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December 31, 2014

Arlington County’s 10-Year Record of Profligacy

On two occasions in 2014, Arlington County voters thought their County Board was profligate, based upon such vanity projects as the $350 million Columbia Pike streetcar project, the $80 million aquatics center, and a $1 million bus stop (still famous as evidenced by its appearance on this news report last week), not to mention a $5 million bailout of Signature Theatre and the subsidies poured into the Artisphere before the plug was pulled on this tax-laundering scam earlier this month.

Tomorrow, the County Board chair will set her 2015 priorities , much as the 2014 Board chair did at the January 1, 2014 so-called organizational meeting. (see this January 1, 2014 press release) At the Board’s organization meeting last year, the 2014 chair said the county would “deepen (its) commitment to reduce, reuse, and recycle.” Unfortunately, he was referring to “his passionate commitment to the environment” rather than to the efficient and economical use of taxpayer resources. (See above press release).

The important question, then, is whether the 2015 Board chair will put taxpayers ahead of Board vanity projects or the many special interests seeking to feed at the county trough.

The question must be asked because of our just-completed analysis of statistical data, specifically Table D-1, General Governmental Expenditures by Function (linked here) in Arlington County’s Fiscal Year 2014 Comprehensive Annual Financial Report (CAFR), which contains the latest audited financial statements. The FY 2014 CAFRe was released at the Board’s December meeting. General government expenditures account for most general government function of the County and the Schools.

Table D-1 shows:

  • Total governmental expenditures increased from $793.41 million in FY 2005 to $1,185.96 million in FY 2014, an increase of 49.5% over the 10-year period.
  • The table breaks down expenditures by such functions as public safety, public works/environmental services, health and welfare, education, debt service, and transit (WMATA).
  • Ten-year increases ranged from 51.37% for public safety, 56.95% public works/environmental services, 28.35% for health and welfare, 30.16^ for culture/recreation, 47.41% for education, 64.58% for debt service, and 138.93% for transit (WMATA).

Table D-1 table has one positive light in the Board’s 10-year history of profligacy. Although the annual increase in total spending averaged 4.95%, the increase from FY 2013 to FY 2014 slowed to 2.73%, or just above the 10-year annual rate of inflation of 2.58%.

Most importantly, however, let’s look at what total spending would have been “if” the Arlington County Board had been able to limit spending to increases in population and inflation, the same as the look taken by Virginia’s Joint Legislative Audit Review Commission (JLARC) when it looks at the 10-year increases in state spending (see our December 7, 2014 Growls).

From July 2004 to June 2014 (the start of FY 2004 to the end of FY 2014), CPI-U increased 25.84%, according to Table 24 of the September 2014 CPI Detailed Report (page 71). over the same period, Arlington County’s population increased from 198,267 in FY 2005 to 215,000 in FY 2014, according to Table K of the CAFR (page 187), or 8.44%.

Some computations are now in order:

  • Total per capita spending in FY 2005 was $4,001.71
  • Total per capita spending in FY 2014, using the Department of Labor’s Bureau of Labor Statistics’ CPI Inflation Calculator, would be $4,838.75.
  • Adjusted for both inflation and population increases, total county spending in FY 2014 would be $1,040.33 million rather than $1,185.86 million.

So, according to the logic presented above, we can now measure just how profligate the Arlington County Board was for the period FY 2005 through FY 2014. The answer is the Board was profligate to the tune of just over $145 million. Bringing that down to a more understandable number, over 10 years, the County Board grabbed about an extra $725 from each Arlington resident, or an annual average of $73 per capita.

Call it Arlington County’s “vanity tax,” if you will. And how was that “vanity tax” used? Obviously, it's not possible to tell from the CAFR, but it is entirely possible that the "revenue" from the "vanity tax" was used to pay for the County Board’s vanity projects.

If you are an Arlington County taxpayer reading this Growls, and you are concerned with the pace of county spending, you are urged to write or call the Arlington County Board. Just click-on the link below:

  • Call the Board office at (703) 228-3130.

If they ask, tell them ACTA sent you!

December 30, 2014

A Thought on Free Market Capitalism

"History provides ample evidence that when allowed to function properly free market capitalism generates massive national prosperity with high employment, a strong currency and rising standards of living. It is only when the state manipulates and over regulates free markets that capitalism fails. However, capitalism usually takes the blame for the failures of statism.

"Piketty asserts that capitalism is "inherently unstable because it concentrates wealth and income progressively over time, leaving behind an impoverished majority. ..." He proscribes even an international wealth tax and higher income taxes, above 80 percent, to redistribute rather than to invest savings. This would essentially create a state monopoly on wealth. But again, history tends to demonstrate that state monopolies create poverty for all but the politically connected elite."

~ John Browne, Senior Economic Consultant to Euro Pacific Capital

Source: His 6/12/14 op-ed, "Is Inequality Cause by Capitalism or Statism" posted at Real Clear Markets

December 22, 2014

Artisphere, Signature Theatre, and the Arts

This may be the last Growls until after El Growler Grande returns from spending Christmas with family. I wish everyone a joyful Christmas, and a Happy 2015.

The Arlington Sun Gazette's Scott McCaffrey has three items posted today about the three subject topics. First. he writes that leaders of Signature Theatre have promised the latest "bailout will be the last." Here's how McCaffrey begins the first article:

"Officials of Signature Theatre say they are on track to long-term solvency, and will not need to come back to Arlington taxpayers for yet another bailout.

"They made the case as County Board members on Dec. 17 approved a multi-million-dollar package of loans and funding to help the Shirlington-based nonprofit theater troupe.

“This restructuring is a viable plan to ensure Signature’s long-term sustainability,” the group’s managing director, Maggie Boland, told County Board members before the 5-0 vote.

"The package, worked out over the past year between the theater troupe, its major lender and the county government, will “transform Signature – for the better, and for good,” Boland said."

In a second article, McCaffrey notes  that while the "Artisphere's days are numbered," the county is still committed to the arts. Again, here's the beginning of his report:

"The proposal to pull the plug on the Arlington County government’s Artisphere does not mean abandonment of either the arts or Rosslyn, County Manager Barbara Donnellan told County Board members last week.

“This is a repositioning, not a retreat,” Donnellan said Dec. 17 when recommending that the financially beleaguered arts center on Wilson Boulevard be shuttered for good by the middle of 2015.

"Donnellan earlier in the year had been tasked by County Board members with coming up with a recommendation related to the four-year-old arts center, which has operated in a sea of red ink from Day One.

"Donnellan sketched out two options – either continuing to use the Artisphere space as a conference venue or other use, or returning the space to the leaseholder six years early and being done with it.

"Under either option, it appears the Artisphere is a goner just years after Arlington officials proclaimed it a jewel in their efforts to be a world-class community.

"Donnellan told the board she could not make a financial case for continuing operations."

The third of McCaffrey's three articles comes from a post this morning in his Editor's Notebook blog about a December surprise, writing:

"I said it before I left town last Tuesday: There’s always some big news that breaks when I’m down in Florida at the end of the year. And this year, it was Arlington County Manager Barbara Donnellan’s proposal to scuttle the beleaguered Artisphere arts center after four years and gallons and gallons of red ink.

"We should not shed crocodile tears; this county endeavor was ill-planned and poorly executed from the start. In fact, going back in our archives, there were predictions as early as April 2011 (just nine months after the facility’s opening) that it was doomed.

"Here is what I wrote right here on 4/1/2011: “The Rosslyn facility may end up getting itself righted, or may wind up being the type of boondoggle that happens when grand expectations come into conflict with grim reality. Until we know for sure one way or another, county taxpayers will be footing the bill to cover the costs, as government leaders don’t appear to be willing (yet) to downscale operations.”

"Took government officials more than three years to come to a final conclusion, but they, too, appear to have seen the writing on the wall.

"It sure does seem the government is battening the hatches, doesn’t it? The big question: Are the decisions to close the Artisphere, to put on hold the aquatics center and to drop the Columbia Pike/Crystal City streetcar projects all intertwined? If they are, then county leaders know something about Arlington’s fiscal health that the rest of us have not been clued in on."

Read the entire pieces online, or be sure to read all three items in this week's edition of the Arlington Sun Gazette.

Again, best wishes for a joyful and peaceful Christmas, and that 2015 may be happy for you.

December 21, 2014

Can Northern Virginia's Business Environment be Improved?

The Arlington Sun Gazette's Brian Trompeter reports in an online article today that according to George Mason University economist Stephen Fuller, "technology and international business are keys to Northern Virginia's resurgence."

Trompeter begins his reporting, saying:

"Faced with reduced federal spending, Northern Virginia must harness its highly educated workforce and become a more attractive place for international and high-technology companies to do business, George Mason University economist Stephen Fuller said.

"Speaking Dec. 16 at Northern Virginia Association of Realtors’ headquarters in Merrifield, Fuller said the region needs to redeploy its existing economic base – something far easier to do with “brain workers” than with auto workers.

"The Washington area is home to 180 foreign consulates and people who speak all the world’s languages, thus making it an ideal hub for international business, he said.

"Fuller predicted the region’s economic success would be predicated on cyber-security, bio-informatics and other technology- and engineering-based businesses.

< . . . >

"Federal spending accounted for 40 percent of the local area’s gross domestic product in 2010. That figure now stands at 35 percent and likely will drop to 25 percent by 2020, Fuller said. (emphasis added)

“This is a structural shift,” he said. “We’ve been a company town for 210 years. Ours will [continue to] be a company town, but 15 percent smaller.”

Readers of Growls interested in learning more about the Northern Virginia economy are urged to read Trompeter's entire article here.

December 20, 2014

Accurate Spending Reports Won't Help Taxpayers?

In a report posted earlier this week, the Washington Examiner's Sarah Westwood writes that "Federal department's CFO says accurate spending reports won't help taxpayers." She begins her reporting this way:

“The costs of ensuring 100 percent accuracy ... would far outweigh the benefit to the public.”

"That's how a top federal official explained opposition to a government watchdog's call on her department to do a better job of accounting for spending on conferences.

"The comment by Ellen Murray, the department's assistant secretary for financial services and chief financial officer, came in response to an investigation by the inspector general of how government workers spent $1.4 million on conferences in 2012 that was never reported.

"The IG recommended that HHS officials report actual conference costs instead of estimates after finding discrepancies in the actual costs for four of the events held that year. The four events included an international AIDS conference, an awards ceremony and two medical preparedness meetings.

"In 2012, HHS sponsored 140 conferences that cost more than $100,000 each, according to the report. The agency spent more than $56 million on conferences that year.

"In her response to the IG, Murray added that “striving for perfection would put the department at risk of not fulfilling the statutory requirement for a timely report,” citing the availability of data as a factor in its ability to produce accurate reports."

Westwood's reporting includes much more, which you can read here. Her reporting is based on an HHS Inspector General report released earlier this month, and is accessible at the Washington Examiner website.

The HHS bureaucrat's reasoning is bizarre, and raises the question of whether she has any knowledge of accounting. Ether that, or HHS has a poorly designed accounting system.

Readers of Growls who are concerned about waste, fraud, and abuse in federal spending are urged to  contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- Rep. Moran is retiring at the end of the current Congress. We'll update the link for incoming Rep. Don Beyer next month.

And, tell them ACTA sent you.

December 19, 2014

Can Government Get Anything Right?

If you think the federal government is indeed falling apart, an above-the-fold story on the front page of the Tuesday, December 16, 2014 Washington Post would be all the proof you need. The Post's David Fahrenthold reports that construction of a test tower by NASA continued after the rocket project for which it was built was scrubbed.

The tower constructed at the Stennis Space Center in Mississippi was originally estimated to cost $119 million with a 2010 completion date. Here are the basic facts in Fahrenthold's reporting:

"In June, NASA finished work on a huge construction project here in Mississippi: a $349 million laboratory tower, designed to test a new rocket engine in a chamber that mimicked the vacuum of space.

"Then, NASA did something odd.

"As soon as the work was done, it shut the tower down. The project was officially “mothballed” — closed up and left empty — without ever being used.

“You lock the door, so nobody gets in and hurts themselves,” said Daniel Dumbacher, a former NASA official who oversaw the project.

The reason for the shutdown: The new tower — called the A-3 test stand — was useless. Just as expected. The rocket program it was designed for had been canceled in 2010.

"But, at first, cautious NASA bureaucrats didn’t want to stop the construction on their own authority. And then Congress — at the urging of a senator from Mississippi — swooped in and ordered the agency to finish the tower, no matter what.

"The result was that NASA spent four more years building something it didn’t need. Now, the agency will spend about $700,000 a year to maintain it in disuse."

The story runs to almost two pages, and includes a graphical timeline of NASA's mothballed test towers. Read the entire story and timeline here to learn all the details and context.

Over the past few years, we've had sequestration and continuing resolutions. Now Congress just passed a CRomnibus. Unless Congress reverts to "regular business" where Congress holds detailed hearings of appropriations bills, there will likely be more examples of wasteful projects such as "NASA's $349 million monument to drift."

Kudos to David Fahrenthold for his detailed investigative reporting.

Readers of Growls who are concerned about the future of the federal government are urged to  contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- Rep. Moran is retiring at the end of the current Congress. We'll update the link for incoming Rep. Don Beyer next month.

And, tell them ACTA sent you.

December 18, 2014

Senator Tom Coburn's Retirement

In a search of Growls. you are likely to find more references to U.S. Senator Dr. Tom Coburn of Oklahoma than any other current member of Congress. There is probably no politician today on Capitol Hill whose name would come to mind as a friend of America's taxpayers.

Consequently, we were pleased to read a short op-ed today on the editorial pages of Investor's Business Daily by Kerry Jackson who notes that America is losing a senator who "got it." Jackson writes:

"Sen. Tom Coburn made more sense in a few words in his farewell speech than most congressmen make across entire careers that drag on for decades.

"Your whole goal is to protect the United States of America, its Constitution and its liberties," the retiring Oklahoma Republican told his colleagues last week. "It's not to provide benefits for your state."

"Nor is it, we might add, lawmakers' job to meddle in personal affairs, establish a boot-on-the-neck regulatory state, increase the size and strength of government, or cast the state in the role of a glorified nanny. Yet that's what they've been doing for decades now.

"There are too many Harry Reids, Barbara Boxers and Jerrold Nadlers in Washington and not enough Tom Coburns."

A list of oversight reports released by Dr. Coburn's office can be found here. Since Dr. Coburn is retiring at the end of 2014, I called his office this week, and learned the reports, e.g., his annual wastebooks, will likely remain available in a personal library.

Kudos to Dr. Tom Coburn. We wish him well on his retirement.

December 17, 2014

The End is Near for Arlington County's Artisphere?

The headline of the story by the Washington Post's Patricia Sullivan reads "Arlington County poised to close money-losing Artisphere arts center in June." Here's the beginning of her report:

"Arlington’s money-losing Artisphere should close in June because it has failed to draw enough visitors or supporters to break even after years of government subsidy, County Manager Barbara Donnellan said Wednesday.

"The recommendation to close the Rosslyn arts center, which members of the County Board said they would probably support, would save about $2.5 million per year and eliminate the jobs of 12 full-time and 20 part-time employees. Donnellan said the Arlington government would attempt to find other county jobs for those employees.

"The proposal is the latest example of fiscal caution by the county government, which last month canceled plans for two expensive streetcar projects after a leading streetcar critic was reelected to the County Board."

Sullivan also discussed the prior criticism regarding the public subsidies provided to the Artisphere:

"Public spending on Artisphere has been criticized by fiscal conservatives in Arlington for years. The issue received renewed attention when County Board member John Vihstadt (I) made public spending on capital projects a major focal point of his election campaign.

"Vihstadt was elected in April to fill an empty board seat and easily won a full four-year term in November. He took his second oath of office Wednesday, between the board’s afternoon and evening meetings. In a brief interview, he said he didn’t intend to gloat, but he thought Donnellan’s recommendation was the right decision.

“From the beginning, officials had an unrealistic expectation that the Artisphere would be self-sustaining,” Vihstadt said. “I think the county manager made a cold, calculated and reality-based decision that the Artisphere would not be successful without a large continuing subsidy.”

"Other board members said they would work to make sure Rosslyn is not left without an arts or cultural component."

There's more in Ms. Sullivan's report. The entire report is here, and includes a night-time picture in case you've never visited the Arlisphere.

The online news site ARLnow.com includes the following in their report posted this afternoon:

"Donnellan made the recommendation at today’s County Board meeting, after being charged by the Board earlier this year to study Artisphere and suggest a way forward for the money-losing, county-run center.

“I will be recommending that the county close the Artisphere as a cultural center in fiscal year 2016,” Donnellan said. “This was a business decision… this was a tough decision, a disappointing one. The reality is that the Artisphere has not lived up to projections.”

"Donnellan said Artisphere, in her opinion, would require “substantial ongoing tax support.”

“That is not what we promised our community when we opened Artisphere,” she said. Artisphere will remain open through June 30. It will close after that, if the County Board adopts Donnellan’s recommendation. After Donnellan gave her report, it became clear that the Board was behind her decision and it’s likely the art center will close on June 30.

“I support what you suggested, that next June, Artisphere would close as we know it,” Board Chair Jay Fisette said. “My hope is whatever option will move forward on our economic competitiveness goals one way or another.”

"County Board member John Vihstadt, who had used the Artisphere as an example of wasteful county spending in his election campaign this year, obliquely referenced the county’s cancellation of the streetcar last month."

Washington City Paper is also reporting on County Manager Barbara Donellan's recommendation to close the Artisphere.

Closing the Artisphere is welcome news for Arlington County taxpayers. However, the good news is balanced by not so good news. While writing this growls, an e-mail from Arlington County's public affairs shop announcing, "The Arlington County Board today approved a new fnancing plan for Signature Theatre, a three-way agreement between the award-winning non-profit theater company, its private lenders and the County." Unfortunately, the press release is not yet posted at the county's website.

December 16, 2014

A Federal Gummint Program Susceptible to Fraud. Who Knew?

CNS News' Susan Jones wrote today of a new U.S. General Accountability Office (GAO) report. Her article is entitled "Social Security disability programs (are) susceptible to physician-assisted fraud." Here's the core or Jones' reporting:

"We keep putting people on disability who are not truly disabled," Sen. Tom Coburn (R-Okla.), a medical doctor, told the House Oversight Committee this past June.

"Three years before that, Coburn and Sen. Orrin Hatch (R-Utah) expressed concern that Social Security disability benefits were being used as an extension of unemployment benefits.

"Now, a new report from the Government Accountability Office says the Social Security Administration remains vulnerable to fraud, particularly when unscrupulous doctors submit false claims.

"While the full extent and nature of physician-assisted fraud is difficult to measure, each fraudulent claim allowed by SSA has the potential to cost the government several hundred thousand dollars over the life of the claimant and places an additional financial burden on these programs at a time when SSA estimates that its disability trust fund will be depleted and unable to pay full benefits to individuals starting in 2016," the report said."

Ms. Jones' article has many more details. Read the entire article here.

GAO summarized their findings in the report's highlights (GAO 15-19; November 2014) this way:

"The Social Security Administration (SSA) has policies and procedures in place for detecting and preventing fraud with regard to disability benefit claims. However, GAO identified a number of areas that could leave the agency vulnerable to physician-assisted fraud and other fraudulent claims:

  • SSA relies heavily on front-line staff in the offices of its disability determination services (DDS)—which have responsibility for reviewing medical evidence—to detect and prevent potential fraud. However, staff said it is difficult to detect suspicious patterns across claims, as directed by SSA policy, given the large number of claims and volume of medical information they review. Moreover, DDS offices generally assign claims randomly, so staff said it would only be by chance that they would review evidence from the same physician.
  • SSA and, in turn, DDS performance measures that focus on prompt processing can create a disincentive for front-line staff to report potential fraud because of the time it requires to develop a fraud referral. Four of the five DDS offices GAO visited count time that staff spend on documenting potential fraud and developing fraud referrals against their processing time. Some staff at these DDS offices said this creates a reluctance to report potential fraud.
  • The extent of anti-fraud training for staff varied among the five offices GAO visited and was often limited. SSA requires all DDSs to provide training to newly hired staff that includes general information on how to identify potential fraud, but does not require additional training. The five DDS offices GAO visited varied in whether staff received refresher training and its content— such as how to spot suspicious medical evidence from physicians—and staff at all levels said they needed more training on these issues.
  • SSA has not fully evaluated the risk associated with accepting medical evidence from physicians who are barred from participating in federal health programs. Although information from these physicians is not necessarily fraudulent, it could be associated with questionable disability determinations.

"SSA has launched several initiatives to detect and prevent potential fraud, but their success is hampered by a lack of planning, data, and coordination. For instance, SSA is developing computer models that can draw from recent fraud cases to anticipate potentially fraudulent claims going forward. This effort has the potential to address vulnerabilities with existing fraud detection practices by, for example, helping to identify suspicious patterns of medical evidence. However, SSA has not yet articulated a plan for implementation, assigned responsibility for this initiative within the agency, or identified how the agency will obtain key pieces of data to identify physicians who are currently not tracked in existing claims’ management systems. Furthermore, SSA is developing other initiatives, such as a centralized fraud prevention unit and analysis to detect patterns in disability appeals cases that could indicate fraud. However, these initiatives are still in the early stages of development and it is not clear how they will be coordinated or work with existing detection activities."

Readers of Growls who are concerned about fraud in federal government programs are urged to  contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you.

December 15, 2014

Efforts to Fight Medicare Fraud are being Blocked

At Breitbart News' Big Government website today, Mike Flynn writes that the President and Congress are blocking efforts "to combat Medicare fraud." Flynn begins this way:

"The Department of Health and Human Services reports that the error rate for Medicare payments increased to 12.7% of total fee-for-service reimbursements last year. This is up almost 50% since 2012 and represents a $46 billion annual loss for the health program. Despite this, the Obama Administration has suspended an audit program that had already recovered more than $8 billion in improper payments.

"The Recovery Audit Contractor (RAC) program, initiated in 2010, is charged with ferreting out waste and fraud in the giant Medicare program. The federal government contracts with private companies to investigate Medicare billing records and capture any improper payments. The companies are allowed to keep 9-12.5% of any money recovered, providing a market incentive to identify fraud. In 2012, before the Obama Administration put a hold on the program, RAC companies found $2.3 billion in improper payments.

"In October 2013, the Obama administration undertook a series of steps to curtail the fraud recovery program. Over subsequent months, the administration suspended auditing activity and put a hold on awarding new contracts to police Medicare billing. Existing contracts have been extended only for "administrative and transition activities." In other words, the audits are supposed to wind down.

"The suspension of the audit program is a victory for the American Hospital Association, which has led a lobbying campaign against the program. In a series of letters, the AHA has not only lobbied against the RAC program, but even auditing efforts by the federal government's own Office of the Inspector General."

Flynn also points out Congress' efforts to block the effort to fight fraud, writing:

"One piece of legislation, introduced by House Republicans, would block audits of Medicare providers unless their estimated error rate exceeded 40% of total billing. In other words, more than one-third of bills submitted to Medicare could be fraudulent before any audit threshold was triggered. Earlier this year, Congress passed legislation to suspend all audits for another 6 months."

If Americans are wondering even more about the nation's fiscal future after this past weekend's passage of the $1.1 trillion CRomnibus, Mike Flynn's report must have Americans shaking their heads with almost takeoff velocity, including asking themselves the same question as Flynn asks in concluding his report:

"If the nation isn't serious about curtailing spending that, by law, shouldn't exist, what hope is there to curtail the spending choices we've actually made?"

You can read Mike Flynn's entire reporting here. We growled about the CRomnibus on December 9, 2014.

Readers of Growls who are concerned about federal spending are urged to  contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you.

December 14, 2014

A Thought on the Cost of Government Regulation

"Dodd–Frank (Wall Street Reform and Consumer Protection Act) seriously undermines people's living standards. Whenever laws take resources away from the production of goods and services people want and allocate those resources for the paperwork government demands, living standards decline."

~ Robert Genetski, Economist and Policy Advisor, Heartland Institute

Source: His Op-Ed, posted December 12, 2014, Investor's Business Daily

December 13, 2014

China Climate Accord. A Bad Deal for U.S.?

First, a bit of background. The headline of a November 14, 2014 story by Fox News' Megan Gannon says, "US-China climate accord gives hope for global agreement." She introduces the story this way:

"The United States and China surprised climate-policy watchers this week by announcing a rare accord to cut carbon pollution. As details of the agreement are released, experts are hopeful that cooperation between the world's two biggest economies, and two biggest carbon emitters, bodes well for an as-yet elusive global climate pact.

"For many years, the reluctance of the U.S. and China to make strong commitments has been an oft-used excuse by other countries to not take action," said Anthony Leiserowitz, director of the Yale Project on ClimateChange Communication.

"In fact, many in the U.S. Congress have resisted taking action because they argued that China wasn't acting," Leiserowitz told Live Science in an email. "And many Chinese leaders have long used the same argument about the United States to avoid making their own commitments. This very public and early agreement by the two largest national emitters in the world should help break the long-standing logjam in the international negotiations."

"On the sidelines of the Asia-Pacific Economic Cooperation (APEC) meetingin Beijing,U.S. President Barack Obama and Chinese President Xi Jinping announced their goals to cut emissions of carbon dioxide (CO2), the main culprit behind human-caused global warming."

A few days later, Steve Cohen of Columbia University's Earth Institute wrote about "the importance of the U.S. - China climate accord for the Huffington Post, explaining:

"Last week, the United States pledged to reduce its greenhouse gas emissions by 26% from 2005 levels before 2025, and China agreed to stop growing its carbon emissions by 2030. Since we do not have a world government and are unlikely to get one anytime soon, we are dependent on the actions of sovereign nations if we are to mitigate global warming. Setting aspirational goals like this is an important move by these two powerful nations, and is a significant and meaningful act. Of course, no one can guarantee that either China or the U.S. will actually meet specific targets. Such assurances are always suspect since, in the end, powerful nations always retain a measure of control over their own destiny. Self-interest always guides the leaders of China and the U.S. and they have clearly decided that a slow transition away from fossil fuels is in their national interest. It is their sense of shared or mutual self-interest that led to this agreement and provides confidence that it will be implemented.

"It appears that the futile quest for some kind of binding international treaty on climate change may finally be coming to an end. Energy is simply too central to national economic life for a nation to agree to reductions in greenhouse gases until the costs of using renewable energy are lower than those incurred through the use of fossil fuels. The negotiations planned for late 2015 in Paris seem to have abandoned the goal of reaching a binding set of global emission reductions . . . ."

Now that several weeks have passed us by, it seems it's time to take a sober look at the U.S.-China climate accord. Thankfully, Fred Singer, professor emeritus at the University of Virginia whose specialty is atmospheric and space physics did that in a detailed article posted on Monday, December 8, 2014 at the American Thinker. Dr. Singer was also founding director of the U.S. Weather Satellite Service, among other significant positions. According to Singer:

"The world is fascinated by the November 12 climate agreement between President Obama and Chinese President Xi.  Has China finally decided to “fight climate change”?  My personal opinion is that China is taking advantage of White House science ignorance and anxiety about future climate change, hoping thereby to gain commercial and strategic advantages against the United States.

"The bilateral US-China Climate Agreement, inked in Beijing on Nov 12, makes virtually no demands on the Chinese.  It simply states that at or about the year 2030, they will start to reduce their emissions of CO2; in the meantime, they can emit as much as they want.  So they have 15 more years to add more coal-fired power plants to any extent they wish.  It is very likely that by 2030, China’s population will have stopped growing and a large part will be living in urban apartment blocks, having bought all of the gadgets they need: TVs, refrigerators, computers, etc. -- and that their demand for electric power will have saturated.

"On the other hand, the US commitment is rather severe: an actual reduction of 26-28% in CO2 emissions by 2025, just 10 years away.  This goal can only be achieved by the substitution of natural gas for coal-fired power plants, and the eventual replacement of much of natural gas with unreliable and uneconomic “renewables,” such as wind and solar.  As Obama promised in 2008, electricity costs will “sky-rocket.”

"Indeed, this seems to be the US plan -- as spelled out by the EPA, under the direction of the White House.  All the China agreement really does is to make Obama look good to his Green constituency, besides providing a convenient “club” to use for his “war on coal.”  The expected effect on the global climate is zero, zilch, nada.

"From the Chinese point of view, this is an ideal arrangement, and has both commercial and strategic benefits.  It makes energy more expensive in the United States and Europe; it cripples the industrial base of the Western World.  And hand-in-hand with economic strength goes military strength."

Other topics Dr. Singer discusses in the article includes explaining that climate science is not yet settled; the "inscrutable Chinese;" and, whether there will be another Kyoto protocol. The entire article is here.

More information about global warming can be found at the Science and Environmental Policy Project, Dr. Roy Spencer's Global Warming blog, Dr. Judith Curry's Climate, etc., and Marc Morano's Climate Depot. These are just a few of numerous websites that honestly present the skeptical view of global warming.

You can find an extensive list of Dr. Singer's articles and blog posts at American Thinker.

December 12, 2014

Arlington County Board to Bail Out Signature Theatre. Again!

In a online story posted this morning the Arlington Sun Gazette's Scott McCaffrey reports that "Arlington taxpayers to bail out Signature Theatre a second time."

Here's how McCaffrey introduces the bailout story:

"For the second time in as many years, Arlington taxpayers are being called in to bail out Signature Theatre.

"The county government on Dec. 11 announced a proposed rescue package that – pending County Board approval Dec. 17 – will help the financially beleaguered, Shirlington-based theater troupe dig out of a financial hole.

"The restructuring package that County Manager Barbara Donnellan is supporting “will put Signature on a sound financial footing and help ensure that it will continue to draw thousands of people to Arlington every year,” Donnellan said in a statement."

McCaffrey then identifies the major components of the deal:

  • "The county government will lend Signature $5 million at a rock-bottom interest rate of 1 percent, repaid over 19 years.
  • "The county government will forgive $411,000 in missed lease and utility payments for the theater’s space, located atop the Shirlington branch library.
  • "Lease payments for its space will be in abeyance until the loan is paid off.
  • "United Bank will forgive $2.7 million of an outstanding loan to Signature; the remaining debt to the bank apparently will be paid off using the county funds."

McCaffrey points out this is "the second time the county government stepped in to address Signature’s financial problems."

He also notes, "Signature attracts more than 80,000 patrons a year to its productions; the county government’s press release put that number at more than 100,000." So why isn't Signature "passing the hat" and letting it's patrons pick-up the tab for it's "rock-bottom interest rate" loan? If productions are truly "world class" as claimed, patrons should be more than willing to chip in $50 each. But why should the arts crowd reach into their own pockets when those of Arlington County taxpayers are so much deeper?

The article includes quotations by your humble scribe. Read McCaffrey's complete report. The online Arlington news portal ARLnow.com reported on this yesterday.

The county spinmeisters' press release is here. The Arlington County Board will consider three aspects of the Signature Theatre deal on Wednesday evening, December 17, 2014 no earlier than 6:45 P.M., including the license agreement, the amended and restated lease, and the loan agreement. (Agenda items 34A, B, and C.). Board reports were posted this afternoon.

If you are an Arlington County taxpayer reading this Growls, and you are concerned the county's deal with Signature Theatre is merely a local example of crony capitalism, providing welfare for the rich, are urged to write or call the Arlington County Board. Just click-on the link below:

  • Call the Board office at (703) 228-3130.
If they ask, tell them ACTA sent you!

December 11, 2014

Federal Tax Collections Set Record, Deficit Still $179 Billion

CNS News' Terry Jeffrey reported yesterday that federal tax collections in the first two months of FY 2015, i.e., October and November 2014, totaled a record $404.2 billion, but that the deficit remains at $179 billion, according to Treasury's Monthly Statement of Receipts and Outlays through November 30, 2014.

Jeffrey provided the following context for his reporting:

"In constant 2014 dollars, this is the first time federal revenues have topped $400 billion in the first two months of the fiscal year.

"Even with these record revenues, the Treasury ran a deficit of $178.531 billion deficit in October and November as it spent $582.686 billion.

< . . . >

"Given that there are 115,831,000 households in the United States, according to the Census Bureau, the Treasury spent $5,030 per household in the first two months of fiscal 2015. (emphasis added)

"The $178,531,000,000 deficit the Treasury ran in those two months equaled $1,541 per household. (emphasis added)

"The biggest source for the record federal revenue during the two-month period was the individual income tax. It brought in $192,619,000,000 in October and November. The second biggest source was “Social Insurance and Retirement Receipts,” the taxes Americans pay for Social Security and Medicare. These brought in $146,263,000,000.

"Corporate income taxes brought in $12,810,000,000 over the two months."

If you can't eliminate the deficit when record federal tax revenues are being collected, and begin making a dent in the national debt of $18 trillion, it makes you wonder if those politicians have ever considered that federal spending is out of control? Just wondering!

December 10, 2014

Generating Jobs or Shifting Workers?

Kenric Ward, chief of Watchdog.org's Virginia Bureau, in a story posted today, takes a look at some of the economic development deals that have been closed under the administration of Virginia Gov. McAuliffe. According to Ward:

"Democratic Gov. Terry McAuliffe boasts that his administration has closed a record 228 economic-development deals since he took office last January.

"But instead of generating new jobs, an agreement the governor announced last week will merely shift workers between two Virginia counties while pitting one state-subsidized company against another.

"Commercial Metals Co. – a recycling, manufacturing, fabricating and trading enterprise – will receive public funding to move into King George County’s industrial park.

"Nine years ago, then-Gov. Mark Warner, a fellow Democrat, made an almost identical deal to bring Gerdau Ameristeel to the same complex. Now, backed by nearly $1 million in taxpayer subsidies, the global corporations will compete with each other.

"With the CMC agreement, the state will provide $450,000 in rail-access funds. The company can receive up to $26,000 in job retraining funds, too.

"McAuliffe said the state support “meets (CMC’s) current growth needs and provides capacity for future expansion.” Similar pronouncements — and cash — have been issued by Republican governors, as well.

"Yet any CMC expansion may come at the expense of Gerdau, which previously received state funding, including rail-access improvements, to move to King George in 2005."

There's more, which you can read here.

If you're wondering about the economic development deals being referenced by Ward above, see this press release that Governor McAuliffe's office issued today announcing 200 new jobs for Henry County based upon the investment of $36 million by Monogram Food Solutions to expand processing operation. Included in the press release was the following paragraph:

"The Virginia Economic Development Partnership worked with the Martinsville-Henry County Economic Development Corporation to secure the project for Virginia. Governor McAuliffe approved a $400,000 grant from the Governor’s Opportunity Fund to assist Henry County with the project. The Virginia Tobacco Indemnification and Community Revitalization Commission approved $835,000 in Tobacco Region Opportunity Funds. The company is eligible to receive state benefits from the Virginia Enterprise Zone Program, administered by the Virginia Department of Housing and Community Development. The company will also be eligible to receive a Major Business Facility Job Tax Credit and sales and use tax exemptions on manufacturing equipment. Funding and services to support the company’s employee training activities will be provided through the Virginia Jobs Investment Program." (emphasis added)

Readers of Growls who are concerned that Virginia taxpayers are not receiving a proper return are urged to contact Governor Terry McAuliffe and Senators and Delegates in the General Assembly who represent Arlington County in the General Assembly.

  • Contact information for members of the General Assembly can be found here (use one of the "quick links").

And tell them ACTA sent you.

UPDATE (12/14/14): Watchdog.org's Pennsylvania Bureau reported on Thursday that an audit by a Pennsylvania state agency showed Pennsylvania gummint "handed out $93 million to businesses that missed job projections."

December 09, 2014

Voters and the So-Called CROmnibus Budget Deal

Taxpayers for Common Sense has a brief summary posted today about this so-called budget deal:

"The eagerly anticipated CROmnibus, that will provide funding for the federal government for fiscal year 2015, has finally been released.

"It’s worth noting how we got here. The $1.014 trillion funding level was established in December of 2013 by the Bipartisan Budget Act. So, despite a head start, by the end of the fiscal year 2014 (September 30, 2014) the House had passed just seven of the dozen annual spending bills. The Senate had passed zero. Neither chamber even wrote a Labor/HHS spending bill. So a continuing resolution was adopted to fund the government until December 11, 2014. The plan was to enact an omnibus in the interim that contained all one dozen bills. After the Executive Order on immigration, the decision was made to include eleven bills and provide shorter term funding for the Department of Homeland Security (through March).

"Now, very shortly before the current continuing resolution expires, the FY15 CROmnibus was posted on the House Rules Committee web site. Taxpayers for Common Sense will be scouring the bill and posting our findings here. Come back often to get updates and stay informed."

Yesterday, Hot Air's Jazz Shaw provided some background on the pending budget deal for FY 2015.  Also, yesterday, US News & World Report has this lede:

"A perfect storm of historic dysfunction combined with a lame-duck Congress, a looming power change in the Senate, a budget deadline, the holidays and the countdown to the 2016 elections has not prodded lawmakers to make compromises or to do their basic budgetary work. It has, however, led to a brand-new Washington term. Enter the “cromnibus.”

"That’s the name being assigned to a tortured GOP strategy to stick it to President Barack Obama and make a bold statement on immigration and border security – all while avoiding shutting down the federal government right before the holidays, a tactic that didn’t work out so well for the GOP when it happened last year."

Which brings us to an editorial posted this evening by Investor's Business Daily (IBD), which begins:

"As Congress races to pass a budget and avoid a government shutdown, Republican leaders need to slow down, take a deep breath and ask themselves if they really want to betray their historic victory at the polls.

Signs are already popping up that the budget deal being worked on behind the scenes will be a big disappointment to voters who thought they were voting for big change in Washington.

"Newly elected conservative members, part of the historic GOP wave in 2014, fear Speaker John Boehner is working with other GOP leaders and Democrats on a $1 trillion-plus omnibus budget that end-runs conservatives, with few members having even read it."

Read the entire IBD editorial here.

The Washington Examiner's Susan Ferrechio just reported the status of the legislation, noting:

"The package, introduced by the House Appropriations Committee after hours of closed-door negotiations, is made up of two bills. One measure would fund most of the government through September 2015, while a second bill would pay for the Department of Homeland Security until Feb. 27.

"The hybrid plan aims to mollify GOP conservatives who want Congress to defund President Obama’s recent deportation initiative when Republicans assume control of both chambers in 2015.

"Conservatives pushed the GOP leadership in both the House and Senate to embrace a spending proposal that would block Obama’s Nov. 20 executive action to curb deportations and permit millions now living here illegally to obtain work permits and become eligible for some federal benefits."

In her conclusion, Ms. Ferrechio notes, "The bill includes some policy provisions, although they are not likely to generate enough Democratic opposition to scuttle the bill." Will voters get what they wanted from the bill? Stay tuned!

Readers of Growls are urged to  contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you.

Update (12/10/14): The Washington Post's Ed O'Keefe filed this report late Tuesday evening noting that a "deal reached on $1.01 trillion spending bill."

December 08, 2014

A Thought on the Nanny State vs. Economic Growth

"Big government, which has become gargantuan in response to progressives' promptings, serves the strong. It is responsive to factions sufficiently sophisticated and moneyed to understand and manipulate its complexity. Hence Democrats, the principal creators of this complexity, receive more than 70% of lawyers' political contributions.

"Yet progressives, refusing to see this defect — big government captured by big interests — as systemic, want to make government an ever-more-muscular engine of regulation and redistribution."

~ George F. Will

Source: His latest column posted at Investor's Business Daily.

December 07, 2014

Has Transparency of State Spending Helped Slow Its Growth?

Virginia’s Joint Legislative Audit and Review Commission (JLARC) released a draft of its annual report (2014 Update) on state Spending (Number 462; November 20, 2014; draft version). Virginia's budget for FY 2014 totaled $43.3 billion, and included 155 agencies and 204 programs.

The report is required by the Code of Virginia, and reviews the “growth in state spending over the prior five biennia.” It identifies “the largest and fastest growing functions and programs in the budget, and analyze long-term trends and causes of spending in these programs (Appendix A),” and “is the 14th in the series” and “covers the 10 years from FY 2005 through FY 2014.”

Here’s the verbatim summary of what JLARC found, as reported in the commission’s draft report:

  • Over the past decade, Virginia’s operating budget increased by $14.1 billion (48%)—a 28% increase in general funds and a 66% increase in non-general funds. When controlling for growth in population and inflation, the total budget grew by 11%, the non-general fund budget increased by 24%, and the general fund budget decreased by 4%, over the 10-year period. (emphasis added)
  • A variety of economic factors and policies contributed to this growth. With population growth of 9% from 2005 to 2013 (2014 data is not available), Virginia had approximately 683,300 more residents. The personal income of Vir- ginians increased by 34% over the period while inflation increased by 23%.
  • When general funds declined during the past decade, the total budget continued to increase due to the growth in non- general funds. However, non-general fund increases have slowed in recent years as a result of slower growth in higher education operating appropriations (largely tuition and fees) and declining federal stimulus funds.
  • The 10 largest state agencies (out of 155) accounted for 68% of the total state budget in FY 2014 and 70% of all budget growth between FY 2005 and FY 2014.
  • Growth in general fund appropriations is concentrated in a few large state agencies. Several agencies experienced substantial growth in general and non-general fund appropriations over the past 10 years.
  • The general fund appropriations for 37 agencies either grew more slowly than inflation or declined.
  • Budget growth was concentrated in a few large programs: eight (of 204) in health care, education, and transportation accounted for 80% of total budget growth.

The report is filled with numerous charts and appendices, including several that are online here.

We growled about this topic on December 20, 2012 after JLARC issued their FY 2012 update.

The report emphasizes that "Virginia’s budget growth has slowed in the past decade," as described in the commission's draft report:

"Virginia’s budget has been growing for many years. As noted, in JLARC’s first report on state spending in 2002, Virginia’s total operating appropriations grew by an aver- age of 7.9% annually from FY 1981 to FY 2000. Even in years of national recession and decline in the state general fund, total state budget appropriations continued to increase due to growth in non-general funds.

"This trend continued over the past decade. Total annual budget growth from FY 2005 to FY 2014 averaged 4.5% despite reduced general fund appropriations be- tween FY 2008 and FY 2010. Growth in the total budget continued during these pe- riods due to growth in non-general funds. The nearly 10% growth in total appropria- tions in FY 2006 and FY 2007 resulted not only from a healthy economy but also from state tax policy changes adopted in 2004, which contributed to several years of above-average budget growth.

"State general funds have experienced more variability during the 10-year period un- der review. The long-term upward trend in state general fund appropriations, which was continuing in FY 2005, ceased after FY 2007. From FY 2008 through FY 2010 general fund appropriations declined by $2.2 billion, or 13%, an average decline of more than 4% per year. The general fund returned to positive growth from FY 2011 to FY 2014, though growth slowed somewhat in FY 2014.

"Non-general fund appropriations continued to grow over the past decade as non- general funds sources increased for various reasons. Federal funds increased, as did revenue from tuition payments at colleges and universities and child support en- forcement payments. Some of these increases were expressly to offset declining gen- eral funds. For example, the federal government provided an infusion of funds to states in FY 2010 to offset declines in state funding for education, health care, and other activities. FY 2014 represents the smallest year of growth in non-general funds over the past decade, mainly due to slower growth in higher education operating ap- propriations (largely tuition and fees) and reduced unemployment insurance."

Although we saw no mention in the report about the role that transparency played in slowing the growth of government spending, we believe that when citizens are armed with good information about what their government is doing, then their representatives are more likely to do the right thing.

Readers of Growls are urged to express their budget concerns to their members of the Virginia General Assembly. Use the "quick links" at the "Members and Session" webpage here. We'll update this Growls if there are any significant changes when the final report is issued.

December 06, 2014

A Thought on Government Power

"The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws."

~ Ayn Rand

Source: BrainyQuote.com

December 05, 2014

Arlington County and Their Poverty Pleadings

In their editorial this week, the Arlington Sun Gazette says "when you hear the pleas of poverty (from county and school officials), and demands that property owners pony up another record amount in taxes next year, maybe it’s time to demand a reality check of elected officials."

Here's how the editorial arrives at that conclusion:

"And so it begins for yet another year.

"School Board Faces $20 Million Budget Gap” reads the headline of a news article in another publication, which quoted county school officials saying that without something being done, they don’t have enough funds to provide the education each and every one of the county’s precious students deserves.

"It’s the start of the annual five-month fearmongering campaign by school and county officials. This time, however, we wonder if it’s going to work.

"Rather than attack school or county officials for their grandiose spending – voters sent that message on Nov. 4 – we simply wish to remind county residents that their local government has accumulated a stash of hundreds of millions of dollars that sits around, earning about the same level of interest we all get in a money-market account (read: not much). Meanwhile, the same government tells residents each year that it faces a budget shortfall and has to make up the difference with higher taxes. (emphasis in the original)

"There certainly is a reason for a local government to have rainy-day funds available. And it is true that some of these funds, which at certain times of the year can top $600 million, are designated for spending down the road.

"But by our math, which has never been effectively challenged by government officials, there is at least $200 million sitting around that serves no function. It isn’t going to help solve school overcrowding, pave roads or buttress the social-safety net. It’s just there because many top county staff, and apparently the County Board members who often seem to work for them rather than the other way around, think it’s prudent to have so much cash tucked away.

"We don’t agree with that view, and have found that when most Arlington residents hear the full story, they don’t, either."

This morning, the editor posted some additional comments in his Editor's Notebook blog, writing:

"I’m not going to name names, but let me just say that someone very high up in Arlington elected officialdom gave the Sun Gazette a “right on!” for this week’s editorial telling the county government to knock off pleading poverty – since that very same government has hundreds of millions of dollars stashed in various accounts, doing nothing but gathering dust and earning a pittance in interest.

"Our proffered solution, as noted in the editorial: Either spend all that moolah on something necessary, or give it back to the taxpayers. (Cue the song “To Dream the Impossible Dream.”)

"Apparently our editorial did not convince people at the county-government headquarters/bunker, as yesterday, they put out a press release asking the public to come to a budget work session with School Board and County Board members."

He then adds:

"Here was the kicker, from the release: “The county manager and the superintendent will need to make some difficult decisions.”

"To reiterate our position, and please read every word with care: No, no they won’t need to make “difficult decisions.” There is more than enough cash sloshing through the corridors of Arlington government. There is no “budget crisis”; it does not exist. It’s just that government officials, for whatever bizarre reason, do not want to draw down their accumulated pile of cash.

"What makes this super bizarre is that there’s so much cash, the county government probably could have funded the bulk their streetcar project with it, or used petty cash to move forward on the aquatics center. So it’s not that they’ve been cobbling together all this green for some nefarious purpose, aiming to circumvent the will of the public; instead, it simply appears we’re talking about classic hoarding behavior."

In case you're still wondering about the size of Arlington County's cash or budget reserve's, from a Washington Post story,written by Antonio Olivo, about Fairfax County's $173 million budget gap, we learn:

"Fairfax budget reserves amount to about 12.5 percent of the county’s general fund balance of $3.6 billion, lower than Montgomery County’s 17.1 percent, Loudoun County’s 19.3 percent and Arlington County’s 18.5 percent, according to a presentation by Fairfax officials late last month." (emphasis added)

The issue of budget/cash reserves became an issue more than a year ago. The "back and forth" include a September 5, 2013 op-ed by Deputy County Manager Mark Schwartz, posted at the ARLnow.com news site, and claimed that "Arlington's Cash Cushion is Financially Prudent."

We growled about these budget/cash reserves on May 29, 2014, and again offer the recommendation we made at that time:

"In last year's Growls, we said that what was needed was a written statement of a fund or cash balance policy, as defined by the Government Finance Officers Association. Unless there is a clear and written policy, there will continue to be continued haggling by both sides arguing the other side is making "apples-to-oranges comparisons."

Readers of Growls who are concerned about the budget/cash reserves being maintained by Arlington County and the Arlington Schools are urged to write or call the Arlington County Board. Just click-on the link below:

  • Call the Board office at (703) 228-3130

And if they ask, tell them ACTA sent you!

December 04, 2014

Do Those "Spread the Wealth" Policies Make Things Worse?

Citing two studies from the news site 24/7 Wall Street and one from George Mason University's Mercatus Center, an editorial posted today at Investor's Business Daily (IBD) says:

"The most liberal states in the country are the worst run and have the widest gaps between rich and poor. Could it be that spread-the-wealth policies make things worse?

"The list of worst-run states — compiled by the news site 24/7 Wall St. using things like pension funding, credit ratings, unemployment, poverty, crime and high school graduation rates — shows that three of the bottom five are liberal. Illinois ranks dead last, followed by New Mexico, with Rhode Island coming in at No. 5.

"At the other end of the spectrum, only one of the top 5 best-run states — Minnesota — is liberal. North Dakota comes in first, followed by Wyoming, Nebraska and Iowa.

"Liberal states also show up, amazingly enough, as having the greatest levels of income inequality. That's according to another 24/7 Wall St. list, which based its ranking on state-level income inequality data from the Census Bureau."
The editorial also address the issue of liberal economic policies, saying:

"The 24/7 Wall St. article quotes an analyst with the liberal Economic Policy Institute as saying that "the root of income inequality really is the stagnation in pay and wages for the vast majority of Americans."

"That's also true. But it misses the point.

"The liberal policies meant to redistribute income tend to cause that stagnation by choking off private-sector growth, over regulating businesses, and encouraging people to flee the state. That, in turn keeps wages down, hurting middle- and lower-class families far more than the rich.

"That's happening at the national level, which, under President Obama's policies, has seen stagnant wages and rising inequality. Now if only our president would learn this valuable lesson, we could see greater prosperity up and down the income ladder."

The following chart comes from the IBD editorial:


Regular readers of Growls may well remember remember those states from previous posts. Something to remind Virginia's governors and the Virginia General Assembly from time to time, not to mention our elected federal officials.

December 03, 2014

Hey Arlington County Board, Start Over with PL4PG

Last night, in a near-unanimous vote,  the Arlington County Civic Federation (ACCF) "voted to recommend the county government go back to square one on its Public Land for Public Good (PL4PG) initiative, this time incorporating a community process from the outset," according to a report by Scott McCaffrey today in the online Arlington Sun Gazette.

Here's more, though by no means all, of the Sun Gazette's Scott McCaffrey's report:

"Civic Federation president Michael McMenamin said the 51-2 vote represented a triumph of “trying to find some consensus and common ground” among competing factions of his organization and the broader public.

“This has been a difficult process, to say the least,” said McMenanim, who spent much of the past two months cajoling various Civic Federation committees to come together to “speak with one voice” on the issue.

"The vote appears to be another nail in the coffin for the county government’s Public Land for Public Good effort. A week before, the Long Range Planning Committee of the Planning Commission also recommended the process be halted to provide for more community input.

"A year ago, in response to pressure from affordable-housing advocates, County Board members directed County Manager Barbara Donnellan to compile a list of sites that could be used for new facilities ranging from affordable housing to schools.

"Donnellan’s draft list set off a firestorm of protest, largely from those who feared open space would be sacrificed for other uses – something housing activists denied would happen.
The effort also drew complaints that it was circumventing “the Arlington Way” of community dialogue and discussion early in  any planning process.

"The Civic Federation resolution “recommends basically a planning process that would look at all potential needs and uses, reviewing everything,” said Jackie Snelling, who chairs the organization’s public-service committee. It proposes, she said, “a process for planning and coming up with a plan.”

"Such a lopsided vote would have seemed unlikely just a month ago, when multiple Civic Federation committees weighed in with often contradictory recommendations. Wielding the powers of office, McMenamin said the matter wouldn’t be brought back up until all committees agreed on common language – which they did."

The remainder of McCaffrey's report is here.

Arlington County has an extensive array of resources concerning its so-called Public Land for Public Good (PL4PG) effort here. The webpage contains numerous links, but especially noteworthy are the County Board's original charge, the Manager's 11-page report, the lists of sites, and the Manager's e-mail to civic associations.

Civic Federation committees provided especially valuable work that enabled the Civic Federation to push back against the Arlington County Board's efforts to steamroll PL4PG through the bureaucratic labyrinth. Especially noteworthy was the work of Suzanne Sundburg and the Revenues & Expenditures (R&E) Committee (full disclosure: I am a member of the R&E Committee).

You can read her 8-page report here. Of special interest is the report's acknowledgement the County's PL4PG effort "was in direct response to Virginians Organized for Interfaith Community Engagement (VOICE) and affordable housing activists' collection of 10,000 petition signatures asking for more affordable housing to be constructed on Arlington's public lands." (emphasis added)

Additional committee reports concerning PL4PG include the report of the Parks Committee here, a joint report by Public Services and Planning and Zoning Committees here, and Housing Committee here and here. In addition, the slides from County Board member Mary Hynes' presentation at the November Civic Federation meeting is here.

Readers of Growls who are concerned about that special interests are unduly influencing the Arlington County Board are urged to write or call the Arlington County Board. Just click-on the link below:

  • Call the Board office at (703) 228-3130.

And if they ask, tell them ACTA sent you!

December 02, 2014

Floods, Failures, Federalism and FEMA

An editorial in today's Washington Times asserts that local and private disaster relief would provide faster and more effective disaster relief than does the Federal Emergency Management (FEMA). The editorial argues:

"A new report by the Cato Institute argues persuasively that the New Orleanians who suffered the wind and rain would have been better off without FEMA. The agency’s failure cost taxpayers billions of dollars, suffocating state and local governments and private aid organizations, which are far better suited to help disaster victims, and the failure put everyone at unnecessary risk. It’s a familiar observation of reporters covering the aftermath of a storm that “the bureaucrats arrive late with press releases, the Salvation Army first with hot coffee, sandwiches and blankets.”

"FEMA’s defenders insist that without a central agency to take control in emergency situations, local authorities would be in over their heads. They say that without a clear chain of federal command relief would be chaotic and uncoordinated.

"But anybody who’s been paying attention knows this is not true. Historically, local communities have handled emergencies, often with the guidance of state leaders. Different sections of the country face different natural disasters. Who better to prepare for and respond to these catastrophes than people who actually live in and know the region?"

The report is the work of Chris Edwards, Cato Institute's director of tax policy studies and editor of www.DownsizingGovernment.org. Below is the executive summary from the study (Policy Analysis No. 764, dated November 18, 2014), and can be downloaded to e-publication and mobile devices:

"The Federal Emergency Management Agency (FEMA) is the lead federal agency for disaster preparedness, response, and relief. FEMA’s budget fluctuates from year to year, but spending has trended sharply upwards in recent decades. The agency spent $22 billion in fiscal 2013 and $10 billion in fiscal 2014. The main activity of FEMA is distributing aid to individuals and state and local governments after natural disasters, such as hurricanes, floods, and earthquakes. In addition, the agency provides ongoing grants to the states for disaster preparedness, and it operates the National Flood Insurance Program (NFIP).

"FEMA’s response to some major disasters has been slow, disorganized, and profligate. The agency’s actions have sometimes been harmful, such as when it has blocked the relief efforts of other organizations. FEMA’s dismal response to Hurricane Katrina in 2005 dramatized the agency’s bureaucratic dysfunction. FEMA’s grants for disaster preparedness are known for wastefulness. As for the NFIP, its insurance subsidies are spurring development in flood-prone areas, which in turn is increasing the damage caused by floods. The NFIP also encourages an expansion of federal regulatory control over local land-use planning.

"Federalism is supposed to undergird America’s system of handling disasters, particularly natural disasters. State, local, and private organizations should play the dominant role. Looking at American history, many disasters have generated large outpourings of aid by individuals, businesses, and charitable groups.

"Today, however, growing federal intervention is undermining the role of private institutions and the states in handling disasters. Policymakers should reverse course and begin cutting FEMA. Ultimately, the agency should be closed down by ending aid programs for disaster preparedness and relief and privatizing flood insurance."

Take a few minutes to review the entire 32-page report. It is well-sourced with over 250 footnotes.

Readers of Growls who think that state and local governments and private disaster relief agencies are better equipped to provide swifter and more effective disaster relief are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you.

December 01, 2014

Last Friday was Truly a Black Friday

Black Friday, "a day of stock market catastrophe."  According to Investopedia, "Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold speculators." More recently, Black Friday refers to "the day after Thanksgiving in the United States" when "retailers generally see an upward spike in sales and consider this to be the start of the holiday shopping season. It's common for retailers to offer special promotions and to open early to draw in customers."

Last Friday was not only the day after Thanksgiving, it also marks a day of future financial catastrophe. Zero Hedge's Tyler Durden provides the details today (HT Mark Levin Show):

". . . total outstanding US public debt just hit a new historic level which probably would be better associated with a red color: as of the last work day of November, total US public debt just surpassed $18 trillion for the first time, or $18,005,549,328,561.45 to be precise, of which debt held by the public rose to $12,922,681,725,432.94, an increase of $32 billion in one day."

"It also means that total US debt to nominal GDP as of Sept 30, which was $17.555 trillion, is now 103%. Keep in mind this GDP number was artificially increased by about half a trillion dollars a year ago thanks to the "benefit" of R&D and intangibles. Without said definitional change, debt/GDP would now be about 106%.

"It also means that total US debt has increased by 70% under Obama, from $10.625 trillion on January 21, 2009 to $18.005 trillion most recently." (emphasis in the original)

If you have a few minutes, take a look at the national debt clock at USDebtClock.org, which provides a wealth of fiscal data. For example, with the national debt at almost $18.002 trillion, the debt per citizen is $56,367, and $153,729 per taxpayer.

We've growled about the national debt on numerous occasions, e.g., see here, but especially the September 1, 2012 Growls where we likened the growing national debt to a real "war on children."

Have an opinion about reducing the debt? The Committee for a Responsible Federal Budget has "an online exercise in hard choices," which gives you a chance to reduce the national debate. Click here.

Better yet, readers of Growls who consider the national debt unprecedented and unsustainable are urged to  contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you.