Bacon's Rebellion

Democracy Thrives in Sunlight

Yes, It Will Get Better

—

by

James A. Bacon
in

Virginia’s economy and housing sector will remain sluggish for the rest of 2008 but the state’s economic performance should pick up in 2009, forecasts Chmura Economics & Analytics in a study commissioned by the Thomas Jefferson Institute for Public Policy.

While the state economy will slow, Virginia should skate past a recession, the report concludes. “Employment growth is expected to slow to 0.5 percent in 2008 before accelerating to 2.9 percent in 2009,” says the study. “Wages and salaries will slow to 3.9 percent amid the business cycle downturn in 2008 before accelerating to 5.0 percent in 2009.”

But there will be continued pockets of weakness. Retail spending may lag the recovery. Furthermore, building permits could slide another 10.4 percent in 2009 after taking a 19.4 percent tumble this year.

Here is the breakdown by MSA for 2008 and 2009 combined:

Blacksburg
Employment: 0.1 %
Wages/salaries: 7.1%

Bristol
Employment: 0.1%
Wages/salaries: 3.9%

Charlottesville
Employment: 4.0%
Wages/salaries: 11.9%

Danville
Employment: -1.0%
Wages/salaries: 3.0%

Hampton Roads
Employment: 1.3 %
Wages/salaries: 10.3%

Harrisonburg
Employment: 3.2%
Wages/salaries: 6.0%

Northern Virginia
Employment: 2.2%
Wages/salaries: 9.1%

Richmond
Employment: 1.2%
Wages/salaries: 8.5%

Roanoke
Employment: 0.4%
Wages/salaries: 5.5%

Winchester
Employment: 3.5%
Wages/salaries: 10.7%

Non-MSAs
Employment: -1.2%
Wages/salaries: 11.3%

Appendix: TooManyTaxes has asked me to make available a chart entitled, “Virginia Counties and Cities Reducing Their Local Contribution to Public Education in FY 2006,” by Chris Braunlich, as supplementary evidence for a thread of comments about this post.

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  1. Groveton Avatar
    Groveton

    Isn’t this the problem:

    Non-MSAs
    Employment: -1.2%

  2. E M Risse Avatar
    E M Risse

    Print this out, tack it up on your office break room regrig and check it out in a year.

    We hope it happens but would not bet on it.

    EMR

  3. Jim Bacon Avatar
    Jim Bacon

    As Richard Florida says, human capital is being drawn to the major metropolitan areas where high value-added activities occur because that’s where the money-making action is. Making money in the knowledge economy requires a critical mass of human talent — a critical mass that is found only in large metro areas (and, to a lesser extent, university towns; but not all of them, witness the difference between Charlottesville and Blacksburg).

    One of the suggestions we keep seeing on this blog is, “create more places.” That idea makes sense, but only in isolation from the economic realities that drive creativity and innovation.

    Sad to say, but the non-metro areas and the old mill towns are swimming upstream. If the Commonwealth didn’t transfer so much wealth to them (especially school funding and economic development assistance), the situation would be even worse.

  4. Groveton Avatar
    Groveton

    I added up the population of Virginia citizens in each MSA. I get 5.8M. Using a Virginia total population of 7.7M I get a non-MSA population of 1.9M.

    So, I read your following statement with interest:

    “Sad to say, but the non-metro areas and the old mill towns are swimming upstream. If the Commonwealth didn’t transfer so much wealth to them (especially school funding and economic development assistance), the situation would be even worse.”.

    At what point does this transfer become too big of a drain? When do you start risking the economic health of the 75% of Virginians living in the MSAs by transferring money out of the MSA to the 25% of the residents who live there?

    Note: The MSA definitions are pretty broad. For example, Stafford County, Spotsylvania County and the City of Fredricksburg are included in the Northern Virginia MSA definition. I have contacted the Census Bureau and asked that all people in Spotsylvania County and Fredricksburg be counted in the NoVA MSA except Larry Gross. After I referred her to some of the postings on BR, the nice lady at Census agreed to open a new MSA on the Moon for Larry.

    And I know what Larry will say – better the Moon than NoVA!

    What’s that thing that Larry does?

    Oh yeah ….

    😉

  5. Anonymous Avatar
    Anonymous

    Transfers from NoVA to low-income areas are not the extent of the problem. The state aid to education formula also sends Fairfax, Arlington, Alexandria and Loudoun money to many not-so-poor areas of the state.

    The correlation between the “2006-2008 Composite Index Used for Funding” and “Median Average Gross Income Per Return for 2003” (the lastest available data when this was calculated) was 0.484. One need not have majored in statistics to realize that the formula is flawed. There needs to be strong correlation between income and state aid to education. Poor areas should be aided. The other recipients of substantial state aid should see their aid cut and local taxes increased.

    Yet, the morons representing NoVA in the General Assembly (mainly Ds now) vote for this and the buffoons in the business community cheer it on. The NoVA business community was fully supportive of Mark Warner’s tax increase that was allegedly for education — yet Fairfax County received only $7.4 million in new money (at a cost of c. $107 million) for the first year. And Fairfax County delegation votes put the legislation in effect.

    I cannot believe that Mark Warner would have vetoed the bill had Fairfax County legislators held out until the county received a higher return. But our legislators were more than happy to play patsies for everyone else. Most fell all over themselves to vote for a bad bill.

    As my friend’s op-ed concluded “Fairfax County voters are the least sophisticated in the state.” We keep reelecting them.

    TMT

  6. Groveton Avatar
    Groveton

    When Baliles passed an education tax hike the same thing happened. Then Gilmore passed a tax hike but added a “maintenance of effort” clause that prevented localities from using the education tax as the basis for lowering their own contribution. Then came Warner with his “education tax hike”. In what appears to me to be blatant dishonesty, the “maintenence of effort” clause was omitted from the Warner tax hike.

    TMT, your friend wrote, “Fairfax County voters are the least sophisticated in the state.”. Maybe. I think the acid test will be whether NoVA votes for Warner or Gilmore for US Senate. I am afraid that your friend may be proven right. I’ll be voting for Gilmore. I may be the only person in Virginia who votes for Obama and Gilmore. There is some chance that I’ll change my mind on Obama – McCain. There is no chance that I’ll change my mind on Warner – Gilmore. I may even be thanking goodness for RoVA if they outvote NoVA and send Mark Warner packing.

    BTW – Any chance of getting the link to your friend’s Op Ed piece?

  7. Larry Gross Avatar
    Larry Gross

    Thank You Groveton – I really do appreciations the expressions of support!

    I’m having a devil of a time finding the current equation used to produce the composite numbers.

    I know there are at least 9 different criteria..

    anyone got a link?

  8. Anonymous Avatar
    Anonymous

    Groveton – The text of the article in question can be found at http://baconsrebellion.blogspot.com/2007/10/cnu-takes-virginias-public-pulse.html#comments Page down to TooManyTaxes at 4:06 pm.

    Vince Callahan said, after the tax increase/school funding change took effect, that a number of school districts, including some suburban Richmond districts, cut their local funding for schools. Needless to say now Old Vince now thinks Mark Warner is great. (I don’t agree with her votes on all issues, but give me Margi Vanderhye over Vince Callahan any day. She at least engages constituents in dialog. Callahan was always indignant about having to answer questions.)

    Higher taxes and for the children sells among the NoVA bumpkins, even when it means less for their own kids.

    TMT

  9. Larry Gross Avatar
    Larry Gross

    Here is an interesting publication:

    top of Page 10:

    “The Standards Of Quality—An Oral History”

    http://www.dbava.com/qmsp08web.pdf

    and at the bottom of page 10 – is the actual composite index calculation in all of it’s ugly glory.

    Groveton should appreciate this part about the “Constitutional Revision Commission”

    When I look at this critter – for myself – I have a hard time deciding how this would penalize or favor jurisdictions as it takes into account many factors that would seem to pretty much bracket and prevent outliers…

    If would seem to me that it would be difficult for a locality to lower their property tax rate – and not have it reflected in the calculation but I’d listen to further enlightenment from those that seem to know.

    Almost anyone would have to admit – this calculated composite is not arbitrary. It appears to me to be a good faith attempt to actually decide how much support is justified and further.. it rolls with changes in the data…

  10. Anonymous Avatar
    Anonymous

    Larry, I just emailed to Jim, a copy of a chart prepared by Chris Braunlich, that shows some evidence of local cuts in education funding after the Mark Warner – John Chichester tax increases. I also copied Groveton to show him yet another example of how the Descendants of Pocahontas bested the Fairfax County Elite — one more time.

    TMT

  11. Anonymous Avatar
    Anonymous

    “Gallup have just released a fascinating poll in the US on attitudes to wealth redistribution. As the report puts it:

    When given a choice about how government should address the numerous economic difficulties facing today’s consumer, Americans overwhelmingly — by 84% to 13% — prefer that the government focus on improving overall economic conditions and the jobs situation in the United States as opposed to taking steps to distribute wealth more evenly among Americans.

    Republicans (by 90% to 9%) prefer that the government focus on improving the economy, as do independents (by 85% to 13%) and Democrats (by 77% to 19%). This sentiment also extends across income groups: upper-income Americans prefer that the government focus on improving the economy and jobs by 88% to 10%, concurring with middle-income (83% to 16%) and lower-income (78% to 17%) Americans.”

    The Spectator

    Well, there is something pubs and Dems can moostly agree on.

    RH

  12. Anonymous Avatar
    Anonymous

    Yes, it will get better.

    Reliable rumor has it that Bill Gates retired so he could become Obama’s VP.

  13. Anonymous Avatar
    Anonymous

    If you think the world is coming to an end checkout the charts on gas consumption here:

    http://www.mjperry.blogspot.com/

    The chart shows the percentage of percapita income require to buy enough gas to drive a car 15,000 miles, from 1980 until today.

    In 1980 it took 18% of disposable income, but from 1995 to 2005 it was below 4%, and even now it is only 7%.

    What high gas prices?

    RH

  14. Anonymous Avatar
    Anonymous

    After declining for 7 out of the last 8 months, median home prices have increased for 3 months in a row, and the median price of $208,600 in May was 6.65% above the $195,600 level in February

    http://www.realtor.org/wps/wcm/connect/3cb2b7004a3d76e781889ba90d96a059/research__SF062608.xls.xls?MOD=AJPERES&CACHEID=3cb2b7004a3d76e781889ba90d96a059&CACHEID=4a4524004a3d4048b604ffcaababc7bf

    RH

  15. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    Yea, we are all better now. I love that disposable income spin. Disposable income is all income left after taxes. What the spinners left out is the fact that most Americans have more long term debt coming out of that income than ever before. Remove that debt amount and it leaves the true disposable income available for short term expenses such as gas. The issue isn’t whether gas takes up a smaller portion of total income, it’s whether the gas is taking more of what little is left over.

    Then there’s the median sales price of houses and it’s apparent improvement. The first problem is the numbers come from realtors, who might have reason to be praying for a bottom, but wait! Tell me oh wise ones, what could be the reason these prices are increasing? Think real hard. Here’s a couple of hints. 60 percent of all sales were former foreclosures. 2007 Subprime. 2008 Alt-A and Option Arms. Even a hillbilly can figure that one out.

  16. Larry Gross Avatar
    Larry Gross

    On the SOQs.

    It’s important I think to understand some specifics.

    My understanding is that no money is diverted from NoVa to RoVa.

    Instead, the State collects a sales tax from across the state and just like other sales tax revenues and the income tax – strictly speaking – the revenues that accrue belong to the State – not NoVa.

    NoVa does get 1% of the State Sales Tax as a separate revenue stream.

    So the state has this pile of money it gets from sales and income tax – across the state and it does not treat it as money that “belongs” to the jurisdiction from whence it was raised.

    Which is no more or no less that the Feds taking your money and then spending it …say on FBI and Coast Guard agencies that are NOT in Virginia.

    We do not get our “share” of FBI or Coast Guard ….

    So – the State does not treat the sales tax money or income tax money as “belonging” to where it came from anymore than the Feds do with their tax revenues.

    So.. it appears to me that the logic behind people feeling that NoVa is getting screwed on the SOQs is based on the idea that the money collected really belongs to NoVa and the State was wrong to take it ..doubly so..if they did not re-allocate it back on a strict proportional basis.

    Before I go further…

    If I’m dead wrong about my impressions.. please set me straight now…

  17. Anonymous Avatar
    Anonymous

    Darrell:

    You might be right. I didn’t think about it from the debt perspective, but I don’t think it mattters, if you have chosen to spend your disposable income on debt service, that’s the way it is.

    My debt is higher now, but it is mostly in property that has increased in value, and it is still a small portion of my income.

    The real trick was in how much gas it takes to drive 15,000 miles. Cars today get a lot better mileage than in 1980, SUV’s notwithstanding.

    I don’t think the forclosures count as sales, but even if they do the trend is up. Anyone waiting for the bottom should keep an eye on this.

    The map of England clearly shows that London gets less in government spending back compared to what it produces in GNP. I suspect a map of Virginia would show similar results.

    “the revenues that accrue belong to the State – not NoVa.”

    True enough, but if NOVA is producing for the state at a higher rate, where SHOULD the state reinvest the most? Investing in NOVA will produce more revenue sooner meaning everyone can enjoy lower tax rates, including ROVA.

    But educaton money is different. There is little reason to believe that investing it in a NOVA child willproduce better results than in a ROVA child.

    Unless you believe that the best predictor of academic achievement is how much the parents make.

    But you DO think that transportation money should be spent where is is paid, right?

    RH

  18. Larry Gross Avatar
    Larry Gross

    I’m just trying to understand the specifics with regard to the feelings that some counties that receive SOQ funding are essentially using that SOQ funding to effectively lower their own real and property tax rates instead of meeting their mandate of ensuring their kids get equivalent resources….

    … and that in doing this – that NoVa is paying more money for SOQs than is fair.

    Now.. I did find this:

    “Section 22.1-97 of the Code of Virginia was amended by the 2003 General Assembly to require a more formal annual reporting process comparing required SOQ and actual local expenditures by local governments.”

    http://jlarc.state.va.us/Reports/Rpt363.pdf page 6

    But, I’m not doing so good at finding the actual data so if someone else has better luck tracking it down.

    But it would ALSO appear to me that in those situations where localities have inappropriately used the SOQs to lower their own tax rates (and there appear to be some that do) – that whatever money that the state recovered, probably by withholding the amount in question from the next years SOQ allocations – and essentially redistributing the recovered funds across all the other school divisions – anyhow.

    In other words, the State retains the money and redistributes anyhow because the entire amount was dedicated to state use and allocation anyhow.

    NoVa STILL would not get monies returned to it – because – the money never really belonged to NoVa in the first place if one recognizes that the State collected these taxes originally for State-dedicated purposes.

    I could be wrong. And if I am, please correct me and set the record straight.

    my hope here – is that all who comment on this – end up on the same page – agreeing as to what the facts are and what they are not.

    It would be a good thing to be able to judge this issue on the merits.

  19. Groveton Avatar
    Groveton

    Larry:

    Your logic is hard to follow. You write:

    “So the state has this pile of money it gets from sales and income tax – across the state and it does not treat it as money that “belongs” to the jurisdiction from whence it was raised.”.

    If you don’t believe that the people who pay the taxes should get most of the money then it’s impossible to take money from one region to give to another since no region owns the money. Of course, this argument gets very hard to understand when I hear people with your mindset say, “We’re not paying any more in gas tax to pay for NoVA’s roads”. So, when you say, “…the State collected these taxes originally for State-dedicated purposes”, one has to wonder whether this same thought holds for the gas tax.

    However, more important, is the relationship between real estate taxes and education funding. Some part of education costs are funded locally (mostly through real estate taxes, as I understand it). Other education costs are funded by the state through money you misconceive as being “owned” by the state (it’s all owned by the taxpayers). So, when the state raises taxes for “education” and certain localities lower their real estate taxes in order to game the system and intentionally short-change their children – should the state transfer more moeny to these localities? Jim Gilmore thought not. His tax education tax hike was actually intended for education and included a “maintenance of effort” clause which would not give localities more state money if they reduced their local support for education. Mark Warner lacked either the foresight or honesty to do this. His tax hike (ostensibly for education) did not include a “maintenance of effort” clause. So, some scheming, anti-children localities lowered their local contribution and got more money from the state (supplied even more from those localities that maintained their funding). However, it should be noted, that not all the “Warner tax scam” money came out of NoVA. Counties like Albermale County did not steal this increased tax money from their children or other children in the Commonwealth. Unfortunately, counties like Henrico did reduce their local contribution and take more state money even though that locality has a high standard of living and absurdly low taxes.

    While I find your latest posts even more disturbing than usual, I applaud the fact that you are (apparently) beginning to understand the pervasive harm done by Virginia’s medievil adherence to a strict Dillon Rule construct. Under this construct, the state “owns” everything and the localities have no ability to consistently manage in the best interests of that locality. So, NoVA (and other right minded localities) correctly accuse the state of stealing tax money advertised to be for education to subsidize lower taxes in anti-children localities. Meanwhile, the residents of more rural localities (perhaps correctly) object to paying more taxes for roads they will never use. Meanwhile, you declare “no problem” because the “state owns everything”.

    Could a centralized, all knowing, all powerful state government provide effective leadership for the people of Virginia? It’s possible but very unlikely. First, the regions in Virginia are too different for a “one size fits all” approach. There is no “one size” and the GA’s hopeless search for a single answer is doomed to fail. Could the GA define a well organized multi-regional approach that would work? Theoretically possible but not with a GA that has far too many part time, ill informed political hacks. There are some good legislators in the GA but not nearly enough to pull of what would be the miracle of a centrally planned, multi-regional answer.

    Like tobacco, the Civil War, Jim Crowe laws, etc. – Virginia is always among the last states to see the light. The forlorn hope of governing a diverse place like Virginia with an all knowing, all powerful, part time GA is just the latest example of institutional intransigence and sloth.

  20. Groveton Avatar
    Groveton

    Larry:

    I just read something interesting on another blog. The Black Velvet Bruce Li site posted a article from it’s blogmaster – Greg Letiecq. The article applauded JAB’s anti-HB6055 post (also copied on this site). In the comments section was a posting from someone claiming to be Dave Albo, one of the bill’s sponsors. I have no way of knowing if it really is Dave Albo but I have no reason to doubt that either. Here is the key point (in my mind):

    “The reason I am supporting the regional transportation concept is that I am trying to find a way to raise $ for transportation and have it stay in NOVA. If new money is put into statewide transportation, as the Governor and Senator Saslaw are proposing, the new $ goes through funding formulas that do not return it to where it was raised. For example, according to the Saslaw and Governor plans for statewide transportation, NOVA pays 40% of all revenue to the state but only receives 14% of the $. Obviously, I do not support that.”.

    So, NoVA (with 25% of the state’s population) pays 40% of the state’s taxes and gets 14% of the state’s spending.

    Please tell me again about your interest in “user pays”. Please tell me again about your thoughts for achieving fairness by taxing NoVA more. Please tell me again how RoVA is paying for NoVA’s roads.

    http://www.bvbl.net/index.php/2008/06/28/is-dave-albo-the-new-russ-potts/#comments

  21. Anonymous Avatar
    Anonymous

    If the facts referenced in Groveton’s last post (10:54) are, indeed, correct, why would any legislator from NoVA (Dem or Rep) vote for such a bill? Why would Saslaw sponsor it? Why isn’t the MSM discussing this? Is the media so wedded to the goal of raising taxes for any purpose, and to any level, that they won’t write about yet one more attack on NoVA taxpayers?

    If NoVA were to secede from Virgina, our motto could be: “The Dumb State” or “Northern Virginia: Proud of self to the point of arrogance; uninformed of reality to the point of ignorance.”

    The longer I live here, the more certain I become of the need to retire among the Hicks and Rubes of America. They, at least, are smart enough to work in their own self interest. I’d like those kind of neighbors.

    TMT

  22. Larry Gross Avatar
    Larry Gross

    It would be so easy to see how this thread could easily expand to a discussion of the legitimacy of any government at any level – Federal, State, Local – to tax citizens and to expend those funds in beneficial ways that are not proportional.

    In other words, if you feel that the State has no legitimate basis for taxing citizens for any purpose then discussing education as one of those purposes is not going to be any more or less relevant than any other purpose.

    For those of us that do believe that the State does have legitimacy in taxing all citizens citizens – there is the issue of proportionality of benefits – for the kinds of services to be provided.

    Does the State have a legitimate interest in expending tax dollars in a way to assure that a kid living in Lee County Virginia receive a minimum standard equivalent to any other location in Virginia?

    If you believe that it does – then do you believe that the State Policy should be that every kid statewide receives the resources needed for him/her to actually receive an equivalent education no matter what the economic status is of his family or his county?

    The “cut” for me on expending taxes for proportional services is demand.

    People don’t have kids so they can get an equivalent free education.

    People don’t personally benefit from that policy.

    When the Government expends taxpayer funds on services for which there is a proven correlation between supply and demand – in my view – demand will expand as long as increased consumption provides a benefit.

    Thus a kid is not going to demand more and more dollars for his education but a commuter WILL demand more and more roads if they allow him/her to maximize their salary and maximize their lifestyle.

    People are not going to purposely damaged their own health to received more and more free health care.

    but people will consume more of any service that personally benefits them if that service if free or costs less than what non-government providers charge for it.

    The original Interstate Highway System creators including Eisenhower and Robert Moses envisioned roads as NOT provided as a taxpayer-funded service because they knew that there was a demand for roads – a demand that would exceed the money expended as long as driving for “free” provided more economic benefit than driving for “fee”.

    Any service provided by the state – where demand continues to expand in proportion to the benefits provided is an indication that it should be provided by the private sector.

    Most kids in Lee County, Va are not going to consume ever increasing education resources elastically.

    In fact, the State has to require that kid to attend school in the first place or else many would not be in school.

    So.. it appears to me – unless otherwise stated – that most folks support the State purpose in educating kids in Lee County but they don’t agree with paying for it.

    Surprise. Surprise.

    Where have we heard this before?

  23. Groveton Avatar
    Groveton

    “Does the State have a legitimate interest in expending tax dollars in a way to assure that a kid living in Lee County Virginia receive a minimum standard equivalent to any other location in Virginia?”.

    You keep asking the wrong question. This has nothing to do with poor kids in Lee County. It has to do with rich kids in Henrico County (and other prosperous localities that lowered their local contribution in the face of rising state taxes – supposedly for education).

    The state completely bungled the 2004 tax increase. It was misrepresented and incompetently implemented.

    These are your heroes in the GA and the Governor’s office. They are not providing minimal education to Lee County, they are providing tax breaks for Henrico County. And, of course, “they” are the taxpayers in places like Prince William County (essentially identical standard of living to Henrico County) and Alberarle County.

    Additionally, your arguments lack any sense of demographics or proportion. In 2005, the Commonwealth of Virginia had 237,858 children under the age of 18 living in poverty (US Census). Of these, 38,006 were living in Northern Virginia jurisdictions. This represents 16% of the children in poverty living in the state (on a base of about 25% of the population). Since the 237,858 children are living in poverty I’d assume that their parents cannot afford to pay sufficient local taxes to provide for their education. Let’s say that their parents cannot reasonably be expected to pay any of their education costs. Let’s also say that the education costs for these high risk children are $7,000 per year. That’s $1.8B per year. Now, let’s divide the localities in Virginia into 4 quartiles. The amount of the $1.8B to be funded from the localities is as follows:

    4th quartile: 0%
    3rd quartile: 15%
    2nd quartile: 35%
    1st quartile: 50%

    Let’s make another simplyifing assumption – let’s assume that NoVA is the entire 1st quartile (not really true, but just to make an example). NoVA would beresponsible for $900M per year in educational transfer payments. However, since NoVA has 16% of the children living in poverty it also get 16% of the $1.8B. That reduces the $900M per year to a net of $612M ($900M – $288M).

    That’s it. The maximum transfer of taxes collected on NoVA’s 2.4M residents is $612M per year. EVERYTHING ELSE IS USER PAYS.

    Now Larry – something you hate – reality. I make Virginia’s proposed budget to be about $36B per year. Dave Albo says NoVA pays 40% of that budget – which is $14.4B. He further states that NoVA gets 14% of the payments – or $5B. I guess that means $9.4B is transferred elsewhere. That’s a lot more than the cost of educating a pro-rata share of poor children. In fact, it’s about 8 times as much as the pro-rata cost of providing “minimal educational funding for places like Lee County”.

    Larry, your arguments are lost. Like cockroaches in the kitchen, they are being scattered into hiding by the bright light of fact.

  24. Anonymous Avatar
    Anonymous

    I think Albo is wrong. It is more like 48%, but I’d have to check my sources.

    RH

  25. Larry Gross Avatar
    Larry Gross

    Groveton – you’re arguing basically that the taxes that the state collects – if not allocated back in proportion are “stolen”.

    You argument pretends that after you properly “account” for the kids in poverty that the rest – is “stolen” since you neglected to account for the other ways that if might also be spent on “needs”.

    You’re basically arguing than any money taxed by the State in NoVa .. is “stolen” if you can’t account for how it is spent or that you can, but you don’t agree.

    That’s fine but in the end, are you not making the same argument that Ray does – that only the taxes for the purposes you approve of are fair and legal?

    Ray uses his argument at the personal level.

    Are you not using the same basic philosophy but at the NoVa level?

  26. Anonymous Avatar
    Anonymous

    Larry, I don’t think that the problem is sending NoVA tax dollars to low-income areas of the state. The problem, IMO, is two-fold. One, there’s poor correlation between state aid and average income. Aid transfers from the state should go only to the poorest districts and not to anywhere else. The state should play a smaller financial role in education. Places like Henrico County should not get a dime from the Commonwealth. And what they’d need to pay in state taxes would decrease. Of course, most of us would pay higher local taxes for schools. But that, in turn, would likely cause more scrutiny of just how Fairfax or Henrico operates their schools.

    Second, there must be a stronger local effort made everywhere to fund their schools. While Lee County probably needs considerable state aid to operate schools, Lee County residents should also make a proportionate local payment for their schools too. If people in NoVA are paying $4000 in real estate taxes, no one in Lee County should be paying $200 in real estate taxes.

    TMT

  27. Anonymous Avatar
    Anonymous

    “That’s fine but in the end, are you not making the same argument that Ray does – that only the taxes for the purposes you approve of are fair and legal?”

    Where do you get this stuff? I consistently make the distinction between legal, fair, and ethical. Whether I personally approve or not makes next to zero difference.

    Your argument is that it is OK for the state to redistribute funds as it sees fit, because every child deserves at least a fighting chance to get some minimum level of education.

    I don’t see anything in Groveton’s statements to suggest that he would fundamentally disagree, but he points out that the procedure we use to do that is seriously broken. Nothing is what it appears to be: the sources and uses of monies are entirely fungible, and the process of even naming the sources and uses is politically corrupt.

    We have a procedure for determining the value of 2+2 that almost no one argues with. But beyond that, we seem to have a total failure at figuring out a procedure for what is reasonable, let alone fair and equitable.

    But, on a gross level Groveton’s argument is unassailable. NOVA is user pays on everything AND the send more money down state. On top of that, a good portion of the money, that we agree is transferred for noble purposes, in fact ought to be transferred to NOVA.

    Often, I spend time looking for something around the Farm. If I once had something and don’t have it now, then I either misplaced it, sold it, or else it was stolen.

    That is my simple minded 2+2 procedure for figuring out if something is stolen. On the other hand, if I sold it (whther at a profit or a loss) I at least thought I got something back in proportion.

    So, it seems to me that we are not arguing about what constitutes stealing, we are arguing about how to allocate proportions. And if we do it wrong, then it is tantamount to stealing. As you point out, no one has a right to overallocate to themselves, a share of other people’s property.

    As a result, I don’t think it is helpful to put “stolen” in quotes. I think we pretty much understand what that is. The problem comes down to understanding what is property, and what it is worth.

    Initial allocation, in other words. It’s a property rights thing. Once you get that right, you can let the market, and even politicians, decide what trades to make.

    When you say,
    “We’re not paying any more in gas tax to pay for NoVA’s roads”. That is a property rights argument, and it is pretty clear, even though you seem to think that property rights is nonsense, the rest of the time.

    Groveton has done a good job of pointing out what happens when you don’t call things what they are. When you don’t make it clear who owns what. You start off with a bunch of tax buckets and that allocation looks pretty reasonable. But then you let some people pour from one bucket to another – in a way that changes the allocation.

    It is a shell game, and shell games are usually designed to fleece the shill.

    Steal, in other words.

    RH

  28. Groveton Avatar
    Groveton

    Larry:

    What really bites my butt is the “user pays” rhetoric. That and the “we aren’t paying for NoVA’s roads” rejoinder.

    NoVA is alrady paying for everything it uses. And a huge part of the state education bill. And a whole lot more. So, when people say that we need to sell lanes on the Beltway to Flour/Transurban so that NoVA’s “users” can pay $1 / mile to recover their costs, I call it what it is – BS.

    The “user pays” issue in Virginia is not that NoVA “users” are failing to pay their way. The issue is the many other places that are failing to pay their way. And this goes a long, long way beyond educating poor kids.

    But I’ll give you some credit. You don’t claim to be a conservative who is opposed to “big government” and “the welfare state”. You want to rob NoVA without all the fanfare. It’s the Republicans in state politics who claim that they want small government and low taxes (all the while dreaming up scams to bilk others) who grate on my nerves. The sooner the next election comes and more of these people are thrown out – the better.

  29. Larry Gross Avatar
    Larry Gross

    Actually I don’t want to robbing NoVa.

    But I think it important to recognize that the State can and does have direct taxing authority for both income and sales taxes and that it is at it’s discretion as to how to allocate “needs”.

    For instance, these same less economically secure counties also receive money for deputies, social service workers, and others that, in theory the locality cannot afford to pay – out of the the same monies collected at the State level.

    “Places like Henrico County should not get a dime from the Commonwealth.” TMT

    I agree with TMT and if this is your argument, I also agree.

    It is very hard to go through that list of counties that receive “aid” and not wonder a bit.

    I assume that ya’ll also know that Fairfax is also on the list of counties that receive SOQ money?

    Would the answer be that no SOQ money goes to any county that can afford to fully fund it’s own needs?

    So, we’d remove Fairfax from getting any SOQ money at all and ditto Henrico, etc.. and the ALL of the SOQ money is spent on the economically weak counties?

    But how does the state FORCE localities to charge enough taxes to pay their share?

    How does the state put leverage on them..without in the end.. having the kids not get the resources that are needed?

  30. Groveton Avatar
    Groveton

    “So, we’d remove Fairfax from getting any SOQ money at all and ditto Henrico, etc.. and the ALL of the SOQ money is spent on the economically weak counties?”.

    Yes.

    “But how does the state FORCE localities to charge enough taxes to pay their share?”.

    It doesn’t. The state collects only enough money to distribute some income to the neediest localities. And that is done by a truly graduated income tax. Localities that decide to short-change their kids end up with short-changed kids. While this would be sad it is better than today’s approach where localities short-change their kids and then expect other localities to make up for this “short-changing” through the state sponsored transfer.

    Anybody who doesn’t like the way their locality is managing education can either try to change the approach or move to a locality where they like the approach better. This happens today. How many times have you heard real estate agents say that a customer should move to this or that locale becuase they have good schools?

  31. Anonymous Avatar
    Anonymous

    No state education money for Fairfax? I agree. It’s stupid to send lots of dollars to Richmond so Fairfax County can receive pennies back. We’d be better off with a plan that sent fewer dollars to Richmond and received nothing back from the state for K-12 education.

    I suspect that this would also result in a lot skinnier FCPS staff as real estate taxes would go up higher and people would start questioning just how FCPS spends the money.

    I picked up my daughter from work today. She received her first ever paycheck. It was fun to watch her stare at her pay stub. She was obviously thinking about the difference between her gross pay and her take home pay. I told that she too was now paying for government. It no longer was this benevolent creature that dispensed goodness from the sky. It has to be fed, and she was now feeding it.

    TMT

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