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January 31, 2015

Virginia General Assembly Gives Thumbs Down to Plastic Bags

One of the priorities in the Arlington County Board's 2015 legislative package was to ask the Virginia General Assembly to allow local governments to impose a tax (although the final Board package called it a fee)  on plastic or paper bags. (Item 33, County Board agenda, December 13, 2014). Here's the specific terminology from the supplemental report:

"Encourage the use of reusable shopping bags by allowing a locality to impose a small fee for the use of paper and plastic bags, with exceptions for specific items such as certain foods, dry cleaning, alcoholic beverages, newspapers and prescription drugs. Direct the funds raised to a specific purpose such as the state Water Quality Improvement Fund for public water improvement projects."

This morning we learn from an online article in the Arlington Sun Gazette that the bill, submitted by Sen. Chap Petersen (D-Fairfax), died in the state Senate.

"The desire of localities across Northern Virginia to tax single-use plastic bags has died its annual death in Richmond.

"A measure by state Sen. Chap Petersen (D-Fairfax) to impose a 5-cent-per-bag tax on customers in retail outlets was “passed by indefinitely” – sent to a kind of legislative purgatory – on a 14-1 vote in the Senate Committee on Finance.

"Funds raised from the proposed legislation would have been earmarked for efforts to protect the Chesapeake Bay watershed.

"Had Petersen’s measure made it out of the Senate, it would have faced an uphill climb in the House of Delegates. All previous efforts to either impose a bag tax, or allow localities to do so, died in past sessions of the General Assembly.

"Arlington County Board members for several years included the measure in their list of legislative priorities, but other years left it out, under the theory that Arlington’s support for a measure does not help its prospects in the General Assembly."

The details of Sen. Petersen's SB 886 can be found here. At least two other "plastic bag" bill are still afoat in the Senate. Instead of taxing charging a fee whenever a paper or plastic bag was used, the two bills would allow local governments to prohibit their use. This includes Sen. Lynwood Lewis's (D-Accomac) SB 880 (available here) and Senator Jeffrey McWaters' (R-Virginia Beach) SB 1103 (available here), which actually looks to be getting a hearing.

As the Sun Gazette notes, this is not the first time that Arlington County's progressives (aka liberals) have pushed a grocery bag tax. According to Kailee Tkacz wrote at the Tax Foundation's Tax Policy blog on March 21, 2011:

"Though the Virginia General Assembly was unsuccessful in passing grocery bag taxes for environmental reasons, Arlington County officials are seeking federal support instead.

"Congressman Jim Moran (D-VA), a proponent for the failed federal Plastic Bag Reduction Act in 2010, plans to reintroduce like legislation on Earth Day again this year.

"Arlington County Board Member Barbara Favola, who supports the grocery bag tax, cited the success of the District's bag tax by saying that there's been a drop in the number of bags used, and tax revenue is dedicated to cleaning up the Anacostia River.  Yet, just four months after enactment of the bag tax in DC, Mayor Fenty proposed raiding the $150,000 fund through an inter-governmental transfer in order to pay for general city services which were not necessarily related to any clean-up of the river.

"Another problem with enacting bag taxes for environmental reasons is that much of the proposed legislation specifically singles out grocery bags, yet grocery bags are not the only bags that lead to pollution. In addition, other states have banned plastic bag usage all together; though extreme, such a regulatory approach removes any doubt in the minds of the taxpayers whether the motive is environmental improvement or revenue generation.

"When speaking on the failed grocery bag tax legislation, Favola said "We didn't really expect it to pass. We're not unrealistic...we know it takes several years of education and information" to change people's minds."

Shortly after the District of Columbia passed their plastic bag tax, the Tax Foundation's Justin Higginbottom wrote a 5-page paper (5/12/10; Fiscal Fact 224), and concluded the District's bag tax was "disappointing in debut." His conclusion:

"Government-imposed charges for bags are best described as pigouvian taxes, though it is not clear how much environmental benefit the citizens will receive if fewer bags are used. The tendency, as in Seattle, is for public officials to greatly exaggerate environmental benefits. And with the likelihood of inter-governmental transfers, bag taxes may just be another way for a state or city to grab general revenue."

For a statewide look at plastic bag legislation, the National Conference of State Legislatures features this summary, including the fact that "California became the first state legislature to enact legislation imposing a statewide ban on single-use plastic bags at large retail stores," in August 2014, which becomes effective on July 1, 2015. Rest assured Virginians, progressives won't give up on banning plastic bags. After all, they're a petroleum product.

Even the liberal Huffington Post glad hands the effort to spread plastic bag lbans to more cities and counties.

But are these so-called environmental efforts effective, or are they just another means by which liberals reach into conservative pockets? In a Tax Policy blog post just one-year ago, Joseph Henchman cites a Washington Post story that found that tax collections are steady, but the claimed usage of plastic bags is down 60%.

Or as Ramon Murphy concludes in a New York Observer story on November 24, 2014:

"So, when the dust settles the evidence indicates that people may actually rather fight to keep their plastic bags rather then switch-making the 10 cent fee a harshly regressive tax on low income New Yorkers. Intro 209, then, fails on its own assumptions, but succeeds remarkably at burdening already over burdened stores and cash strapped consumers.

If plastic bags pose an environmental challenge the City Council needs to find a better way to address the problem. Making our retailers take on the responsibility for the city’s failed environmental policies is simply unfair and counterproductive.

For some opposing views on the plastic bags tax or ban, see these Daily Signal blog entries at the Heritage Foundation -- here for Seattle, here for Evanston, and here for California. See also this Reason Foundation policy study on the environmental and economic effects of grocery bag bans and taxes (HT Heritage Foundation's InsiderOnline) or this National Center for this Policy Analysis policy report (No. 353, December 2013; HT Heritage Foundation's InsiderOnline). Search for other plastic bag reports at InsiderOnline.

Guess it's just the Progressives latest unmet need, eco-fad variety.

UPDATE (2/2/15): Thanks to one of the most inestimable Arlingtonians for pointing out that I tried changing the name of the Arlington Sun Gazette to the Arlington Sun Times. I wish I knew how the synapses fired-off to get that result.

January 30, 2015

Public Land for Publc Good (PL4PG) Gets Official Ax

On December 4, 2014, we growled after a near-unanimous vote by the Arlington County Civic Federation, and urged the Arlington County Board to start over with the so-called Public Land for Public Good (PL4PG), saying the County Board should incorporate a community process from the outset. In growling, we said:

"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 in the original)"

A month later, on January 8, 2015, we growled again after "Arlington County Manager Barbara Donellan told delegates of the Arlington County Civic Federation that she "aims to put ‘Public Land’ mess in rear-view mirror," or at least that was the headline of Scott McCaffrey's online story today in the Arlington Sun Gazette."

That brings us to this morning. The headline in the Arlington Sun Gazette reports the "Arlington board officially axes Public Land for Public Good effort." Here's the core of the Sun Gazette report:

"Board members opted to “set aside” – as a statement tactfully put it – the draft Public Land Site-Evaluation Guidelines, which were adopted in 2014 but immediately provoked a community backlash.

"Supporters of open space saw the document as an invitation to start building affordable housing and other facilities on parkland, and community groups ranging from the Planning Commission to the Arlington County Civic Federation voiced concern about a top-down heavy-handedness that went against the community-based process best known as the Arlington Way.

"On Jan. 1, County Board Chairman Mary Hynes unveiled her plan for a community-facilities study, designed to take the place of the Public Land for Public Good process, and on Jan. 23 the County Board and School Board agreed on the panel’s framework and composition.

"Hynes said the process would result in “a full, thoughtful and very public discussion this year, aimed at building consensus around how best to address our facilities needs.”

The county's press release, issued on Wednesday,that put the fork into the PL4PG initiative is here, and includes three bullets:

  • Community Facilities Study public planning effort to replace draft guidelines
  • No stand-alone affordable housing on officially designated parks
  • Lubber Run Community Center, Jennie Dean Park/Shirlington Crescent, Salt Dome planning to move forward

For information about the community facilities study, and links to its 24 committee members, see the following press release.

Kudos to the County Board for choosing to listen to the residents and taxpayers of Arlington County.

January 28, 2015

Migration and Taxation, An Update

Terry Jeffrey, CNS News' editor-in-chief, discusses new migration data released by the U.S. Census Bureau today, noting:

"New York State and the Northeast region led the nation in domestic net “outmigration” in the period from July 1, 2013 to July 1, 2014, according to newly released data from the Census Bureau. During the same period, Texas and the South led the nation in domestic net 'inmigration.'"

Jeffrey goes on to provide the following details:

"From July 1, 2013 to July 1, 2014, 30 states had a domestic net outmigration and 20 states plus the District of Columbia had a domestic net inmigration.

"New York State led in outmigration as a net of 153,921 people moved from the state to elsewhere in the country. Texas led in inmigration as a net of 154,467 moved into the state from elsehwere in the country.

"Illinois had the second highest domestic outmigration, with a net of 94,956 leaving the state for other parts of the country and Florida had the second highest domestic inmigration with 138,546 moving to the state from other parts of the country.

"The Northeast region (which includes Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont, New Jersey, New York and Pennsylvania) saw a net domestic outmigration of 286,696 from July 1, 2013 to 2104."

Virginia was one of the 30 states with a net outmigration, ranking 8th with a net 20,400 people leaving the Commonwealth.

We growled on May 18, 2014 about this same topic based upon a 5-part series of blog posts by the Tax Foundation's Lyman Stone that responded to a report claiming that taxation has only a negligible impact on migration. We provided extensive context as well as a Tax Foundation map of 10-years of migration data. We also included a link to our 2003 study of migration for Arlington County. Unfortunately, we have not yet fulfilled the promise to update the 2003 study.

January 27, 2015

Deficits May Be Declining, but the Debt is Unsustainable

Yesterday, the Congressional Budget Office (CBO) released its Budget and Economic Outlook for 2015-2015, according to a report in the New York Times entitled, "Budget Forecast Sees End to Sharp Deficit Declines." Here's the lede of the story written by Jonathan Weisman:

"The federal budget deficit will continue to inch downward through next year, but even with the economy on an upward trajectory, the government’s red ink will begin to rise in 2017 and expand with an aging population, the Congressional Budget Office said Monday.

"The new budget projections effectively signal the end of the steep decline in deficits as the economy climbed out of the recession. Lawmakers now face a familiar and politically vexing problem: What to do about increases in Medicare, Medicaid and Social Security spending that reflect the nation’s demographics, not its economic health?" (emphasis added)

What? Spending on the three largest entitlement programs aren't part of the federal budget or the nation's economic health? Eventually Weisman acknowledges the annual deficit will rise to over $1 trillion by 2025, and the remainder of his reporting is worth reading.

Today, the CBO testified before the House's Budget Committee. Breitbart News' reporting today was much more sober with a headline that read, "CBO Director Predicts Unsustainable Debt, 'Heightening the Risk of Fiscal Crisis." According to Ian Hanchett, who reported the story for Breitbart:

"CBO Director Douglas Elmdorf testified that debt will exceed 100% of GDP within 25 years and continue to rise, a “trend that could not be sustained” and would eventually heighten “the risk of a fiscal crisis” before the House Budget Committee on Tuesday.

< . . . >

"According to a copy of his prepared remarks released by the CBO, the revised economic projections “do not materially change” predictions that debt will exceed 100% of GDP in 25 years and “CBO’s current projection of debt as a percentage of GDP in 2024 is quite close to that used as the starting point for the projections in The 2014 Long-Term Budget Outlook [where the CBO also predicted that debt will be 100% of GDP in 25 years.]”

You can find the CBO's report, "The Budget and Economic Outlook: 2015 to 2025." here. The following chart is from the CBO report:

The testimony of CBO director Douglas Elmendorf before the House of Representatives's Committee on the Budget today is here. Finally, click here to see the Economic Outlook for 2015 to 2025 in 17 slides.

Weisman does note, however, that some on the left may not take seriously the unsustainability of the federal debt. He writes that "Senator Bernard Sanders, independent of Vermont, who caucuses with Democrats and is the new ranking member of the Senate Budget Committee, anticipated the change in direction (of Congress' budget committees) with a new report focused on wage stagnation and the shriveling middle class."

Readers are urged to  contact their members of Congress to tell them the federal debt is indeed unsustainable., and that you expect them to begin immediately to bring federal spending under control. 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 Don Beyer (D) --   write to him or call (202) 225-4376.

And, tell them ACTA sent you.

January 25, 2015

A Thought on the Damages Done by Socialism

"Socialism is damaging in many ways. It wrecks economies and batters the quality of life. It corrupts, dehumanizes and makes people worse.

"This isn't partisan rhetoric but a fact confirmed recently by a study that compared people from a communist regime to those from a more capitalist system.

"We find," says a group of international researchers, "that individuals with an East German family background cheat significantly more on an abstract task than those with a West German family background.

"The longer individuals were exposed to socialism, the more likely they were to cheat on our task."

~ Editorial, Investor's Business Daily, August 5, 2014

Source: Editorial, " Socialism Of Progressives Brings Out Worst In People," Investor's Business Daily.

January 24, 2015

VDoT Ignores Auditor's Recommendation to Collect $3 Million

"The Virginia Department of Transportation will not fine a contractor, despite an audit revealing that the state agency could have recovered $3 million." That's the lede of a story posted yesterday (HT Townhall.com) by Kenric Ward, Virginia Bureau Chief of Watchdog.org. Here's further details from Ward's reporting:

“We received legal counsel about past practices limit(ing) an agency’s ability to collect liquidated damages without defining a direct impact to motorists, which did not apply,” said VDOT spokeswoman Marshall Herman.

"She added that the contractor, Serco, “made very clear their strong disagreement about collecting liquidated damages.”

"The Inspector General’s audit, as reported by Watchdog this month, determined the VDOT could have levied $3 million in fines against Serco for failure to perform. The company provides roadside assistance, electronic signage and logistical support for VDOT as part of a $335 million contract."

Mr. Ward's reporting includes the following response offered by your humble scribe:

"Tim Wise, president of the Arlington County Taxpayers Association, said, “If VDOT is unable to collect the liquidated damages from Serco, it seems VDOT needs to learn how to write tighter contract specifications, or VDOT and the governor’s office need to ask the General Assembly to provide state agencies with better tools for contract administration.

“Otherwise, Virginia’s taxpayers and motorists are being taken to the woodshed.”

You can read Kenric Ward's entire story here.

Readers of Growls are urged to contact Governor Terry McAuliffe and/or Senators and Delegates of the Virginia General Assembly who represent Arlington County to express their outrage at how their tax dollars are being handled by the Virginia Department of Transportation bureaucrats.

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

And tell them ACTA sent you.

January 23, 2015

17.2% Higher USF E-Rate Fee Raised Your Phone Bill

"Porker of the Month is a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers."

On December 17, 2014, "Citizens Against Government Waste (CAGW) named Federal Communications Commission (FCC) Chairman Tom Wheeler its December Porker of the Month for taking the FCC on a high-tech holiday spending spree by increasing funding for the Universal Service Fund’s (USF) E-Rate program," according to this CAGW press release.

Here's CAGW's justification for naming FCC Chairman Wheeler its December 2014 Porker of the Month:

"On December 11, 2014, the FCC voted 3-2 to approve the chairman’s proposal to raise the spending cap on the E-Rate program by $1.5 billion annually, resulting in a 17.2 percent increase in the USF fees charged to Americans on their telephone and wireless bills.  The E-Rate program, which provides schools and libraries with discounts on telecommunications and Internet access, is one of four programs funded through the USF.  While it may have a laudable objective, the E-Rate program duplicates private sector efforts to increase broadband access for educational institutions and has become riddled with wasteful spending.  It should be reformed, not expanded. (emphasis added)

"The FCC has complete control over the amount of USF fees and can raise the rates and spending caps at any time. The fees are passed along to consumers in the form of a hidden tax on their telephone and wireless bills. In a December 11, 2014 statement trivializing the economic impact of the higher E-Rate spending cap, Chairman Wheeler said that “…what Americans contribute to the E-Rate fund means that over time, the support paid by consumers could grow by approximately 16 cents a month for a telephone line…over the course of the year that represents one cup of coffee at Dunkin Donuts or one large soda at McDonald’s – per year.”

“Chairman Wheeler’s analysis shows that he is disconnected from reality,” said CAGW President Tom Schatz.  “The approved increase in the E-Rate spending caps does not include any reforms of the program’s burdensome administrative procedures and lengthy application process, nor does it reduce wasteful spending.”

"Some of these reforms were included in CAGW’s book, Telecom Unplugged:  Ushering in a New Digital Era.  FCC Commissioners Michael O’Reilly, Ajit Pai, and Jessica Rosenworcel have all advocated for additional E-Rate program auditing to root out wasteful spending, simplifying the application process, increasing flexibility for schools to choose speeds that best meet their needs, and streamlining the sclerotic administration process.  None of these proposals would cost consumers any more money; yet none have captured the attention of the Chairman.

“Chairman Wheeler has resorted to the usual, hackneyed political rhetoric to justify more hidden taxes and more wasteful spending, using students as convenient props.  On top of his misguided idea that the FCC should subvert state laws that prohibit or restrict taxpayer-funded local municipal broadband systems, Chairman Wheeler is putting a big lump of coal in taxpayers’ Christmas stockings,” added Schatz."

In their conclusion, CAGW wrote, "For imposing higher hidden taxes on consumers; expanding a bloated, mismanaged program; and ignoring commonsense solutions for modernizing and reforming the E-Rate program, CAGW names FCC Chairman Tom Wheeler its December Porker of the Month."

CAGW is a nonpartisan, nonprofit organization "dedicated to eliminating waste, fraud, abuse, and mismanagement in government." Make Citizens Against Government Waste (CAGW) a regular source of information about government spending.

In 2004, Taxpayers for Common Sense provided some history on the USF as well as program waste. For a legal definition of the USF tax law, see here. Rosslyn Smith writes about the use and abuse, including ObamaPhones, of the USF in this 2012 American Thinker article.

Readers of Growls are urged to  contact their members of Congress to express their shock at the 17.2% increase in the Universal Service Fee. 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 Don Beyer (D) --   write to him or call (202) 225-4376.

And, tell them ACTA sent you.

UPDATE (1/24/15): Education Week provides a "spotlight on E-Rate" feature that includes an analysis of "the winners and losers in E-rate modernization."

January 22, 2015

A Thought on the Welfare State

"Daniel Patrick Moynihan, a lifelong New Deal liberal and accomplished social scientist, warned that “the issue of welfare is not what it costs those who provide it, but what it costs those who receive it.” As a growing portion of the population succumbs to the entitlement state’s ever-expanding menu of temptations, the costs, (Nicholas) Eberstadt concludes, include a transformation of the nation’s “political culture, sensibilities, and tradition,” the weakening of America’s distinctive “conceptions of self-reliance, personal responsibility, and self-advancement,” and perhaps a “rending of the national fabric.” As a result, “America today does not look exceptional at all.”

~ George Will

Source: His 1/21-22/15 Column, posted at National Review Online.

January 21, 2015

Arlington County's Tax Burden Grows Faster Than Inflation

Per capita income of Arlington County's population grew from $59,010 in 2005 to $86,300 in 2014, or 46.25%, an average of 4.625% annually (page 187, Table K, hardcopy Comprehensive Annual Financial Report (CAFR), page 180 of electronic FY 2014 CAFR). Looked at another way, per capita income in 2014 would have increased to $71,530 if it had grown only as fast as inflation, according to the U.S. Department of Labor's CPI Inflation Calculator (an annual inflation rate averaging 2.09% over those 10 years).

Even if per capita income had increased as fast as the CPI-U index (Table 24, CPI Detailed Report, September 2014), i.e., averaging 2.58% from 2005 to 2014, the $59,010 per capita income would have increased to $74,258 in 2014.

So, workers in Arlington County "did well" in comparison to inflation. But by at least two measures, Arlington County grabbed workers income at an even faster pace than workers' earnings. Let's take a look.

  • Taxes (Table D-2, General Governmental Revenues, page 178, hardcopy CAFR). Per capita taxes grew from $2,980.62 per capita in 2005 to $4,483.47 per capita in 2014, or 50.42%, or an average annual increase of 5.04%. Over the 10 years, local government grabbed between $732 and $879 more than if the Arlington County Board had limited the growth of government to the rate of inflation.
  • General Property Taxes (Table E, General Governmental Tax Revenues by Source, page 179, hardcopy CAFR). Per capita general property taxes grew from $2,180.49 per capita in 2005 to $3,452.35 per capita in 2014, or 58.33%, or an average annual increase of 5.83%. Over the 10 years, our local government grabbed between $708 and $815 more than if the Arlington County Board had limited the growth of government to the rate of inflation.

If you're wondering what the County Board is doing with those extra dollars, take a few minutes to look at Table C on page 174-175 for one possibility (hardcopy CAFR; pages 167-168 electronic CAFR). The table shows fund balances for the past 10 years. One number is of special interest, i.e., "General Fund Balance as Percent of General Fund Expenditures and Other Financing Uses, which cynics might refer to as a slush fund (but see our October 14, 2013 Growls). It rockets upwards from 9.41% in 2005 to 21.16% in 2014, growing in virtually every year. (9.41% in 2005; 12.88% in 2006; 13.49% in 2007;  12.93% in 2008; 14.98% in 2009; 14.40% in 2010; 16.62% in 2011; 19.02% in 2012; 18.44% in 2013; and 21.16% in 2014.)

Growls readers who are Arlington County taxpayers who think their local government in Arlington County should limit the per capita tax burden to no more than inflation and population increases are urged to write or call the Arlington County Board. Just click-on the link below:

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

And tell them ACTA sent you!

January 20, 2015

Auditors Give OK on Arlington Treasurer's Turnover Audit

As most Arlington County residents probably know by now, former Treasurer Frank O'Leary retired last July. As editorialized by the Arlington Sun Gazette on July 15, 2014, "An era truly came to an end July 7, as Arlington Treasurer Frank O’Leary wrapped up his lengthy tenure by submitting his resignation and heading off to retirement." He was first elected in 1983 by a narrow margin.

O'Leary's retirement brought into play §58.1-3136 of the Code of Virginia, which requires audits of treasurers upon termination of office. It reads:

"Notwithstanding any other provision of law, upon the death, resignation, removal, retirement or other termination of a treasurer, an audit of all accounts of his office pertaining to state funds shall be performed by the Auditor of Public Accounts at no cost to the county or city. An audit of all such accounts pertaining to local and other funds shall be performed by the Auditor of Public Accounts or an independent certified public accountant, at the option of the local governing body, and the cost thereof shall be paid by such governing body. Audits not performed by the Auditor of Public Accounts shall be performed according to his specifications and a copy of the audit report shall be filed with the Auditor for his approval."

Two audits were performed as a result of Mr. O'Leary's retirement, and turnover of the office to Carla de la Pava, the newly appointed Treasurer.

The first audit was performed by the Virginia Auditor of Public Accounts (VAPA), which you can find here. The bottom line of the auditor's opinion reads:

"In our opinion, based on our examination, the receipts referred to above present fairly, in all material respects, Commonwealth’s assets of Francis X. O'Leary, Treasurer of the County of Arlington, Virginia turned over to the incoming treasurer at July 3, 2014."

There was a second audit, however, i.e., the "locality portion of the Treasurer’s office," a copy of which was provided to ACTA by the Virginia Auditor of Public Accounts last Fall. The audit was performed by CliftonLarsonAllen, and is dated October 8, 2014. The language of the auditor's opinion closely follows the language in the VAPA's opinion.

Good to learn about the legal compliance with the Code o Virginia.

January 19, 2015

Continuing Comments on Arlington County's FY 2014 CAFR

We've growled once already about Arlington County's FY2014 Comprehensive Annual Financial Report (CAFR), covering the fiscal year ending June 30, 2014 and containing the audited financial statements, which the county released in December, growling about the county's 10-year record of profligacy.

Another item of interest is contained in the independent auditor's Note 2 to the FY 2014 financial statements (page 55 of the hardcopy CAFR; page 53 of the electronic CAFR), labelled "Legal Compliance." In Note 2, the auditor points out in the second paragraph the Arlington County Board may approve "supplemental appropriations" after adopting the original budget in the spring. In fact, such appropriations totaled $127.5 million in FY 2014. The independent auditor also points out, "the County Board can approve transfers of appropriations between County departments and the County Manager can approve budget transfers within a department's appropriation. The level of budgetary control in the County is at the department level."

Of special interest, however, is what the independent auditor writes in the remainder of Note 2's second paragraph. The auditor points out five departments or agencies of Arlington County government whose spending exceeded their budget authority, or "level of control." He identifies such culprits, including the reasons for the overspending:

  • County Manager’s Office -- actual greater than final budget by $31,219 -- "due to leave payouts for employees"
  • Sherriff’s Department --  actual greater than final budget by $742,323 -- "due to overtime costs"
  • Treasurer’s Office -- actual greater than final budget by $207,606 -- "due to increased mailing and printing costs and not achieving vacancy savings"
  • Fire Department -- actual greater than final budget by $611,014 -- "primarily due to overtime and callback costs"
  • County Attorney -- actual greater than final budget by $82,524 -- "due to increased legal costs and expenses related to lawsuits and other transactions the County was involved in during FY 2014."

The five over-budget amounts are small relative to the overall general fund expenditures of almost $1.1 billion. When we growled on October 14, 2013, we pointed out that the county had just "set a new record for the amount of cash in its coffers." More importantly, those over-expenditures may not be looked upon favorably by Arlington County families who are "just getting by" with their personal finances or other more prudent taxpayers.

Growls readers who are Arlington County taxpayers who think their local government should be less profligate are urged to write or call the Arlington County Board. Just click-on the link below:

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

And tell them ACTA sent you!

January 18, 2015

Another Thought on Economic Growth

"As my colleague Louis Woodhill has observed, “There is nothing that the federal government could possibly do for the middle class (or any other class, for that matter) that having 30% more income would not do much, much better.” That is where we would be today if we had just kept the bipartisan economic growth of the Reagan and Clinton years going. But  there is so much more that can be done now to spark a 21st Century economic breakout today. For all of the above reasons, this is the top policy priority of today, by far."

~ Peter Ferrara

Source: His June 29, 2014 column, "'Room To Grow' Blind To The Most Important Issue For The Middle Class -- Economic Growth," posted at Forbes.

January 17, 2015

Global Warming Ranks 22nd on List of 23 Priorities

In a poll of public's policy priorities for 2015, released on Thursday, the Pew Research Center for the People & the Press reports the people's priorities "reflect changing conditions at home and abroad." Here's how Pew introduces the poll (HT Sierra Rayne, American Thinker):

"As views of the economy improve and terrorist threats persist, the public’s policy priorities have changed: For the first time in five years, as many Americans cite defending the U.S. against terrorism (76%) as a top policy priority  as say that about strengthening the nation’s economy (75%).

"Since Barack Obama began his second term in January 2013, the economy has declined 11 points as a top priority, and improving the job situation has fallen 12 points (from 79% to 67%).

"There has been little change over the past two years in the number saying that defending against terrorism should be a top priority; in fact, this has consistently been among the public’s leading policy goals since 2002. But it has moved to the top of the priorities list as the economy and jobs have fallen.

"The Pew Research Center’s annual policy priorities survey, conducted Jan. 7-11 among 1,504 adults, also finds that the goal of strengthening the military has increased in importance. Currently, 52% say strengthening the military should be a top policy priority for the president and Congress this year, up from 41% in January 2013."

Here's a chart of the 23 priorities included in the Pew poll along with the percentage rating each as a top priority for the President and the Congress:

The Pew poll found significant partisan differences in regards to global warming, e.g., while only 15% of Republicans rated it as a top priority, 54% of Democrats consider it a top priority. Thirty-nine percent of Independents rated global warming as a top priority.

On the other hand, there were virtually no partisan differences for seven public policy priorities where the partisan difference between Republicans, Democrats, and Independents was three percentage points or less. The seven priorities were:

  • Making the Medicare system sound
  • Improving the job situation
  • Dealing with global trade issues
  • Reducing crime
  • Reducing influence of lobbyists
  • Strengthen the nation's economy
  • Make the Social Security system sound

Pew also pointed out that age affected policy priorities. Five policy priorities show virtually no differences by age, i.e., nation's economy, energy, reducing crime, race relations, and improving the job situation.

Readers of Growls are urged to  contact their members of Congress to express their priorities. 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 Don Beyer (D) --   write to him or call (202) 225-4376.

And, tell them ACTA sent you.

January 16, 2015

Average Arlington County Residential Property Up 4.9

One definition of modest "limited or moderate in amount, extent, etc., according to Dictionary.com. Synonyms include prudent and simple.

Inflation (CPI-U) from January 2014 to January 2015 was 1.58%, according to Table 24, CPI Detailed Report, January 2015.

That said, the bad news on assessments for Arlington County property owners is contained in the headline of the online story in today's Arlington Sun Gazette, "Arlington posts higher home assessments; office sector takes a hit." If you've been following Growls on a daily basis, we growled last week, repeating a warning from the Arlington County Manager that taxpayers would have to fork over between $300 and $440 in higher real estate taxes. Here's the introduction from the Sun Gazette story:

"Barring a cut in the rate, a typical Arlington homeowner will see his or her 2015 real estate real estate tax bill rise 4.9 percent to a record $5,775 this year, based on property assessments released Jan. 16.

"The county government reported that the average assessment for all types of residential real estate, from single-family homes to condominiums, increased from $552,700 in 2014 to $579,800 in 2015.

"The increase was in line with expectations, and will put pressure on County Board members to find a way to lower the real estate tax rate, currently 99.6 cents per $100 assessed valuation.

"But that won’t be easy, as it was a flat year for commercial real estate, which makes up nearly half the county’s overall tax base.

"Valuations of existing office space declined 4.5 percent, due largely to high vacancy rates across the county. That decline largely was offset by increases in assessments on apartment buildings (up 4.7 percent) and general commercial properties (up 5 percent)."

For the complete story, see here; story includes a table of real estate tax rates going back to 1970. For ARLnow.com's take, see here.

The county's press release, titled "Modest Increase in Arlington Property Values," plopped into my inbox this morning. It contained four bullets (emphasis added):

  • Overall increase of 3.4%
  • Average residential property up 4.9%, to $579,800
  • Commercial values flat
  • Assessments available online 11 p.m. tonight

We're not opposed to the increased property values, but tax increases that are more than double the rate of inflation cannot be said to be modest. Consequently, it's time for the County Board and the County Manager to find ways to limit any tax increases to the rate of inflation. Taxpayers have to tighten their belts, and local government should do the same.

The press release contains additional details regarding those commercial assessments, more on the budget outlook, and the link to look-up your real estate assessments online. Growls readers who are Arlington County property owners, and think local government should live within the limits of inflation are urged to write or call the Arlington County Board. Just click-on the link below:

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

And tell them ACTA sent you!

January 15, 2015

Is Arlington County Closer to Having an Internal Auditor?

Yesterday, we growled whether Arlington County should title the position Inspector General or Internal Auditor. The issue came to mind after seeing the results of an audit performed by the Virginia Auditor of Public Accounts.

Today comes news that "Arlington officials (are) still on hunt for an internal auditor." according to this online story today in the Arlington Sun Gazette, which begins its reporting, saying:

"Hoping that the second time will be a charm, the Arlington County government is moving closer to hiring an internal auditor.

"County officials last summer announced the filling of the position, which had been demanded by County Board members, but did not announce the name of the person they had selected. That person later backed out.

"At a recent Arlington County Civic Federation meeting, County Manager Barbara Donnellan said the government was close to filling the position. “We are out on the street” looking at candidates, she said.

"The county government’s jobs listings include the position, with the salary listed as up to $121,700. Applicants must be either certified public accountants or certified internal auditors; the posting says the county government is seeking a “seasoned” professional. The person hired will report to the deputy director of the Department of Management and Finance.

"Still at issue: Whether such a position can, or should, report directly to the County Board.

"Currently, County Board members can only hire and fire three positions in the 3,400-person government workforce – the county manager, county attorney and clerk to the board. Everyone else reports up the chain of command to the county manager."

Meanwhile, in Richmond, Delegate Patrick Hope, a member of Arlington County's so-called Richmond Delegation in the Virginia General Assembly "has drafted a bill that would authorize the Arlington County Board to hire an independent auditor, reports the ARLnow.com news site. ARLnow.com further reports:

"Such legislation, should it pass the Republican-controlled state legislature, would be a victory for County Board members Libby Garvey (D) and John Vihstadt (I), who have championed the hiring of an independent auditor as a way to bring more accountability to county government. Hope’s legislation would only authorize the hiring, it would not require the County Board to do so. It would also apply to other Virginia jurisdictions with a County Manager form of government.

"Currently, the County Board does not have the authority to hire an independent auditor, since Virginia is a Dillon Rule state and the County Manager form of government doesn’t provide any provisions for such a hire.

"County Manager Barbara Donnellan could hire an internal auditor — in fact, it appears that her staff is doing so — but Vihstadt has said that doesn’t provide the level of independence that he desires."

It is difficult to understand just how the Arlington County government, with more than a billion dollar annual budget and Triple-A bond ratings,, manages to pass its annual financial audits without a vibrant and dynamic internal audit function.

Growls readers who are Arlington County taxpayers, and interested in a strong internal audit function that is carried out with integrity, objectivity, independence, and with professional judgement, are urged to write or call the Arlington County Board. Just click-on the link below:

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

And tell them ACTA sent you!

January 14, 2015

A Thought on Government

“Government should do much less so they can concentrate on and do better with the tasks they are most needed for, such as police and military, infrastructure, safety nets, and regulation of activities with big externalities. Regrettably, I am not optimistic that much can be achieved quickly in slimming down governments, given the strong self-interests and special interests that benefit from the present situation.”

~ Gary Becker

HT Steven Hayward of the inestimable PowerLine blog, posted 5/4/14, who adds it is "one of Becker’s short judgments that has been true—and will continue to be true—for a long time." For a short history of Gary Becker, see this entry at the Concise Encyclopedia of Economics.

January 13, 2015

Any IG or Internal Auditor Must be Independent

On more than one occasion, we've growled about the need for a strong internal audit function -- whether you call the office Inspector General or Internal Auditor. See our November 7, 2014, October 10, 2014, and August 4, 2014 Growls.

That came to mind when we read a report today from Watchdog.org's Virginia Bureau. In a story entitled, "Independent commission didn’t allow independent auditing, report says," the bureau's Katie Watson writes:

"The top internal auditor for a state agency that has a say in your electric bill might have had to choose between keeping a job and telling the honest-to-goodness truth.

"The chief internal auditor of the State Corporation Commission has been reporting to the chief administrative officer, instead of directly to the agency’s three General Assembly-appointed commissioners.

"The arrangement sets up a potential conflict of interest, a new audit from the Auditor of Public Accounts says.

"The chief internal auditor, meant to operate as independently as possible, could have risked putting his job on the line to report any administrative failings to his boss, or the chief administrative officer could have left out embarrassing details.

“A lack of organizational independence could lead to management pressures affecting the objectivity of the commission’s chief internal auditor,” an audit from the state Auditor of Public Accounts, which regularly reviews state agencies, said. “As a result of the chief internal auditor only reporting to management, its assessments of management may appear to be influenced by this relationship.”

"That needs to change, the state auditor said."

The entire report is here.

For additional background on the efforts by Arlington County to crawl out of the dark ages of an internal laudit function buried in the bureaucracy, see our October 10, 2014 Growls.

Growls readers who are Arlington County taxpayers, and who are concerned about the lack of a strong internal audit function at the county level that is carried out with integrity, objectivity, independence, and with professional judgement, are urged to write or call the Arlington County Board. Just click-on the link below:

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

And tell them ACTA sent you!

January 12, 2015

Arlington School Board Conciliatory on FY 2016 Budget?

With the Arlington Public Schools' Superintendent set to release his proposed FY 2016 budget in little over a month -- on Thursday, February 19 -- the Arlington School Board took steps last Thursday to "stake out its position on funding, according to Scott McCaffrey in today's Arlington Sun Gazette:

"Voting 5-0 to adopt a new set of “principles” to guide revenue sharing between the county government and school system, School Board members acknowledged that a new, tighter budget environment means not everyone will get everything they want over the coming year.

“We’re in a new environment – the County Board needs to be cautious . . . [and] we have to meet them on that,” new School Board member Barbara Kanninen said at the Jan. 8 School Board meeting.

"Unlike previous revenue-sharing agreements, the new one – which awaits County Board approval – does not specify the percentage of county tax revenue that will be funneled to schools. That worried a number of advocates, including School Board member Abby Raphael.

“I understand the environment is different,” she said. “[But] we need to advocate for our students and our schools.”

"Raphael proposed, and School Board members adopted, a revision to the new principles providing that the county government take into account “critical needs” identified by the school system, not just enrollment growth, in determining how much funding will be allocated to schools.

"That wording change, which still needs County Board approval, could be important, since funds from the county government account for nearly 80 percent of what is now a $550 million annual school budget. Like all School Boards across the commonwealth, the Arlington board lacks independent taxing authority."

McCaffrey includes more details in his reporting, which you can read here. He includes the following, based upon the Superintendent's appearance at last week's Arlington County Civic Federation monthly meeting:

"School officials, led by Superintendent Patrick Murphy, say they face a projected $24 million gap between expected revenues and expenses for the fiscal year that begins July 1. Murphy told Civic Federation delegates that everything from higher class sizes to withholding pay raises could be on the table to close the gap.

“All those things are still in play,” said Murphy, who is slated to unveil his proposed budget on Feb. 19."

Two agenda items from the January 8, 2015 School Board meeting of special interest include the FY 2015 mid-year report (Informative Item F.3.) and the revenue sharing principles (Action Item G.1.):

  • Mid-Year Review: Additional state revenue of $500,00 is expected while net expenditure savings of $4.7 million, or a total of $5.2 million. Of that total, $2.5 million would be included in the FY 2016 Adopted Budget.
  • Revenue Sharking Principles: Four principles were listed, including the second, i.e., "The amount of the transfer to APS will initially be based upon the same percent of local tax revenue transferred to APS in the County’s last adopted budget. As budget deliberations continue, additional ongoing funding for the cost of student enrollment growth will be a top funding priority." In addition, "One-time revenue shortfalls or gains are shared," and "At closeout, APS will contribute to the County’s operating reserve based on the revenue sharing percentage in effect for that particular fiscal year."

The PPT slides from the Superintendent's presentation at the January 6 Arlington County Civic Federation monthly meeting are available here.

Growls readers who are Arlington County taxpayers, and who are concerned about spending by the Arlington Public Schools are urged to write or call the Arlington County Board or the Arlington School Board. Just click-on the link below:

  • Call the County Board office at (703) 228-3130.
  • Call the School Board office at (703) 228-6015.

And tell them ACTA sent you.

January 11, 2015

A Thought on Government, Business and a Free Society

"A truly free society is based on a vision of respect for people and what they value. In a truly free society, any business that disrespects its customers will fail, and deserves to do so. The same should be true of any government that disrespects its citizens. The central belief and fatal conceit of the current administration is that you are incapable of running your own life, but those in power are capable of running it for you. This is the essence of big government and collectivism."

~ Charles G. Koch, Chairman and CEO, Koch Industries

Source: His "I'm Fighting to Restore a Free Society," op-ed, published April 2, 2014 in the Wall Street Journal (behind the WSJ's paywall)

January 10, 2015

A Thought on Ideology and Poliical Struggles

"Just as the unconstrained vision urges judicial activism on judges, it urges "social responsibility" upon businessmen -- that they should hire, invest, donate, and otherwise conduct their businesses with an eye to producing specific benefits to society at large. The socially responsible businessman should, for example, hire the disadvantaged, invest in things that seem most needed by society rather than those most profitable to his firm, and turn part of the proceeds over to charitable and cultural activities, rather than pay all the proceeds out to the stockholders or plow them back into the business.

"The constrained vision sees such things as outside the competence of businessmen, given the wider ramifications of such decisions in a complex systematic process. According to the constrained vision of human knowledge, what is within the businessman's competence is the running of his particular firm so as to promote its prosperity, within the law. It is the systematic effect of competition, rather than the individual intentions of businessmen, which this vision relies on to produce social benefit. According to Adam Smith, it is when the businessman "intends only his own gain" that he contributes -- via the process of  competition -- to promote the social good "more effectually than when he really intends to promote it." Smith added: "I have never known much good done by those who affected to trade for the public good."

"The writings of those with the constrained vision abound with examples of counterproductive consequences of well-intentioned policies. But to those with the unconstrained vision, this is simply seizing upon isolated mistakes that are correctable, in order to resist tendencies that are socially beneficial on the whole. However, to those with the constrained vision, these mistakes are not happenstances, but symptoms of what to expect when the inherent limitations of individuals are ignored and systemic processes for coping with these limitations are deranged by specific tinkering."

~ Thomas Sowell, pages 56-57, "A Conflict of Visions: Ideological Origins of Political Struggles," Revised Edition

Source: Barnes & Noble 

January 09, 2015

Hold on to Your Wallets. Arlington County wants more!

We growled on both November 15 and November 30, 2014, telling Arlington County taxpayers the Arlington County Board would try to squeeze the turnip. In fact, at a joint County Board and School Board meeting on November 7, 2014, the two Boards learned the average tax bill would increase between $330 and $440 per year (at current tax rates).

Two months later, the Arlington County Manager hasn't changed her message. According to the lede of an online story posted this morning at the Arlington Sun Gazette:

"Arlington homeowners should squirrel away $300 to $440 to pay what is likely to be higher real estate taxes during the coming year.

"County Manager Barbara Donnellan on Jan. 6 confirmed previous estimates that call for an average assessment increase of 7 percent to 8 percent for single-family homes across the county, slightly less (5 percent) for condominiums."

Here's more from the Sun Gazette story:

"Under the tax rate of 99.6 cents per $100 assessed valuation, a home assessed at $600,000 generated a tax bill of $5,976 in 2014. If that home’s assessment rises 7 percent in 2015 and the tax rate remains the same, the tax bill will grow to $6,394.

"Speaking to the Arlington County Civic Federation, Donnellan said county officials are “very mindful” of the impact of higher taxes on many residents.

"“I will not recommend a tax-rate increase,” Donnellan said, acknowledging that the County Board has the power to impose one."

Growls readers who are Arlington County taxpayers, and who are concerned the tax burden of county taxpayers is climbing faster than the growth of their personal income 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 tell them ACTA sent you!

UPDATE (1/12/15): The PPT slides used by Ms. Donellan in her talk to the Arlington County Civic Federation on January 6 are available here.

January 08, 2015

Is PL4PG in Arlington County Manager's Rear View Mirror?

On December 3, 2014, we growled to urge the Arlington County Board to start over with its so-called Public Land for Public Good (PL4PG) covert affordable housing initiative, based upon a near-unanimous vote of the Arlington County Civic Federation.

At its January monthly meeting yesterday evening, Arlington County Manager Barbara Donellan told delegates of the Arlington County Civic Federation that she "aims to put ‘Public Land’ mess in rear-view mirror," or at least that was the headline of Scott McCaffrey's online story today in the Arlington Sun Gazette. Here's the lede from McCaffrey's reporting:

"If she had to do it all over again . . . she wouldn’t.

"That’s the shorthand version of County Manager Barbara Donnellan’s reaction to the beleaguered, and now scrapped, Public Land for Public Good process, which may have had the best of intentions but capsized in a sea of community discord."

He finished his reporting by noting:

"The (PL4PG) effort quickly became a battle royale between supporters of housing and backers of open space, with groups ranging from the Planning Commission to the Arlington County Civic Federation urging the whole process be abandoned. (emphasis added)

"And abandoned it was; new County Board Chairman Mary Hynes put the final dagger in its heart on Jan. 1, announcing formation of a new task force that would look at the same issue from a bottom-up perspective.

"Donnellan said she hoped the latest initiative would allow the community to “move forward in a positive way.”

Growls readers who are Arlington County taxpayers who still want to weigh-in on the PL4PG issue 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 tell them ACTA sent you!              

January 07, 2015

Will Civic Federation Pushback on County's Retail Plan?

First, a bit history, as presented in the Arlington County's Civic Federation's December newsletter:

"In 2008–2009, Arlington’s Economic Development Commission (EDC) reviewed the county’s 2001 retail action plan. (See Boutiques, Bistros & Banks on the county website.) Among its conclusions, EDC made the following observation:

“... [M]any policies have become overly prescriptive and, at times, too inflexible to allow for the creativity inherent to retail’s success. In addition, the overall review and approval process has become slow and costly, impacting the bottom lines of not only the developer, but the very retail businesses the County is trying to support.” (italics in original)

"Fast forward to 2014. At its Nov. meeting, the County Board voted to advertise the extensively revised Arlington County Retail Plan (see Nov. 5 draft’s URL below), which now runs 70+ pages, with final review and approval slated for Feb. 2015. The overhauled plan contains a number of sensible improvements. But there are some head-scratchers too.

"At the Nov. meeting, Board Chair Fisette noted, “it’s not a tweak ... it really is some significant change in practice and policy.” County Manager Donnellan commented, “This is a big deal....” Staff’s report highlights the 6 “principles” and 13 accompanying “policy” statements that will govern where and under which conditions retail establishments may locate and operate on designated streets.

"Of particular concern are the four new retail street categories (and a special category for intersections) being applied first to certain roads within the R-B, Crystal City and Columbia Pike corridors. Later, the plan’s new policies and retail street types are to be applied to other commercial areas in the neighborhoods. These categories dictate the specific types of retail establishments that can operate on a particular street or intersection whenever the property in question is being or has been redeveloped under the site plan process (which applies most properties along these corridors)."(emphasis in original)

Given the above history, an online story in the Arlington Sun Gazette today says, "Civic Federation may push back against proposed county retail plan." Here's the lede from the Sun Gazette story:

"The Arlington County government’s efforts to rewrite rules for retail development across the community may be running into brushback from the Arlington County Civic Federation.

"The federation’s (planning and zoning) committee on Jan. 6 presented a resolution calling on the county government to scrap the effort.

The complete Sun Gazette story is here. The Civic Federation's January 2015 newsletter is here. A copy to the county's draft retail action plan can be found here.

If you are an Arlington County taxpayer who is reading this Growls, and concerned about the draft retail action plan, 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.

And tell them ACTA sent you!

January 06, 2015

Harvard Professors in Uproar Because of ObamaCare

In a front page story in today's New York Times, Robert Pear writes (HT Michael Cannon, Cato@Liberty)

"For years, Harvard’s experts on health economics and policy have advised presidents and Congress on how to provide health benefits to the nation at a reasonable cost. But those remedies will now be applied to the Harvard faculty, and the professors are in an uproar.

"Members of the Faculty of Arts and Sciences, the heart of the 378-year-old university, voted overwhelmingly in November to oppose changes that would require them and thousands of other Harvard employees to pay more for health care. The university says the increases are in part a result of the Obama administration’s Affordable Care Act, which many Harvard professors championed."

And here's some of the whining from the Harvard faculty:

"Richard F. Thomas, a Harvard professor of classics and one of the world’s leading authorities on Virgil, called the changes “deplorable, deeply regressive, a sign of the corporatization of the university.”

"Mary D. Lewis, a professor who specializes in the history of modern France and has led opposition to the benefit changes, said they were tantamount to a pay cut. “Moreover,” she said, “this pay cut will be timed to come at precisely the moment when you are sick, stressed or facing the challenges of being a new parent.”

< . . . >

"The president of Harvard, Drew Gilpin Faust, acknowledged in a letter to the faculty that the changes in health benefits — though based on recommendations from some of the university’s own health policy experts — were “causing distress” and had “generated anxiety” on campus. But she said the changes were necessary because Harvard’s health benefit costs were growing faster than operating revenues or staff salaries and were threatening the budget for other priorities like teaching, research and student aid.

"In response, Harvard professors, including mathematicians and microeconomists, have dissected the university’s data and question whether its health costs have been growing as fast as the university says. Some created spreadsheets and contended that the university’s arguments about the growth of employee health costs were misleading. In recent years, national health spending has been growing at an exceptionally slow rate.

"In addition, some ideas that looked good to academia in theory are now causing consternation. In 2009, while Congress was considering the health care legislation, Dr. Alan M. Garber — then a Stanford professor and now the provost of Harvard — led a group of economists who sent an open letter to Mr. Obama endorsing cost-control features of the bill. They praised the Cadillac tax as a way to rein in health costs and premiums."

The remainder of Robert Pear's article is here:

Michael Cannon, director of Cato Institute's health policy studies, has two superb observations at Cato's blog, Cato@Liberty, on Pear's NY Times story. First, Cannon says,:

"As an irony junkie, this New York Times article on the outrage among Harvard’s faculty that they should face greater cost-sharing in their health benefits – and the incredulity of Harvard’s health economists at their colleagues’ reactions – is one of the most wonderful things I have read in the course of my career."

After some comments about irrational behavior, Cannon then concludes, saying:

"Now that the Smartest People In The Universe – the faculty at Harvard University, naturally – are displaying the same behavior as the supposedly irrational American public, would Reinhardt still describe that behavior as irrational? Or is it Reinhardt and like-minded health economists who are irrational for expecting the lab mice to behave some other way?"

Ah, the wonders of ObamaCare!

Readers of Growls who are concerned about the Affordable Care Act and its repeal 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 Don Beyer (D) -- write to him or call (202) 225-4376.

And, tell them ACTA sent you.

January 05, 2015

Virginia's Economy. Leader to Laggard?

Kenric Ward, chief of Watchdog.org's Virginia Bureau, writes today (posted at Townhall.com), "After years of outpacing the nation in economic growth, Virginia is sputtering. Employment is lagging, real estate is flat and the Obama administration’s War on Coal isn’t helping."

His reporting is based upon a report entitled, "Virginia’s Role in North American Energy Development," published by the Thomas Jefferson Institute for Public Policy, a free-market think tank. The Institute's report is a forecast of Virginia's economy for 2015. Here's the introduction to Ward's reporting:

"An economic forecast released Monday shows southwest Virginia’s coal country remains below the 2011 employment peak, with Lynchburg continuing to lose jobs. Bristol has recovered about half its lost jobs and Roanoke has regained just 38 percent, according to the latest statistics.

"The employment outlook isn’t much better statewide. Chmura Economics and Analytics estimates Virginia employment will rise 0.6 percent, compared with an expected U.S. gain of 1.7 percent.

"The tech sector continues to stumble, with jobs declining 0.8 percent from 2010-14, versus an 8.2 percent increase nationally.

"Virginia’s biggest growth areas are projected to be in education and health care. Health-care spending is being fueled by defense contractors getting into field, lured by the injection of billions of Obamacare dollars.

"Meantime, the administration’s War on Coal is stifling Virginia’s economy. Hundreds more of the state’s coal-mining jobs were lost in 2014 as the U.S. Environmental Protection Agency moved to shut down coal-fired power plants.

"Energy experts say the green-energy agenda pushed by the White House and Democratic Gov. Terry McAuliffe won’t generate prosperity.

"“Ask Germany and Spain how their commitment to renewables has worked out over the past 15 years. Spain’s economy is in a shambles. Germany is shutting down most of its offshore wind program and building coal-fired power plants as fast as possible to ward off financial disaster,” according to environmental scientists Dennis Mitchell and Willie Soon."

There's more to Ward's reporting, which you can read at the Townhall.com link, or at Watchdog.org's Virginia Bureau.

Readers of Growls who are concerned that Virginia's political class respond more favorably to special interests rather than to Virginia's working taxpayers 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.

January 04, 2015

Federal Income Taxes: Progressive and Paid by Highest Earners

Just before Christmas, American taxpayers got a big lump of coal from the the Congress, courtesy of the IRS. The Tax Foundation released a report based on new data from the Internal Revenue Service for 2012 showing the number of taxpayers, adjusted gross income, and income tax shares by income percentiles. (Fiscal Fact 445, December 2014) The report was authored by Kyle Pomerleau and  Andrew Lundeen.

According to the two researchers, "The data demonstrates that the U.S. individual income tax continues to be very progressive, borne mainly by the highest income earners." They highlight six main points:

  • "In 2012, 136.1 million taxpayers reported earning $9.04 trillion in adjusted gross income and paid $1.1 trillion in income taxes.
  • "All income groups increased their income and taxes paid over the previous year.
  • "The top 1 percent of taxpayers earned their largest share of income since 2007 at 21.9 percent of total AGI and paid their largest share of the income tax burden since the same year at 38.1 percent of total income taxes.
  • "In 2012, the top 50 percent of all taxpayers (68 million filers) paid 96.7 percent of all income taxes while the bottom 50 percent paid the remaining 3.3 percent.
  • "The top 1 percent (1.3 million filers) paid a greater share of income taxes (38.1 percent) than the bottom 90 percent (122.4 million filers) combined (29.8 percent).
  • The top 1 percent of taxpayers paid a higher effective income tax rate than any other group at 22.8 percent, which is nearly 7 times higher than taxpayers in the bottom 50 percent (3.28 percent).

To emphasize the fourth bullet above, Pomerleau and Lundeen provide the following chart:

So when President Obama and politicians like uber-Leftist Senator Elizabeth Warren say Americans need to pay their "fair share," what exactly are they talking about? Taxpayers would like to know! Or are they merely using class warfare to "divide and conquer?"

Better yet, take a look at the second chart provided by Pomerleau and Lundeen, which shows the effective tax rate of income earners. As shown in the chart below, the effective tax rate paid by the top 1% (AGI's above $434,682) is seven times higher than the effective tax rate paid by the bottom 50% of income earners (AGI's under $46.055):

Perhaps the Occupy Wall Street crowd might want to study the second chart for awhile?

Readers of Growls who are concerned about the burden of federal income taxation, 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 Don Beyer (D) -- We'll update the contact information as soon as it's available.

And, tell them ACTA sent you.

Kudos to the Tax Foundation for their work in keeping America's taxpayers informed.

January 03, 2015

Arlington County Board Launches Arlington Way Version 2.0

Well, ok, technically the Arlington County Board established the Arlington Community Facilities Study – a Plan for the Future. "a broad-based long-range planning effort aimed at developing a framework for assessing the County’s public facilities and establishing criteria for locating new facilities and financing their construction," according to the January 1, 2015 county press release. Here's the four "bullet points" from the press release:

  • Chair Mary Hynes: “new chapter in Arlington’s story”
  • APS-County-community partnership
  • Assessing needs, developing framework for siting, financing public facilities
  • Hynes, Board Member John Vihstadt to serve as liasons

The press release also highlights Board members 2015 priorities.

At the Arlington Sun Gazette, Scott McCaffrey headlines his report yesterday, "County Board resurrects ‘Arlington Way’ to try and jump-start planning efforts.," introducing it this way:

"Tacitly acknowledging that their top-down effort at addressing competing needs failed, County Board members on Jan. 1 returned to the more traditional bottom-up approach to find consensus from a roiled-up community.

"New County Board Chairman Mary Hynes announced creation of a committee that will spend the next year to 18 months studying the needs for community facilities – but she also made clear that its members are expected to keep fiscal reality in the forefront of their deliberations.

"Significant new funding to meet the capital needs “is unlikely,” Hynes said, since the local government and school system havenearly maxed out their short- and mid-term bonding capacity without imperiling the coveted AAA/AAA/Aaa bond ratings.

"The new group will be tasked with coming up with proposals that would mesh with a “sensible, long-term financial plan,” Hynes said."

The headline of Friday's Washington Post article, reported by Patricia Sullivan, which appeared above-the-fold of the Metro section, was zingier -- "Arlington leaders seeking advice" -- than the online headline -- "After bitter community pushback, Arlington County launches new planning process." The story, in which Ms. Sullivan interviewed Mary Hynes before the Board meeting, starts:

"Stung by a year of voter frustration over county spending decisions, the incoming head of the Arlington County Board announced a new effort Thursday to seek community input on whether and where schools, fire stations and other civic infrastructure should be built as well as on how to retain parks and open space.

< . . . >

"School Board members, who are also part of the outreach initiative, joined County Board members at the meeting.

"The effort is an attempt to restore the “Arlington Way” of seeking consensus before major public projects are started, Hynes said. It is also aimed at addressing voter dissatisfaction that became apparent with last year’s election of board member John Vihstadt (I), a critic of how the board conducted business and the first non-Democrat to join the panel in 15 years.

"Vihstadt’s victory in a special election last spring, and his reelection in November, was attributed in large part to community opposition to the Columbia Pike streetcar project, which Vihstadt made a central part of his campaign."

All that said, it's somewhat difficult to understand how 20 political appointees are going to do a better job than the County Board would do if it was effectively setting Board priorities. Perhaps the Board should also try reading "reader responses" that are posted at ARLnow.com or at the Arlington Sun Gzaette. Or perhaps, the Board should take advantage of social media and the "innovation economy" the 2014 Board chairman pushed at last year's organizational meeting.

Perhaps even better than a committee of 20 political appointees, the Board should encourage more feedback from Arlington's taxpayers. If you are reading this Growls, and you have thoughts about the priorities of your local government, you are urged to write or call the Arlington County Board. It would be a lot less expensive than hiring one or two highly paid bureaucrats to cater to those 20 appointees. Just click-on the link below:

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

UPDATE (1/4/15): The following comments are a response by Stephen Holbrook, "A Concerned Citizen of Arlington County" to the above Growls. I have Mr. Holbrook's permission to post them here. I made only two minor edits, ones which not even a spellchecker would have identified. The remarks were entitled, ""20 People to Advise Arlington County Board Members.

"An elected Board Member of Arlington County must understand their voters’ wants.  To gain that knowledge, the elected official must meet personally with the citizens they represent and listen to their concerns and not put a filter between themselves and the voters.  I have lived in Arlington County for over 34 years and I vote and I have never had an Arlington County Board Member approach me and ask me to talk and they then listen to my concerns and wants.  Now that is the problem with politicians today in that they isolate themselves from the voters and they put other people between them and the voters.  Most of them only listen to members of their political party for advice and a sense of direction.  Board Members must get off their duffs and get out and talk to the people walking down the street or speak with them while they are shopping in our stores and or eating in our restaurants.  At the same time it would be nice for Board Members to ask for the concerns of our business owners and business managers in person to get their wants.  That is why we pay them and give them a comfortable office to work out of so that our wants are heard and met.

"Politicians are servants of the people.  Politicians are not voted into office to be czars and lazy.  If politicians want to know how the people feel about a given topic they must go out themselves to get that answer from the voters and not send non elected people out to advise them on how the people feel about a given topic.  These 20 people that the Arlington County Board Members want to put between them and the voters were not elected to the Arlington County Board as a Board Member.  However, if we are going to have 20 people advising the Arlington County Board Members on the wants of the voters then they will be our brain trust and we should elect them to run our county and get rid of the current unwilling and lazy politicians. Being a politician and having that job is not an easy life if done right.  The job requires a sense of duty with a real desire to act in a good fiduciary manner and do the will of the people while following the laws of our land.  Anything less than a good politician in office will result in the chaos and one can now see that prevalent in our Arlington County Board. (underling in the original)

"I want to give to you one last thing for you to think about.  I hope all of us were taught in one of our high school classes about how stories can be changed when passed along from one student to other students.  In one of my classes the teacher wrote down a story for the last person in the last row to read and pass along to each student in the class verbally until the last person in the front of the class was told the story.  Well it was an eye opening exercise for all the students.  What was written done on paper and what the last student said he was told resulted in an ending story that had nothing to do with what was written on the paper.  Therefore, if our politicians really want to know what the voters think then they must talk to all of us individually and not rely on a filtering system to get to what we want in our county.  The Board job is tough and we need tough people in that job for our wants to be fulfilled by our Board Members.

January 02, 2015

Top Bills to Track in 2015 Virginia General Assembly?

With the 2015 Virginia General Assembly set to begin on Wednesday, January 14, Katie Watson, writing for Watchdog.org's Virginia Bureau (story posted at Townhall.com) identifies the "top bills to track in Virginia's 2015 General Assembly." She writes:

"Virginia lawmakers have some serious problems to tackle when they return to Richmond on Jan. 14.

"With the Jan. 6 sentencing of former Gov. Bob McDonnell fresh in their minds, lawmakers will wade through proposals to tighten rules on disclosure laws, lobbying after leaving the statehouse and gift limits.

"With the commonwealth still grappling with closing a $2 billion budget shortfall, lawmakers will have to take further steps to cut spending, close tax preference loopholes or raise taxes. Given the Republican majority and that 2015 is an election year for legislators, it’s pretty safe to say tax hikes are out of the question.

"Plus, with renewed concerns about privacy laws and police use of surveillance and military-grade equipment in the wake of the National Security Administration scandal and the events in Ferguson, Mo., delegates and senators will need to figure out how to balance safety, privacy and liberty.

"Here are some of the top bills and themes to watch for in 2015.

"1. Penalties for university employees who don’t report sexual assault – SB 712

"Following revelations about possible inaction in cases of suspected rape at the University of Virginia and elsewhere, Republican Sen. Richard Black has filed legislation requiring university employees to report incidents to police within 48 hours. Failing to do so would be a Class 1 misdemeanor. The proposed law doesn’t differentiate between public and private higher ed institutions. The law also doesn’t require alleged victims to make a report.

"Delegate Eileen Filler-Corn has filed somewhat similar legislation, HB 1343, requiring either campus police or local law enforcement to report any sexual assault investigation on university property to the local commonwealth’s attorney within 48 hours. Filler-Corn’s bill doesn’t come with penalty strings attached.

"The now-infamous Rolling Stone article that alleged a young student named “Jackie” was gang-raped at a UVA fraternity has turned out to be dubious. Still, UVA’s process of allowing “informal” resolution of alleged sexual assaults involving the alleged victim, alleged perpetrator and administrators has come under fire.

"2. No searching electronic devices without a warrant – HB 1274 and HB 1349

"Both Delegate Peter Farrell, a Republican, and Delegate Betsy Carr, a Democrat, have filed bills to prohibit authorities from searching all electronic devices — think cell phones, laptops or tablets — without a warrant . . . ."

You can read the remainder of Ms. Watson's article here, where she writes more about the following three categories of bills:

  • Lots of proposals to change Virginia’s ethics laws
  • Requesting an Article V convention from Congress
  • Decriminalizing marijuana possession

For more on Sen. Adam Ebbin's marijuana bill, and opposition to it by a student group, see this Arlington Sun Gazette story.

For more information about the Article V Convention of the States, follow this link.

Readers of Growls who are concerned with legislation affecting Virginia taxpayers are urged to contact their Senators and Delegates in the Virginia 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!

January 01, 2015

A Thought on Achievement, Privilege and Preferential Treatment

"Our schools and colleges are laying a guilt trip on those young people whose parents are productive and who are raising them to become productive. What is amazing is how easily this has been done, largely just by replacing the word "achievement" with the word "privilege."

"There are few modest talents so richly rewarded — especially in politics and the media — as the ability to portray parasites as victims and portray demands for preferential treatment as struggles for equal rights."

~ Thomas Sowell

Source: His 12/31/14 Random Thoughts column, posted at Investor's Business Daily