Category Archives: General Assembly

Dillon’s Rule, the RPV and the Marylandization of Virginia

by Don Rippert

Doppler shift from red to blue. As recently as 1977 both of Maryland’s US Senators were Republican.   From 1993 through 2003 Maryland’s eight US House seats were evenly split between Republicans and Democrats.   Today, Maryland’s 10 person Congressional delegation consists of 9 Democrats and a lone Republican.  This shift caused Maryland to be routinely rated as one of America’s most liberal states but also one of the worst states for conservatives.

Yes, Virginia there is a trend here too. Maryland last saw a Republican US Senator in 1989, Virginia made it to 2009.  In the state legislature nothing more than pure luck kept Republicans in control of the house.  Republicans still hold the state senate but all of those seats come up in 2019.  Maryland went from light blue to royal blue about 15 years ago and Virginia is tracking 20 years behind Maryland.  Simple math says that Virginia will be fully liberal / Democratic by 2023.  Arguably, the RPV’s recent bungling could accelerate this timeline.

In the RPV hope really does spring eternal.  Unfortunately, hope is not a strategy.  Hope gives Virginia’s Republicans a choice of EW Jackson (unelectable), Corey Stewart (unelectable) and Nick Freitas (a longshot, but maybe electable) in the recently held US Senate primary.  The rightwing radicals who vote in primaries insist on the futile opposition to abortion as a litmus test and voila … “unelectable” wins the Republican nomination.  When Stewart loses, those same lunatic fringe members will declare that Stewart just wasn’t conservative enough.  Fast forward to 2019, repeat the same RPV process and the Dems are in perfect position to dominate the statehouse right in time for the next round of census-driven gerrymandering.  Stick a fork in the RPV.

Judge Dillon’s revenge on Virginia’s conservatives.  Contrary to popular opinion there are some very conservative areas in Maryland.  They are too few to affect the state overall but they’re still very conservative.  Secession has been discussed frequently in Maryland’s Eastern Shore and recently in Western Maryland, the most conservative areas of the state.  Nobody thinks either plan has a snowball’s chance in hell of success but it’s “fun talk” anyway.  However, conservative Marylanders have something conservative Virginians don’t – local autonomy.  Even income taxes vary by county in Maryland.  So, a liberal county like Montgomery has a high county income tax (3.2%) and many government services while conservative Worcester County has a low income tax (1.25%) and fewer government services.  Conservative counties can stay somewhat conservative – even in the so-called Free State.  Once the libs get full control of Virginia everybody in the state will pour ever more money down the rabbit hole in Richmond.  Guns will become a dirty four letter word.  School curricula will be standardized along liberal lines and designated safe spaces will be mandatory for all government buildings (including schools).  When that happens I’ll be laughing at the addle brained Virginia conservatives who so loved our idiotic implementation of Dillon’s Rule here in the Old Dominion.  They’ll have it far worse than the conservatives in Maryland.

Public Meetings And Private Texts Don’t Mix

A Peek Inside the Process

As a registered lobbyist I am prohibited from walking onto or sitting on the floor of either chamber of Virginia’s legislature while in session, and can get no closer than the desk at the front door or the benches in gallery.  If I wish to speak to a member during session the custom is to send in a business card and ask that legislator to step out to the hallway for a chat.

I might provide an answer to a question they raised on the floor, offer a draft of some amending language, ask for a copy of something they have or ask them why they cast that last bonehead vote (well, I’d be more polite.)  If I ask them to the door just to discuss trivia they will not come next time I ask.

But wait!  That was the rule in the dark ages!  Now all I have to do to communicate with members at the height of floor debate (or committee debate) is email them on their laptops, now present and open on every desk, or even better text their personal cell phone.  The downside is there is a chance they will miss it or ignore me (a good chance, normally, which is why I still use the hallway chat), but the upside is the message may remain in the ether and never be subject to the Freedom of Information Act.

The huge holes in the Virginia’s public meetings and public records law caused by the new communications options were highlighted in a FOI Advisory Council debate Tuesday covered by Graham Moomaw of the Times-Dispatch.  The case at hand involved local officers texting among themselves during a public meeting and hearing from a member not in attendance (but not plugged in by phone as provided by law).  You can compare it to middle school kids passing notes and giggling, but sometimes the real decisions are being made in total secrecy with the public cut out.  This is a way to meet in executive session on matters that could not be the subject of a proper executive session.

Missing from the story was the discussion of how this has also changed lobbying.  The original intent of that quaint rule about lobbyists on the floor has been blown to pieces for several years now, and direct lobbyist communication is probably continuous all session long.  Amendments and votes are discussed directly, and bill language is parsed or changed.  It would make fascinating reading.  We will never get to read any of it.

Communication on Facebook and Twitter and other platforms is also common but I suspect are considered far less secure.  Most people work on the assumption that texts to private phones are FOIA-proof unless somebody chooses to leak or forward them.  Apparently the advice given during the meeting was that is correct unless and until the rules are changed.

So change them.  The law should prohibit electronic communications during legislative sessions or other public meetings about issues on the calendar.  Absent that (and it would hard to ban all communication) open the messages to full FOIA disclosure.  It would be fine with me to prohibit any communication with lobbyists during meetings on those electronic platforms, or to subject those to FOIA.  It would not be fine with many of the other lobbyists.

Open meetings means open meetings.  If you have something to say to a colleague, speak into the mic or go find a corner and have that conversation quietly face to face (knowing all of us in the room can see it happening). If the trends continue, it is possible to imagine a meeting where all the real debate goes on with no spoken discussion at all, and the outcome is swayed by a last-minute text from a lobbyist which will never be made public.  I bet it happens already.

OK, We Enacted Medicaid Expansion. Let’s Measure How Well It Works.

A “die-in” held at Capitol Square: Long on symbolism, short on data. Photo credit: Washington Post

So… The General Assembly has enacted Medicaid reform. That’s a big win for Governor Ralph Northam and Virginia Democrats, and potentially good news for 400,000 of near-poor Virginia adults who now will qualify for a healthcare program that will be 90% funded by the federal government and 10% by the state. It’s not such good news for budget hawks concerned about Medicaid’s runaway impact on Virginia’s General Fund budget or for patients who could pick up the tab for a new $300 million-a-year assessment on hospitals.

The reporting on Medicaid expansion, the biggest entitlement expansion in recent Virginia history, has been truly dreadful — a fact that I attribute to the downsizing of newsrooms across Virginia and the resulting inability of Virginia media to field the manpower to do anything more than cover General Assembly hearings. It is astonishing how little we really know about the impact this legislation will have on the cost and delivery of health care in Virginia.

My big questions now: (1) Will the program improve the health of Virginia’s near poor; (2) will it do so within the budget constraints that have been promised; and (3) how much of the cost, if any, will get passed on to the privately insured?

In all likelihood we will never know. That’s because no one appears to have identified benchmarks by which the effectiveness of the legislation can be measured. The politicians, activists and pundits will declare victory and move on to the next cause of the day. The last thing they want is to lay down markers by which this entitlement expansion can be judged to be effective or not. We don’t have the capacity here at Bacon’s Rebellion to do that heavy lifting, but we  can ask questions that are worth bearing in mind as the Medicaid juggernaut rolls forward.

Budget savings. A key promise in getting Medicaid expansion enacted is that the program will pay for the state contribution through savings in state programs. In theory, the Commonwealth will save $370 million in prison healthcare, mental health, indigent care funding, FAMIS pregnant women, and the like, over the next two-year budget. Will those savings materialize? I’m fairly confident that they will — budget items like this are among the easiest things to predict. But we won’t know for sure if we don’t check.

Impact on the Affordable Care Act. Steve Haner noted in a previous post that an estimated 60,000 Virginians now covered by Affordable Care Act health plans will be enrolled in Medicaid. What does it say about Medicaid expansion if, to a significant degree, it is just shifting tens of thousands of patients from one government-subsidized program to a different government subsidized program? Another question: Does Medicaid provide better coverage than Obamacare or worse? Yet another: What actuarial impact will the loss of 60,000 patients have on the Obamacare plans?

Speaking of Obamacare… The Affordable Care Act insurance markets continue their meltdown in Virginia. According to HealthInsurance.org, the weighted average of next-year rate increases filed by all insurers in Virginia is 13.4%. Some fraction of that increase can be attributed to Trump administration actions, but the markets also have been in a death spiral in which healthy patients bail out, forcing insurers to hike rates to cover the remaining, sicker patients. Regardless of who or what is to blame, it is difficult to appraise what is happening in the Obamacare markets. Plans vary so widely by the amount of deductibles and discounts negotiated from listed prices that it is impossible to compare Plan A with Plan B. The situation could be worse than it appears from comparing premiums alone. What will happen to the near-near poor (as opposed to the near-poor enrolled in Medicaid) if they get priced out of the market? Will Medicaid have to expand to cover them, too?

Quality of Medicaid care. Medicaid reimburses hospitals and doctors at the lowest rate of anybody in town, and most providers lose money on their Medicaid patients. Combine that with an acute shortage of doctors, and you get a situation in which it is exceedingly difficult for Medicaid patients to find primary case physicians. The General Assembly has done nothing to alleviate the doc shortage. Perhaps the managed care plans set up for Medicaid patients will devise work-arounds for the problem. Perhaps not. Nationally, there has been considerable debate about whether Medicaid patients are better off with Medicaid than if they just threw themselves upon the mercy of hospitals and doctors. Inevitably, that debate will be reprised here in Virginia. The Northam administration should settle upon metrics that track outcomes for Virginia’s near-poor population before and after Medicaid expansion.

Cost shifting. The financing of the health care system is stacked against the middle class. Hospitals shift a portion of the cost of treating their money-losing patients (indigent, uninsured, and Medicaid) to patients with privately insured health plans. Privately insured patients could get a triple whammy next year. Not only will they pay higher premiums due to general health care inflation (the first whammy), but they’ll eat the estimated $300 million hospital assessment enacted as part of Medicaid expansion (the second whammy). Plus, they could take another hit as docs and hospitals treat more money-losing Medicaid patients and shift costs to the privately insured (the third whammy). On the other hand, Medicaid expansion will inject a couple billion dollars into the system, so maybe cost-shifting pressures will diminish. Frankly, nobody knows. But it would inform future debate if someone tracked the numbers and performed the analysis.

Hospital profitability. With the exception of some rural hospitals, putatively nonprofit hospitals have consistently maintained high levels of profitability through the twists and turns of health care markets over the years. Will Medicaid expansion pad or diminish their profitability? I’m predicting that overall industry profits in Virginia will surge, but I could be wrong. Again, it would be helpful if someone kept track so we can understand what’s happening.

I offer this list just to get the conversation started. I’m sure readers can refine the thinking. What’s important is that we start measuring now. I would hate to find ourselves revisiting Medicaid expansion two or three years knowing no more than we do now.

Most States Use Provider Tax for Medicaid

The pending proposed amendments to the stalled state budget bill, which almost broke the log jam earlier this week, did indeed include not one but two new provider assessments/fees/taxes (you pick the term) on Virginia private hospitals. When both chambers return next week with their “this time we’ll really do something” promises on the line, the fate of both should be determined.

The payments are interchangeably referred to as taxes, fees or assessments around the country. Virginia already imposes one on intermediate care facilities and only one state, Alaska, has avoided any use of this revenue method for Medicaid.

Based on my short research the federal government allows the states to use these “tax the provider to pay the provider” schemes on the whole range of providers, and most states do also tax nursing homes. Others tap pharmacies and managed care providers. There are good summaries here from the National Conference of State Legislatures and from Kaiser Family Foundation. The federal rules do limit just how much the state can tax and still pledge to recycle the money back, but these proposals stay under that limit.

The existing Virginia provider tax on intermediate care facilities raises about $13 million per year. The two new ones proposed for Virginia private hospitals would raise about $383 million in Fiscal Year 2020, the first full year of implementation.

Right between the two provider taxes in the list of proposed amendments there is another new provision calling on a joint legislative group to take another look at Virginia’s tobacco taxes, to see how to handle the new vape products and to see if changes should be made to the restrictions on local tobacco taxes. There is no reference to a health care funding angle as motivation for that. Perhaps there should be.

The provider tax approach to funding Medicaid has a long history. It was proposed and shot down under Governors Gerald Baliles and Douglas Wilder.  During this year’s debate I gave somebody my 26-year-old “No Sick Tax!” lapel pin.

The idea’s attraction is obvious. The hospital or other provider pays the state $1 dollar toward Medicaid expansion and the state uses that to draw down more than $9 from federal matching funds. The second $1 now proposed is collected for payment reimbursement rate increases, but that only draws down $1 additional from Washington’s coffers because that is under the cost share match formula for existing Medicaid programs.

Will those taxes, which appear to exceed 2 percent of gross patient revenue at the 70 hospitals involved, end up coming from individual patients or from their insurance carriers? Hospitals point out correctly that with the federal matching dollars they come out ahead, implying that there would be no need to pass on the cost. Hard guarantees are lacking. Clearly costs are being shifted around, but it seems unlikely they will shrink.

There is an interesting parallel with the proposal related to the Regional Greenhouse Gas Initiative, where people are being told to disregard the carbon tax which the power companies will pay and then get back. Won’t cost us a dime! One difference is the RGGI taxes don’t attract any match. Both ideas have me turning over walnut shells looking for the pea.

In 1992, when Wilder was pushing his own $68 million proposal, the Virginia hospitals led the opposition. “The health care groups say the Medicaid tax inevitably would get passed on to consumers through increased fees and insurance premiums,” was how John Harris of the Washington Post summarized their position. Wilder pushed back citing hospital profits and executive compensation.

The 1992 story also notes that Medicaid had grown from 5 percent to 13 percent of the General Fund budget in just five years. Where it is now and where it is going can be seen in this recent Senate Finance Committee staff slide. Another ten years and it is bumping up against 30 percent.

Call them an assessment or a tax these dollars will not be General Fund dollars and will not change that projection. That is another reason some legislators like the idea. The same Senate Finance Committee staff presentation stated as advantages of this approach:  “Eliminates need for GF support” and “Frees up all Medicaid expansion savings for investment in other budget areas.”

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Will Ghosts Haunt The Senate Today?

Hunter B. Andrews

If you listen very, very carefully you can hear it:  A double whirring sound.  It is the sound of the late state Senators Ed Willey and Hunter Andrews spinning in their graves.

Four decades ago as Finance Committee chairs they were responsible for establishing the independent authority of the Senate in the state budget process, which before their day was led by the House of Delegates with the House offering the only actual bills.  The Senate ended its subsidiary role by introducing its own bills to bring to the inevitable annual conference committee.

News broke late yesterday that the 2018 budget impasse may break later today, with the Senate expected to vote to discharge the Finance Committee and bring the House budget bill directly to the Senate floor for consideration.  There will still be Senate amendments offered and adopted, but in reality what will be offered is the final version – the result of an unofficial conference led by Senate Finance Co-chair Emmett Hanger and House Appropriations Committee Chair S. Chris Jones.

Also late yesterday it became obvious that the actual Senate amendments and some summaries were floating around, but initially I couldn’t find them.  They were not posted on the Senate Finance Committee web page.  I emailed a member of the Senate Finance staff and was politely directed to find them on (ahem) the House Appropriations Committee web page.   The Senate hasn’t even met yet but the full amendments are posted by the House.  That to me said it all.

Here is the summary if you’d like to go through it on your own.  I may follow up on the content after adoption but wanted to note this amazing turn of events.  If you are  watching the Senate this afternoon and  the voting board gets glitchy or paintings start falling to the floor, the names of the poltergeists responsible will be easy to guess.

Behavior Has Changed But Within Limits

Gifts per legislator. Source: Virginia Public Access Project

There are plenty of complaints these days that the legislative process is unduly influenced by money, but when the spotlight shines or a major scandal erupts, behavior can change. For example, Virginia legislators simply do not want to report that they have received gifts or attended lobbyist dinners, on public records which are available to their voters, the media and potential opponents.

How few actually do show up on 2018 reports is well-illustrated in the graphic above recently posted on the Virginia Public Access Project (click here for interactive features). Readers of Bacon’s Rebellion are probably already following VPAP as well, but if not this is worth a look.

Except for one very popular event, the annual Agribusiness Council Dinner, 91 of Virginia’s 140 legislators would have reported no gifts or meals at all. In many rural districts the political cost of skipping the Ag Dinner and not being seen by constituents attending would also be high. Yet 64 legislators missed that one, too, and avoided having to explain that $69.48 repast.

Several legislative offices have signs out front expressing a policy against accepting any gifts, even innocuous gifts such as a ball point pen or a box of candy or a calendar. That is growing but is not universal. It is the aversion to reporting gifts or entertainment that is becoming more widespread.

That report makes one think the place has really changed since the Bob McDonnell case, right? Not so fast. First note the data covers the period of the regular General Assembly session, from January 1 to Sine Die in March, not the whole year. As you can see with the full 2017 data here the totals tend to grow through the year, especially with paid trips to summer conferences. But there is no dispute that the number and value of reported gifts and meals is shrinking. For example look at the same report for 2012.

Second, remember that gifts or entertainment expenses of $50 or less do not trigger a reporting requirement. Lobbyists or organizations are keeping a closer eye on the cost of items, but $50 can still pay for some very nice gifts or meals.

Does it at least mean the days of the big restaurant dinners are over? Oh my no – and here is how they do it. It can be tracked on VPAP as well but it takes research. The $50 reporting trigger is interpreted to mean $50 per person per lobbying principal (client) paying the bill. If two clients for the same firm split the tab the trigger is $100 per person, and if three – well, you get the drift.

To confirm this is still the practice I easily found an example, but will not provide the details because I did not reach out to the major lobbying firm involved. I noted that one client reported a dinner on January 25, 2017 with 12 persons and a bill of $149 – well below the cost that would require naming the legislators. But by clicking down its full client list I found four more clients reporting a dinner for 12 at $149 on the same date.

Assuming the firm didn’t host five different dinners that night, the real bill was $745 for 12 people, or $62 per person.  That’s hardly lavish, but the intent to disclose the names of attendees has apparently been thwarted. They could stay on the list of those with no reportable gifts for 2017.

As VPAP helpfully explains: “Disclosure forms do not require clients to state clearly the average cost per person. Calculating the average cost per person may not be as simple as dividing the total cost by the number of people attending. Because the forms and instructions are unclear, the amount listed can represent either the total cost of the event, the amount spent on only the officials who attended or the average cost per person.”

It is silly and arbitrary to assume that somebody who accepts a $51 dinner has been compromised while somebody who skips dessert or drinks and spends $40 has not. Frankly neither has been compromised in my book. The real purpose of these dinners is to get the undivided attention of the legislators for a while – admittedly an advantage for that lobbyist and an edge on the competition. That is reason enough they should be fully reported.

If the costs of a dinner can be shared among multiple clients then the costs of other forms of entertainment or gifts could also be divided, seeking to keep the cost below $50 per client per recipient and keeping the recipient(s) off reports. I have not scoured the records to see if that happens, but nobody should have to.  The General Assembly needs to end this particular game.

Oh, Not Him. He’s A Lobbyist!

“Will Republicans Put a Health Insurance Industry Lobbyist on the Powerful Virginia State Corporation Commission?” screams the headline on the website which to me epitomizes the intellectual depth of that particular political party.

It is responding of course to news that Richmond attorney and lobbyist David Clarke is now considered the most likely choice by the House of Delegates for the open seat on the SCC.  By House of Delegates I of course mean the Republicans in the House, since judicial selection remains a highly guarded prerogative of the majority. With the Special Session firing back up next week, somebody may finally be elected to replace the retired Commissioner James C. Dimitri.

David W. Clarke

“If Clarke ends up on the powerful SCC, he will be one of a few people overseeing the regulation of health insurance plans — and likely approve double digit increases — in Virginia,” is one of Blue Virginia’s points.  How about this point:  He will also be one of the few people who actually understand that industry and that market.  You cannot know what somebody will do once he’s put on the bench – it’s a liberating experience, I hear.  Judge Dimitri had Dominion Energy as a client, and then he was liberated.

I can’t stop the beloved public sport of lobbyist-bashing but I won’t pass up a chance to respond on behalf of my peers.  Clarke is one of four persons mentioned in the media as under consideration, and truth be told he’s not my favorite candidate.  But the fact that he is a lobbyist and a lawyer who has practiced in front of the SCC is what makes him extremely well qualified if he emerges as the consensus.  Everybody around the Capitol has had a chance to see him in action for years.

Like most of us who ply this benighted trade, Clarke actually has a very diverse list of clients over the years and the health care industry is hardly dominant on the list.  I’m a little surprised Blue Virginia didn’t focus on the gas industry.  The one time he and I crossed swords professionally, I was actually representing real estate lawyers and he was working for lay persons doing real estate closings.

The communication and study skills required to handle a long list of unrelated clients transfer well to other jobs. Few know better than lobbyists (or lawyers) where our clients are right and where they might be wrong.  There may be matters where he needs to recuse himself, but his personal financial entanglements (if any) may be more of a factor there than his old client list.

Despite the cheap partisan shot at Clarke, Blue Virginia is silent on the other known candidates:  a long-serving member of the Attorney General’s staff who specializes in utility matters, a former deputy AG who is now a university counsel, and a former member of the State Senate who is not an attorney (but that is not required by law.)  I suspect the qualifications of the candidates are secondary and any choice will become fodder for criticism.

“Don’t tell my mother I’m a lobbyist,” goes the old joke. “She thinks I play piano in a whorehouse.”  Well to the extent I did that, I listened and learned a few things along the way and it would be a very interesting experiment to try a session with none of us lobbyists around.  I predict you would not actually like the outcome.

Hospital Tax (No, Assessment!) Central to Budget Dispute At Special Session

I doubt many not directly involved in the ongoing struggle over Medicaid expansion in Virginia have actually read the budget language that is the heart of the argument.  So I have set it out below in full.  This is language included in the House version but previously rejected by the Senate, creating more than $300 million of the revenue discrepancy between the two plans.  The Senate Finance Committee considers it again Monday.

There is the major policy debate over whether Virginia should do as Congress allowed and expand service to hundreds of thousands of additional people. (I think it should.)  Then there is the argument over whether to try to squeeze the state cost share out of existing state revenue, or to create a new revenue source – which the Governor and the House have done with this language.  Set those aside for a second.

The third debate is procedural, because traditionally a new tax would be created by its own bill and enshrined as a general law, and not buried inside the budget bill. Keeping revenue issues out of the budget is a practice which has been ignored in the past, especially for fees, but on previous occasions any tax changes were formatted within the budget as amendments to Title 58. The big showdown in 2004 ended with two separate bills – the budget and an omnibus tax bill.

Creating an entirely new $226 million per year revenue stream with a budget provision is unprecedented.   As you can read for yourself the level of spending going forward may increase the tax rate in future years, without any Assembly action. The final paragraph vests discretionary authority with a federal agency, something else you seldom see in Acts of the Assembly.

Here is the text as it stands right now:

§ 3-5.20 PROVIDER ASSESSMENT

A. Private acute care hospitals operating in Virginia shall pay an assessment beginning on October 1, 2018. The definition of private acute care hospitals shall exclude public hospitals, freestanding psychiatric and rehabilitation hospitals, children’s hospitals, long stay hospitals, long-term acute care hospitals and critical access hospitals. The assessment shall be used to cover the full costs of the non-federal share of enhanced Medicaid coverage for newly eligible individuals pursuant to 42 U.S.C. § 1396d(y)(1)[2010] of the federal Patient Protection and Affordable Care Act.

B.1. The Department of Medical Assistance Services (DMAS) shall calculate each hospital’s “assessment” annually by multiplying the “assessment percentage” times “net patient service revenue” as defined below.

2. The “assessment percentage” shall be calculated as (i) 1.08 times the non-federal share of the “full cost of expanded Medicaid coverage” for newly eligible individuals under the Patient Protection and Affordable Care Act (42 U.S.C. § 1396d(y)(1)[2010]) divided by (ii) the total “net patient service revenue” for hospitals subject to the assessment. By June 1, 2018, DMAS shall report the estimated assessment payments by hospital and all assessment percentage calculations for the upcoming fiscal year to the Director, Department of Planning and Budget and Chairmen of the House Appropriations and Senate Finance Committees.

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A Shocking Case of Lawful Behavior

by Stephen D. Haner

Sometimes the problem is fake news and sometimes the problem is non-news, and in a shocking non-news story it was revealed that (gasp) politicians are raising money. Just as they have for every year I can remember, General Assembly incumbents are filling mail and email inboxes with invitations to their usual spring and summer lobbyist shake-down events.

But you have to understand, these are Senate Republicans doing this, the very same Republicans who have not acted yet on a delayed state budget! They are now in a special session. Acting in total and clear compliance with state law, and conducting themselves in complete conformity with previous patterns of behavior…..wait, why is this news? Are not Democrats also holding fundraising events? Actually they are, while the story was light on those details.

Perhaps you think it okay for members of the House of Delegates – in both parties — to hold their standard spring events. Do you think they have done their duty by passing out another version of their budget, so they get no special scrutiny as they dun the lobbying corps and the various corporate donors? They also are in special session, if that is what offends.

Granted, very few Senate Democrats are as aggressively raising funds. They have always been less aggressive about raising funds. It is one reason they are, in case you missed it, not in the majority.

I am not going to defend the Senate GOP delay on starting the second budget conference. But the issues that caused the hang up are legitimate and sadly we are all getting used to this unfortunate game of budget chicken. It may lead to laws that prevent fundraising during special sessions as well as regular sessions, but those prohibitions are mainly for show. If money can affect their decisions in January, it works just as well in June.

Subsidies for Thee, but Not for Me

Jamestown Settlement — tax thyself!

The economy of the Historic Triangle — Williamsburg, Yorktown and Jamestown — depends heavily upon heritage tourism. Visitor spending reached $1.08 billionand employed 11,000 workers in 2012, according to one report. But last year tourism and hospitality officials were complaining that growth had stagnated.

So, what do you do to boost the region’s No. 1 industry?

Raise taxes, of course. This year the General Assembly passed a bill backed by Senate Majority Leader Tommy Norment, R-James City County, to impose a 1 percentage point surcharge on the sales tax to raise revenue to be split equally between a new effort to rekindle Historical Triangle tourism and the three Triangle localities of Williamsburg, James City County and York County, reports the Daily Press. Williamsburg would use the funds to roll back the admissions tax and hotel and meals taxes it approved last year.

Sen. Monty Mason, D-Williamsburg, had opposed the tax all along on the grounds that it impacted poor people the most. After the bill sat on the desk of Governor Ralph Northam for three weeks, he prevailed upon Norment to amend the tax. The revised version would exempt the sales tax on food and add a $2-a-night hotel surcharge to recoup the lost revenue.

“I think this could be transformational,” Norment said.

Bacon’s bottom line: I don’t normally agree with Democratic Party politicians, but Mason is absolutely right about this. It’s one thing to tax hotels and restaurants, as Virginia Beach does, to raise funds to pour into marketing, promotion and infrastructure building. Although local residents do pay more for eating out, the tax is largely paid by the industry itself. But levying a sales tax on the general populace to benefit the industry is quite another thing. Such a tax would indeed impact the poor, who spend a disproportionate share of their incomes on food — not eating at restaurants but food purchased at grocery stores.

The workforce of Williamsburg, York and James City is about 70,000. In other words, five out of six people do not work in the hospitality industry. Undoubtedly some businesses provide goods and services to the sector, thus benefiting indirectly from its presence, but major employers like the College of William & Mary and the Anheuser-Busch brewery do not. The tax would represent a massive subsidy for the tourism sector at the expense of everyone else.

Don’t get me wrong — I personally love heritage tourism. I love visiting Colonial Williamsburg. But is that really the future that Triangle localities want to build for themselves? William & Mary, one of the highest regarded public universities in the country is located there. The Kingsmill Resort, which caters to affluent retirees, is located there. NASA Langley and Thomas Jefferson National Accelerator are located a few miles down Interstate 64. For $25 million a year, the community can’t come up with any better economic development initiative than promoting tourism?

As the dominant industry, the tourism sector is converting its political clout into public subsidies in order to perpetuate, even increase, its dominance. While a 1% sales tax surcharge might not seem like a lot, it will have a small dampening effect on economic activity not related to tourism. For example, the surcharge could encourage affluent retirees to select somewhere else to settle down and spend their money, thus impacting Kingsmill Resort-like development in the future and driving away citizens who pay lots in taxes but demand little in the way of government services.

I’m all in favor of not damaging your existing industry by refraining from enacting burdensome regulations and taxes. But if you want to nudge your community into the innovation-driven Knowledge Economy, you don’t do it by taxing the new economy to subsidize the old economy.