of electricity. Decisions must be made how best to integrate it into the grid without throwing off frequency and voltage, while also protecting the grid against a range of threats from hurricanes to cyber-sabotage, he said.

“We have huge changes coming,” said Wagner, echoing many of the same points that Dominion executives raised last month when announcing their openness to end the rate freeze.  “More electric vehicles, more batteries, more storage, more generation at the [local] level. …. We need to look a decade down the road.”

Update: An earlier version of this post said that the Committee “tabled” Petersen’s bill. In fact, committee members voted to “pass by indefinitely,” which I am informed is legislative jargon for killing the bill. I have rewritten the article to correct the mistake.

Retirement, Not Jobs, Pushing Virginians Out of State

Virginia has been losing population to domestic out-migration for the past five years. Most people (including me) have assumed that the reason for the exodus (well, not really an exodus, more of a drip… drip… drip… leakage) can be attributed to sub-par economic growth. In other words, more people are leaving than coming because more jobs are being created elsewhere than here.

But the latest data from United Van Lines calls that assumption into question. United’s data roughly tracks that of the Internal Revenue Service taxpayer change-of-address data in noting that for every 100 moves in and out of Virginia 53% were outbound compared to only 47% being inbound.

But get this: Two-thirds of the reasons cited for moving into Virginia were jobs, while only a little more than half were so cited for moving out. The widest outbound-over-inbound gap was for retirement, the second widest for family. Virginia also suffered smaller gaps for health and lifestyle.

Why would there be such a large retirement gap? Our 5.75% top income tax bracket? Hellish traffic in Northern Virginia? Too many polar vortexes? Perhaps readers can chime in with their speculations.

The Reform Agenda of Virginia’s Higher-Ed Critics

While the higher-ed lobby blames cutbacks in state support for the soaring cost of higher education, the Partners for College Affordability and Public Trust (a sponsor of this blog) are advancing the argument that colleges should take responsibility for their own actions. And the Partners are advancing an agenda that goes beyond simple caps on tuition increases in order to achieve fundamental governance reform.

The justification for reform is well known: Tuition for public colleges has risen 74% on average over the past 10 years while inflation has increased only 20%. Virginia baccalaureates are graduating with an average of $30,000 in student debt. Eighty-five percent of Virginians say college isn’t affordable, and 70% said in a 2017 poll that it was very important for policy makers to lower the cost of a college degree.

The Partners advance a six-point platform for Virginia:

  1. Freeze tuition to provide relief for debt-ridden students and parents. This set of proposals also would limit increases in room and board to the Consumer Price Index, and would cap the percentage of out-of-state-students.
  2. Require performance and outcome-based state funding to get at the root of the problem. Other than enrollment, there are no discernible criteria for distributing money to public colleges and universities. The Partners’ proposal would distribute half of all higher-ed appropriations according to outcomes-based metrics such as the percentage of Virginia students enrolled, tuition rates, student graduation rates, average time of degree completion, student employment rates, and median salaries six months after graduation.
  3. Like other Virginia state boards and agencies, require public comment at universities to give voice to students and parents. Virginia law requires that colleges and universities give public notice of planned tuition increases, but provides no provision for public comment.
  4. Eliminate special carve-outs giving FOIA working paper exemptions to college presidents that restrict the public’s view of how public funds are spent. Decision-making at higher-ed institutions is opaque an insulated from public scrutiny. The system could benefit from greater transparency.
  5. Restore public trust by defining a board’s primary duty as to the Commonwealth and her citizens. Appointees to college governing boards, usually alumni, tend to be co-opted by the administration and buy into presidents’ visions for institutional advancement. Many boards rubber stamp administrative proposals. The state code should define university trustees’ primary duty as to the Commonwealth and its citizens.
  6. Re-label “Board of Visitors” to “Board of Trustees” to align with national standards. The name change is symbolic but it puts the emphasis on trust.

Bacon’s bottom line: Overall, this is an excellent set of proposals. It doesn’t just strike out blindly against tuition increases, it takes a comprehensive look at governance reform. I’m ambivalent about the General Assembly imposing a tuition freeze, for reasons that I will explain in a future blog post, although I readily concede that sometimes the only way to fix a problem is with a blunt instrument. I’m also disappointed that the transparency measures don’t include my pet proposal for the collection of additional data that would enable administrators, boards, and the public to evaluate staff and faculty productivity — a driving force behind rising tuition costs. Those caveats aside, I don’t see how any reasonable person could disagree with most of the principles articulated here.

I will be examining some of the issues in depth in future blog posts.

Worthy Cause, Wrong Target

Justin Moore talks to Jennifer Moon, legislative assistant to Sen. Jill Vogel, R-Winchester. Photo credit: Capital News Service

The Capital News Service has published an article on how the higher ed lobby is working state legislators at the General Assembly. The report describes Virginia Commonwealth University student Justin Moore, a clean-cut, well-dressed young man, meeting with a legislative assistant to Sen. Jill Vogel, R-Winchester.

Representatives like Moore came armed with statistics they handed out to legislators, the article says. “From 2008 to 2017, they said, spending per student in Virginia decreased by $1,069, putting a greater financial burden on students.”

These young people are very well intentioned, and they’re using data that someone has provided them. Exactly who has organized this effort and supplied talking points to the students is unclear in this case. The data sounds about right, and I’ll accept the fact that the number is accurate. But it is largely meaningless without context.

Here’s the context: According to State Council of Higher Education for Virginia (SCHEV) data (found here), the average cost of attendance (tuition, fees, room, board) across all public four-year Virginia institutions of higher education for undergraduate students was $14,683 in the 2007-2008 school year. Adjusting for inflation, that’s $17,358 in today’s dollars. Today the cost of attendance is $22,987.

Let me do the math for you: Adjusting for inflation, an undergraduate’s cost of attending a four-year college increased $5,629 over the decade. If reductions in state support for higher education amounted to $1,069, it accounted for about 19% of the total increased cost of attending college.

Even if we look at tuition only, the average cost rose from $4,761 ($5,560 in inflation-adjusted dollars) to $8,614, or $3,054. Thus, cuts in state support accounted for a little more than a third of the tuition increase over this period. You can get different results if you compare different periods — but these were the years that advocates of increased state spending chose themselves.

However you slice and dice the numbers, state cutbacks in support to higher-ed account for only a fraction of tuition inflation and cannot begin to explain all the inflation in fees, room, and board. To be sure, the General Assembly has not helped the cause of college access and affordability, and earnest students like Justin Moore are more likely to land a one-on-one audience with a legislative aide than they are with presidents of their universities. But perhaps in seeking sympathy for their plight they also should petition administrators who make craft university budgets and the boards of trustees that rubber stamp them.

Farewell Parade

Don’t mess with Virginia.

by Stephen D. Haner

I was very flattered that the U.S. Navy arranged that parade of ships just to mark my departure from Newport News Shipbuilding last month.

I’m kidding, of course, because the recent demonstration of naval firepower out in the Pacific (pictured above) was arranged for Dear Leader Kim and his friends Vladimir and Xi. But it is such a magnificent image I had to share it. I don’t think enough Virginians know that all three of those nuke carriers were built right here in the Old Dominion, along with the other eight in the fleet.  And many of the nuclear submarines submerged around that task force are also Virignia-built.

Virginia’s most famous product is not peanuts or tobacco.

Virginia builds naval supremacy.

Shipbuilders come and go from the shipyard every day – most with far more than my 12 years of service — and a lobbyist is far less important and far easier to replace than a nuclear-qualified welder.  I stole that line from the CEO, who is fond of saying even his job is easier to fill than some of the specialty jobs on the waterfront.

When I started, they issued me a Blackberry, and I joked that it was a leash.  “No,” the vice president dryly responded. “This is a nautical company. That’s a tether.” The tether later became a smartphone, but it has never been more than a few feet away in the past 12 years except for two trips overseas. It has been gone almost a month now and I still reach for it.

And it was a tether. My relationship with Bacon’s Rebellion started long before I got hired by the yard, but I quickly discovered that the yard was off limits for my commentary. As a former reporter and political communicator my lobbying style has always involved working with the media, and in my first session I had a routine discussion with a local reporter about a routine bill. When my quotes appeared in the Daily Press, the negative reaction was swift and instructive.

So I have never discussed the shipyard on Bacon’s Rebellion and rarely mentioned it. Now that I’m an ex-shipbuilder that may change a bit, at least with regard to its general operations and its products and its importance to the Virginia economy. Somebody else will be responsible for communicating its views to the General Assembly and the state executive branch. I may use this space from time to time to share with you some of the things I learned working in that marvelous place with so many dedicated people building the most complicated machines in the world.

Reports of my retirement are like the reports of Twain’s death – premature.  I may handle a few more clients in the coming years. But the shipyard is fading from sight off the fantail.

Stephen D. Haner, principal of Black Walnut Strategies, is a Richmond-based lobbyist.

A New Generation of Fuzzy Thinkers for Henrico

Henrico County has flipped from a majority-Republican to a majority-Democrat board of supervisors. That could be a good thing or a bad thing, depending. If Democrats nudge the county toward more rational, Smart Growth-like land use patterns — more infill, more density, more mixed use, more walkability — it could be a good thing. If they push the county into ill-thought-out spending initiatives, it could be a bad thing.

Based on the Richmond Times-Dispatch’s coverage of a two-day board retreat, it looks like spending will top the list. The three Democratic members of the board indicated their desire to expand the GRTC (Greater Richmond Transit Company) Route 19 to the Short Pump retail center at an estimated cost of $800,000 annually.

The purported benefit is greater access for job seekers. Tyrone E. Nelson, representing the Varina district at the east end of the county, said he could not understand why a county with a budget of nearly $1 billion had not yet devoted funds to bring bus service to the employment center. “I still don’t understand why it’s like pulling teeth to get public transportation to Short Pump. This is a 2018 need.”

His fellow Democrats expressed the same sentiment. “We’re not doing enough for job access,” said newly elected Courtney Lynch. “When you look at things we should spend money on, this should be something where we can get creative and get things done.”

Democrats and Republicans alike can agree that helping people gain access to jobs is a worthy goal. We want people to work so they can support themselves and their families. In Henrico County, the poorest residents tend to live in the far east end of the county, far from the affluent Short Pump commercial district where many jobs are available. GRTC already runs buses out Broad Street to Costco, and the expansion would extend the service a few miles more at seemingly modest cost.

That makes sense as a starting point for an inquiry: Hey, extending the bus line just a couple miles more would provide passengers access to a whole bunch of jobs they can’t reach now. Let’s take a closer look and see if it makes economic sense. From what I glean from the Times-Dispatch article and county documents, however, the supervisors skipped that let’s-see-if-it-makes-economic-sense step.

Henrico County Public Works has posted a slide presentation online covering proposed investments in roads, highways, sidewalks, bike trails, and mass transit. The slides contain a lot of information, but not everything that we, as citizens need to reach an informed conclusion. Perhaps the speaker making the slide presentation had more to say about the economics of bus service, but there is no indication of it in the Times-Dispatch article.

Let’s start with the map at atop this post. The big blue circle on the right is Mr. Nelson’s supervisor district. The small blue circle on the left is the Short Pump employment center. To get there, Nelson’s job-seeking constituents must take the bus into downtown Richmond where they would transfer to another bus running out to Short Pump.

The first question is how many passengers avail themselves of the bus service to access retail and service jobs along Broad Street at present? One hundred a day? A thousand? Ten thousand? Presumably, existing passenger loads would give us an order-of-magnitude idea of what might be expected if we extended the line. Alas, existing passenger numbers are not provided.

The more pertinent question is how many additional passengers are projected to avail themselves of the bus service going all the way to Short Pump. Again, in orders of magnitude, are we walking about 100 passengers, 1,000, or 10,000? This would seem to be a critical matter because, if the new service costs $800,000 a year to operate to benefit 100 passengers daily, we’re talking about an annual subsidy of $8,000 per passenger — an extraordinary sum. Why not just buy each passenger a new car? If we’re talking about benefiting 10,000 passengers, then the subsidy is only $80 per passenger, a nominal sum in which the social and tax benefits clearly outweigh the expenditure. If we’re talking about something in between, then the decision is not so clear.

As always, we should ask if there are alternative expenditures of money that would yield greater social benefits. Eight hundred thousand dollars is a nice chunk of change. I were a supervisor representing Nelson’s district, I would convene a meeting of GRTC, Uber, Lyft, Bridj, and other transportation-service companies and ask them, what kind of service could you provide my constituents for $800,000 worth of subsidies? Could you provide more point-to-point service providing more convenient schedules and shorter travel times, making it even easier to make the trip and find a job? Can you come up with a more imaginative solution than simply extending the existing bus schedule?

When such basic questions go unasked, we can be assured that money will be ill spent. Truly, Henrico has entered a new era — from one in which it made lousy land use decisions to one in which it will make lousy spending decisions.

Solar Power Building Momentum in Virginia

Dominion solar farm in Buckingham County.

Dominion Energy has grown its solar fleet in Virginia and North Carolina over the past two years from near zero to nearly 1,350 megawatts in service, in construction or under development — enough to power 340,000 homes during peak sunshine. That makes Dominion sixth among owners of electric utilities, the company said in a press release issued yesterday.

In Virginia, there are 27 solar generating facilities on 4,683 acres, equating to about 444 MW of solar capacity either in operation or under development. Construction of another 300 MW of solar is planned to support a Facebook data center planned in Henrico County. The company’s long-term energy forecast calls for 5,200 megawatts of new solar generation over the next 25 years.

Nationally, parent company Dominion Energy now claims to have the sixth largest fleet of solar facilities in the country. Meanwhile, Appalachian Power, has issued RFPs for up to 10 megawatts of solar production. Virginia’s second-largest utility is leaning more on wind power to build its renewable energy portfolio.

“It’s not just about Dominion Energy meeting its clean energy goals, it’s also about helping our customers achieve theirs,” said Paul Koonce, president and CEO of Dominion Energy’s Power Generation Group. “We have a responsibility to offer the right programs, resources and solutions so our customers can make smart decisions about their energy future, and the key is we’re doing it together.”

Two years ago critics were blasting Dominion Virginia Power for its slow adoption of renewable energy. You don’t hear that much any more. Today foes contend that the utility is interested only in projects that it can own, operate, and generate profits from itself.

Working with solar companies and environmental groups, Dominion cut a “community solar” deal last year in which independent outfits would own and operate the solar farms while Dominion would own the entity that bundled the electricity generation and marketed it to consumers.

Now attacks tend to focus on charges that Dominion discourages development of rooftop solar by individuals and businesses. Virginia, critics say, needs to move to a distributed (more decentralized) grid that can accommodate thousands of small, independent contributors to the grid. A big sticking point is the level of compensation Dominion receives for the critical task of maintaining the transmission and distribution system as well as back-up capacity for when the sun doesn’t shine.

The company says it is seeking State Corporation Commission approval “for a 100 percent renewable energy option for residential and small commercial and industrial customers, as well as an option for business customers to purchase renewable generation equal to a specific portion of their energy usage.”

Dominion also has signaled its intention to modernize the electric grid to make it safer from cyber threats and to accommodate distributed contributors to the grid. “A smart energy grid,” said the press release, “will enable the company to seamlessly connect with cleaner energy resources, including private solar and other local generation sources.”

Ivy Main, who tracks solar energy developments for the Virginia chapter of the Sierra Club, wrote in her blog, Power to the People, that she expects a raft of solar energy bills to be submitted in the 2018 session of the General Assembly. At the top of her list of wants, she would like to end the 1% cap on the amount of energy that can be supplied through net-metered distributed energy and also to remove standby charges on residential solar. She also would like to liberalize power purchase agreements (PPAs) that would allow third parties to structure deals allowing universities, schools, local governments and non-profits to take advantage of solar tax credits.

Main also calls for pilot products to test the concept of microgrids, which are appearing in other states. “Promoting microgrids as one way to keep the lights on for critical facilities and emergency shelters when the larger grid goes down,” she writes. “A microgrid combines energy sources and battery storage to enable certain buildings to ‘island’ themselves and keep the power on. Solar is a valuable component of a microgrid because it doesn’t rely on fuel supplies that can be lost or suffer interruptions.”

Make College Trustees More Accountable to Students, Taxpayers

Students at Missouri State University’s aquatic center in 2014. Photo credit: New York Times

James V. Koch

In a competition to woo students, public universities are increasingly offering lavish amenities that have nothing to do with education.

The latest trend is lazy rivers, which have been installed at several big institutions, including the Universities of Alabama, Iowa and Missouri. Last year, Louisiana State University topped them all with a 536-foot-long “leisure” river in the shape of the letters “LSU,” part of an $85 million renovation and expansion of its gym. It was L.S.U. students who footed the bill.

At a time when college has never been more expensive, this is the last thing students should be paying for. According to the College Board, tuition and fees at public four-year institutions grew more than 60 percent over the past 10 years. State budgets for higher education have been slashed, and students have to make up the difference.

In the case of L.S.U., the lazy river was financed entirely by student fees, an addendum to their annual tuition. According to the Chronicle of Higher Education, over the past five years, those fees increased by 60 percent, nearly triple the amount L.S.U. students paid in 2000.

Tuition and fee hikes at public universities don’t come out of nowhere. Each has to be approved by a school’s governing board, whose trustees are typically appointed by the governor. Ensuring affordable, quality education is an essential part of trustees’ responsibility, but unfortunately often not part of their practice.

Trustees of public universities are stewards of a public trust that rests nobly on the notion that an enlightened citizenry is vital to a democratic society. They have a fiduciary duty to represent the citizens and taxpayers who support public institutions of higher education, as well as the students who attend them. But even though the best interests of students and taxpayers revolve around college access, affordability and graduation outcomes, too often presidents and boards are more focused on the rankings, reputation and popularity of the institution itself.

In my career as the president of two state universities and a consultant to nearly 50 higher-education institutions, I’ve observed dozens of college presidents skillfully co-opt their governing boards into approving costly projects that make schools look more attractive. (Of course, every college president has to increase costs sometimes. But the goal is to make sure it is necessary, while keeping expenses as low as possible for students.)

Trustees, who typically meet four to eight times each year, are entertained as if they are visiting heads of state, flattered for their service and financial contributions to the institution. College presidents sweeten requests for new buildings and research centers, as well as additional student affairs programming, with cleverly branded words like “promise” and “excellence.” What board would want to withhold promise and excellence from its beloved student body?

College presidents also tranquilize trustees into agreement with impossibly large volumes of reading material. Trustees get binders full of documentation about institutional successes that are padded with expensive plans for increasing growth and reputation. Most come away impressed by their president’s expertise and vision and assured that — thanks to their efforts — the university is on the right track.

The unfortunate truth is that while most college presidents care deeply about their institution’s success, an important part of their job is to shake free more resources. They seldom initiate serious campaigns to contain costs.

This means it falls on trustees to be better prepared to help challenge costly proposals that don’t add educational value. When it comes to state schools, the states themselves should educate trustees to understand their responsibilities to the citizenry and students. Training on big-picture issues and higher-education trends, such as the financial trade-off between instruction and research, the costs of intercollegiate athletics, and the expansion of amenities, would help trustees develop courage to ask college presidents probing questions that look beyond institutional narratives and cherry-picked rhetoric.

Our nation’s governors must also play a role. As they appoint public university trustees, they can and should mandate training to make university boards responsible to taxpayers and students. I don’t mean to imply that trustees should devote themselves to ritual opposition to presidents, who usually possess an unmatched understanding of the institutions they lead.

But presidents are not infallible.

James V. Koch, a member of the board of Partners for College Affordability and Public Trust, served as president of the University of Montana and Old Dominion University. Partners for College Affordability sponsors this blog.

This op-ed, published originally in the New York Times, appears with the author’s permission.