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February 28, 2015

Leftists and Progressive Taxation

 In his column today at Townhall.com, Dan Mitchell, senior fellow at the Cato Institute, asks "what’s the higher priority for Leftists, raising revenue or punishing success?"

Mitchell begins the column by writing:

"On the issue of so-called progressive taxation, our left-wing friends have conflicting goals. Some of them want to maximize tax revenue in order to finance ever-bigger government.

"But others are much more motivated by a desire to punish success. They want high tax rates on the “rich” even if the government collects less revenue.

"Some of them simply pretend there isn’t a conflict, as you might imagine. They childishly assert that the Laffer Curve doesn’t exist and that upper-income taxpayers are fiscal pinatas, capable of generating never-ending amounts of tax revenue.

"But more rational leftists admit that the Laffer Curve is real. They may argue that the revenue-maximizing rate is up around 70 percent, which is grossly inconsistent with the evidence from the 1980s, but at least they understand that successful taxpayers can and do respond when tax rates increase.

"So the question for grown-up leftists is simple: What’s the answer if they have to choose between collecting more revenue and punishing the rich with class-warfare taxation?"

He then delves into several research efforts that look at the tradeoffs involved. He also includes several helpful charts and tables, and concludes by writing:

"We like a flat tax because it treats people equally and it raises revenue in a relatively non-destructive manner.

"But because it is an “efficient” form of taxation, it’s also an “efficient” way to generate revenues to finance bigger government.

"Indeed, this was one of the findings in a 1998 study by Professors Gary Becker and Casey Mulligan.

"So does this mean that instead of supporting a flat tax, we should a loophole-riddled system based on high tax rates solely because that system will be so inefficient that it won’t generate revenue?

"Of course not. At the risk of stating the obvious, this is why my work onfundamental tax reform is intertwined with my work on constitutional and legal mechanisms to limit the size and scope of government.

"And it’s also why Obama’s class-warfare approach is so perversely destructive. If you think I’m exaggerating, watch this video – especially beginning about the 4:30 mark.

Here is the link to the Dan Mitchell's entire article, which itself includes links to various documents.

For more on progressive taxes, see this Econlib article by Joel Slemrod.

February 27, 2015

Science Groups Get $1 Billion in Grants; Can't Show How Spent

In a story posted two weeks ago at Washington Examiner, Luke Rosiak writes, "Science groups that got more than $1b in federal grants can't show how they spent the money."

Rosiak writes:

"Problems with the National Science Foundation allowing grantees to spend tax dollars for unallowable purposes may extend well beyond a recent case of a $25,000 Christmas party, $11,000 for “premium coffee services,” and $112,000 in federal funds that were spent to hire lobbyists to ask for more funding.

"We found that NSF approved proposed budgets for four major projects, totaling more than $1.4 billion, although it lacked sufficient information to ensure that the budgets represented the basis for a fair and reasonable price," the National Science Foundation’s Inspector General wrote in a new report.

"After 17 months of back-and-forth with auditors, the Ocean Observatories Initiative could still not provide “adequate documentation” showing how it had spent $88 million.

"The $344 million Advanced Technology Solar Telescope proposal was “twice found unacceptable for audit in 2010 due to: Unsupported estimates and outdated vendor; Lack of support for labor costs; Lack of support for indirect costs; Unallowable contingencies.”

"The science foundation gave $500 million to the Large Synoptic Survey Telescope in August 2014 even after the foundation’s own review found problems with their budget estimate. Out of 136 transactions the foundation sampled, it could not find supporting documentation for a single one.

"The latter two projects are administered by the Association of Universities for Research in Astronomy."

Rosiak concluded, writing:

"But most troubling to congressional overseers was that documents showed that the science foundation had known about what the National Ecological Observatory Network was doing since at least 2008, and did not stop it. It has also accepted other budgets despite problems raised by auditors.

"On Feb. 11, Sen. John Thune, R-S.D., and Sen. Bill Nelson, D-Fla., chairman and ranking minority member of the Senate Committee on Commerce, Science and Transportation wrote to the science foundation that the inspector general had identified "accountability over large facility cooperative agreements" as a "challenge."

"The committee asked for "a full accounting of funds" for the projects "to assure Congress and the American public that NSF is prioritizing ... financial management."

Read Rosiak's entire report here.

This story caught my attention because global warming activists frequently claim that scientists who are skeptical about the causes of global warming do so because their science projects are funded by producers of fossil fuels -- Exxon and the Koch Brothers being frequent targets. However, those same activists fail to be consistent whenever scientists who believe in anthropogenic global warming receive government funding. Marc Morano comments on this at Climate Depot in a post headlined, "Analysis of ‘tiny’ skeptic funding vs. warmists funding: ‘Total budgets for all of these [skeptical] efforts would probably not add up to a month’s spending by just the Sierra Club.'"

Not to mention that government employees at NSF are allowing grantees to live large on the taxpayers' tab, what with $25,000 Christmas parties and premium coffee service. Sheesh!

February 26, 2015

Why Arlington County May Not Want an Internal Auditor

In a story posted today at Watchdog.org, Kenric Ward, Watchdog.org's Virginia Bureau Chief, reports, "The Virginia Department of Health may be the most wasteful and inefficient agency in state government, a new audit suggests." (HT Townhall.com)

Ward went on to report:

"The department was cited for “material weaknesses” in five areas by the state’s Auditor of Public Accounts. No other state agency was found to have more than one material weakness — the most serious financial category in the fiscal 2014 report.

"Auditors dinged VDH for not submitting $5.1 million in infant formula rebates and Medicaid claims, even though the department has rebate contracts through the Women Infants and Children feeding program.

"The income from these contracts is used to offset food expenditures incurred by the program,” the auditors said. “By not submitting the invoices for rebates and Medicaid claims, the WIC program required more federal funds for operation than necessary.”

"Health Department officials agreed with the findings and reported the issue “is now corrected.”

You can read Ward's entire story here. And the audit report issued by the Virginia Auditor of Public Accounts report, dated June 30, 2014, is here.

We look forward to the day that Arlington County has an independent and fully-staffed, fully functioning internal audit department so that our trust in the efficiency, effectiveness, and economy of county operations is significantly raised.

February 25, 2015

Real Truth Is in the Notice of Proposed Tax Increase

Readers of the online Arlington Sun Gazette and ARLnow.com learned on Monday morning, February 23, 2015, that the Arlington County Board voted at their regular meeting on Saturday to advertise a 1.5 cent increase in the real estate tax rate (from $0.983 per $100 of valuation to $0.998 per $100).

From Scott McCaffrey's online story in the Sun Gazette, headlined, "Arlington single-family homeowners might face average tax bill near $8,000," we learn:

"Arlington homeowners may feel it’s like adding insult to injury: County Board members on Feb. 21 voted to advertise a higher real estate tax rate for the coming year, which if adopted would add to an already record-setting tax burden.

"Board members voted unanimously to advertise a rate of $1.011 per $100 assessed value, 1.5 cents higher than the current rate of 99.6 cents per $100.

"If that rate is adopted, the owner of a single-family home assessed at the countywide average of $790,300 would be on the hook for $7,990 in real estate taxes this year, an increase of 7.3 percent from the $7,447 a year before – owing both to the increased tax rate and higher assessments.

"At the County Board’s Feb. 21 meeting, chairman Mary Hynes acknowledged that wages of many living in the county are not rising at all, let alone at the rate of 7.3 percent. But she said advertising a higher rate would give the government flexibility to consider additional programs and funding beyond that contained in County Manager Barbara Donnellan’s budget."

The ARLnow story, headlined "Board Advertises Higher Tax Rate," includes the following reporting:

“While no one on the County Board wants to see tax rates increase, we believe that having flexibility at this point in time is necessary as we hear from the community, scour the budget for savings, evaluate programs and monitor economic circumstances,” Hynes continued. “Our final goal is to arrive at a sustainable, balanced budget that best serves all Arlingtonians.”

"Even if the tax rate were to remain the same, the average Arlington homeowner’s annual tax bill would increase $281 to $7,567, due largely to a rise in residential property assessments."

Both stories are accurate, but Arlington taxpayers need to dig deeper to learn the real truth in the numbers. To do that, one must look at numbers, which normally don't get a lot of sunlight. They come from the Manager's report to the Board for agenda item 22.A., i.e., advertising of the real estate tax rate (see February 21, 2015 Arlington County Board meeting). Turn to Attachment V, which is the Notice of Proposed Real Property Tax Increase; notice, however, that item #3 contains three instances of TBD, or to be determined.

Additional details can be found in the county's press release issued after the Board meeting on Saturday, or the press released issued on Thursday after the County Manager said that her budget was balanced with no tax rate increase.

For legal requirements, the Notice was advertised on page A5 in yesterday's Washington Times. Here is where taxpayers learn things that are not normally discussed elsewhere:

  1. First, we learn the rate of increased assessment. More specifically, we learn the "(t)otal assessed value of real property, excluding additional assessments due to new construction or improvements to property, exceeds last year's total assessed value of real property by 2.7 percent." (emphasis added)
  2. Next, we learn the "Lowered Rate Necessary to Offset Increased Assessment." This is "(t)he tax rate which would levy the same amount of real estate tax as last year, when multiplied by the new total assessed value of real estate with the exclusions mentioned above, would be $0.974 per $100 of assessed value. This rate will be known as the "lowered tax rate." (emphasis added)
  3. Third, and perhaps most importantly, we learn the "Effective Rate Increase." It involves a number that can be used in an "apples-to-apples" comparison with any other Virginia jurisdiction, telling taxpayers  "(t)he County of Arlington, Virginia proposes to adopt a tax rate of $0.998 per $100 of assessed value. The difference between the lowered tax rate and the proposed rate would be $0.024 per $100, or 2.5  percent. This difference will be known as the 'effective tax rate increase.'"
  4. Fourth, we learn the amount "the total budget of Arlington County will exceed last year's revised budget" based upon "the proposed real property tax rate and changes in other revenue." The increase would be 1.7%.

The Arlington County Board likes to tout that Arlington County has the lowest real estate tax rate in the region. That's true, but critics will point out it's also true that Arlington has some of the highest property values in the region. Fortunately, we have the Effective Rate Increase number so that we can make an "apples-to-apples" comparison. We don't need to hear Board members talking about trying to keep tax rates steady.

One other item relevant here is that between December 2013 and December 2014, inflation, according to the CPI-U index (Table 24, December 2014 CPI Detailed Report), inflation increased by less than 1%, specifically 0.76%.

So, once again, we have a greedy Arlington County Board plundering the taxpayers of Arlington County. See the Frederic Bastiat quotation we cited in our February 22 Growls earlier this week.

Growls readers who are Arlington County taxpayers are urged to write or call the Arlington County Board to express their opinion(s) on the need for Arlington County government to control spending so there is no need to increase tax burdens. Just click-on the link below:

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

And tell them ACTA sent you.

February 24, 2015

Internal Audit Bill Clears Senate

Two weeks ago, we growled when Delegate Patrick Hope's bill -- HR 2308 -- passed the House of Delegates.  The bill:

"Allows the governing body in a county with the county manager plan of government (Arlington County) to appoint a county auditor. The county auditor shall have the power to make performance reviews of operations of county agencies or county-funded programs to ascertain that sums appropriated are expended for the purposes for which such appropriations were made and to evaluate the effectiveness of those agencies and programs."

Now comes news, according to this online Arlington Sun Gazette story yesterday, that the bill cleared the "state Senate unanimously."

"So long as Gov. McAuliffe puts his signature on it, County Board members soon will have the authority to appoint a government auditor responsible directly to them.

"The state Senate OK’d the measure Feb. 20 on a 38-0 votr, sending it to the governor’s desk. It was patroned by Del. Patrick Hope (D-47th).

"Under Arlington’s form of government, the County Board has supervisory responsibility over only three people: the county manager, county attorney and clerk to the board. All others in the government workforce go up through the ranks of a bureaucracy led by County Manager Barbara Donnellan.

"Hope’s measure would allow, but not require, the County Board to hire an auditor. Like most new Virginia laws, it would go into effect with the start of the commonwealth’s fiscal year on July 1.

"When Hope first suggested the measure, it seemed an unlikely candidate for success, as it appeared to have no support among either Donnellan or a majority of the County Board. But board members opted not to stand in the way, clearing its path for passage Feb. 10 on a 100-0 vote in the House of Delegates."

You can read  the remainder of the Sun Gazette story here.

Readers of Growls are encouraged to thank Delegate Patrick Hope for sponsoring HB 2308. You can also contact the other members who represent Arlington County in the Virginia General Assembly: Senators (Adam Ebbin, Barbara Favola, or Janet Howell) and Delegates (Rip Sullivan, Patrick Hope, Alfonso Lopez, or Rob Krupicka).

And tell them ACTA sent you!

February 22, 2015

A Thought About Government

"As French economist Frederic Bastiat so incisively observed, government "is a racket for the enrichment of insiders, cronies, bureaucrats, and interest groups."

~ Editorial, Investor's Business Daily

Source: Investor's Business Daily 2/11/15 Op-Ed by Kerry Jackson.

February 18, 2015

FY 2016 Budget Train Leaves Station on Saturday, Feb. 21

In a story in the online Arlington Sun Gazette today, Scott McCaffrey reminds us that "Arlington tax bills, water-sewer rates likely to head higher." Here's the lede from his report:

"Arlington homeowners should brace for higher local-tax burdens in coming months, as both real estate tax bills and water-and-sewer rates are likely to rise.

"County Board members on Feb. 21 will advertise a 2015 real estate tax rate for public hearing, effectively setting the highest rate that can be adopted later in the budget season.

"In 2014, owners of residential property paid 99.6 cents per $100 assessed value. That equated to an average tax bill of $7,447 for owners of single-family homes and an average bill of $5,505 for owners of all kinds of residential property (single-family, attached and condominiums).

"The average assessed value of detached single-family homes rose 5.7 percent to $790,300 in 2015, while the average assessment for all residential property was up 4.9 percent to $579,800."

In addition to noting the County Manager is recommending increases in the trash-collection fee and the water rate, McCaffrey also points out that:

"Even if the rate simply remains the same,  homeowners will see their 2015 bills rise, on average, by several hundred dollars per year.

"They should be used to it by now: From 2005, to 2014, the average real estate tax bill for residential property rose from $4,023 to $5,434 – an increase of 35 percent, well above the 21-percent rate of national inflation during the same period.

"(In one sense, Arlington elected officials this year will be uniquely insulated against the political ramifications of raising tax bills yet again: the two County Board members and one School Board member whose seats are on the ballot in November have announced they will not be seeking re-election.)"

Read the Manager's reports to the County Board here; the budget/tax items are 22.A. through 22.H. The reports are worth reading, especially 22.A, which contains much historical information about the real estate tax rate, and 22.B. since it contains information to put the hated car tax into context.

Growls readers who are Arlington County taxpayers are urged to write or call the Arlington County Board to express their opinion(s) on the need for Arlington County government to control county spending so there is no significant increase in tax burdens. Just click-on the link below:

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

And tell them ACTA sent you.

February 17, 2015

Roads Over Transit and Bike Lanes? What a Concept!

At Watchdog.org today, Kenric Ward, Virginia Bureau chief focuses on House Bill 1470, sponsored by Delegate Dave LaRock (R-Hamiliton). According to Ward, the bill "requires the Northern Virginia Transportation Authority to run proposed transit projects through a congestion-relief rating system. Currently, mass transit is exempt from the requirement." (HT Townhall.com)

HB 1470 passed the House on a 97-0 vote on February 3, and today passed the Senate on a 38-0 vote -- see here for legislative history.

Here's the beginning of Ward's report:

"Arlington’s controversial streetcar project — and any other Northern Virginia rail ventures — will face a steeper climb if state lawmakers approve House Bill 1470.

"Delegate Dave LaRock’s measure requires the Northern Virginia Transportation Authority to run proposed transit projects through a congestion-relief rating system. Currently, mass transit is exempt from the requirement.

"The Hamilton Republican’s bill is buttressed by the House’s transportation funding package, House Bill 1887. That measure, by Delegate Chris Jones, R-Suffolk, prohibits highway maintenance and operating funds from going to transit projects, or to bike lanes or pedestrian trails.

"Making congestion reduction the pre-eminent criteria for transportation and land-use planning in Northern Virginia is another blow to Arlington’s streetcar venture."

Ward includes the following comment:

"Bob Chase, president of the Northern Virginia Transportation Alliance, has long argued for a prioritized system of approving road and transit projects. He supports LaRock’s bill, which requires that mass transit proposals be evaluated on the same performance-based standard as all other transportation projects."

You can read Ward's entire report here.

Readers of Growls are encouraged to thank members of the Arlington degation in Richmond for voting for HB 1470. For the record, members of the Virginia General Assembly who represent Arlington County are Senators (Adam Ebbin, Barbara Favola, or Janet Howell) and Delegates (Rip Sullivan, Patrick Hope, Alfonso Lopez, or Rob Krupicka).

And tell them ACTA sent you!

February 15, 2015

A Thought on Creative Destruction and Government

"Former Florida Governor Jeb Bush made a useful point in his speech to the Detroit Economic Club last week: Of the companies on the first Fortune 500 list in 1955, 88% “don’t even exist today or have fallen away.” That reality of American capitalism was clear from the news that RadioShack has filed for bankruptcy.

RadioShack began in Boston 94 years ago as a seller of radio gear growing into a chain that once had 7,000 stores and was a favorite of techheads and average consumers who wanted to buy a personal computer . . . .

< . . . >

"RadioShack joins the list of other famous American companies capsized by waves of creative destruction. The lesson is that in a capitalist economy no business triumph lasts forever, and the most dangerous moment can be when you are at the height of success. Andrew Grove, the former Intel CEO, summed it up when he wrote “Only the Paranoid Survive.”

"The same cannot be said for government, where failure is typically rewarded with more money. Despite its bankruptcy, RadioShack nonetheless made life better for millions of Americans while it prospered."

~ Wall Street Journal, Review & Outlook

Source: Editorial, Wall Street Journal, February 10, 2015 (behind WSJ's paywall)

February 13, 2015

CAGW Names January 2015 Porker of the Month

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."

Citizens Against Government Waste (CAGW) recently "named Senator Cory Booker (D-N.J.) its January Porker of the Month for his fatuous proposal that would interfere with the states’ constitutional rights to restrict or prohibit municipalities from building or expanding taxpayer-funded broadband networks.  If enacted, Sen. Booker’s Community Broadband Act would give the Federal Communications Commission (FCC) even more control over Internet service providers and, ultimately, consumers.  The senator’s bill parrots the recommendations made in a January 2015 White House report, “Community-Based Broadband Solution: The Benefits of Competition and Choice for Community Development and Highspeed Internet Access.” The report is the latest chapter of “Obama Knows Best,” the growing tome about how everything should be controlled by the federal government.  FCC Chairman Tom Wheeler is also supportive of the senator’s concept." (emphasis in the original)

Here's how CAGW justified their selection of Senator Booker as their first Porker of the Month for 2015:

"Currently, 20 states have enacted laws to protect local governments from making costly mistakes by building networks that they are ill-equipped to either manage or maintain. The restrictions range from requiring that municipal communications services must be both mandated by a referendum and demonstrate that it can be self-sustaining, to complete prohibitions on cities and towns selling telecommunications services if a private sector company already provides such services.  In 2004, the Supreme Court ruled in Nixon v. Missouri Municipal League that states may enact restrictions on the ability of local governments to provide telecommunications services.  Of note, the FCC then argued that states should have that power.

"In addition to legal and constitutional questions surrounding Sen. Booker’s legislation, government-owned broadband networks have been a financial drain on local taxpayers, lack long-term resources for maintenance and upgrades, and compete unfairly with existing providers, as CAGW set forth in “Telecom Unplugged: Ushering in a New Digital Era.”  In a June 19, 2014 Wall Street Journal column, CAGW President Tom Schatz and Utah Taxpayer Alliance Vice President Royce Van Tassell highlighted the problems encountered by one such initiative, the Utah Telecommunications Open Infrastructure Agency, whose inadequate business plan and lack of subscribers left the agency with negative net assets of $146 million.

“Both Sen. Booker and President Obama should stop trying to interfere with the states’ rights to decide whether municipalities can build broadband systems,” said CAGW President Tom Schatz. “The President and his allies in Congress do not know best on this matter.  Wrapping an unsuccessful business model into a ‘community development’ scheme is another example of overreach by the centralists in Washington, D.C. and would trample the rights of states and their taxpayers.”

And take a minute to vote for 2014's Porker of the Year -- HERE. Watch this NewsMaxTV show as CAGW's Leslie Paige discusses the 2014 Porker of the Year nominees.

Kudos to Citizens Against Government Waste (CAGW) for their efforts at ferreting out government waste, fraud, and abuse.

February 12, 2015

A Thought on Income Inequality

"The inequality-based critique of the American economy is a fundamentally dishonest one, for a half a dozen or so reasons at least. Claims that the (wicked, wicked) “1 percent” saw their incomes go up by such and such an amount over the past decade or two ignore the fact that different people compose the 1 percent every year, and that 75 percent of the super-rich households in 1995 were in a lower income group by 2005. “The 3 million highest-paying jobs in America paid a lot more in 2005 than did the 3 million highest-paying jobs in 1995” is a very different and considerably less dramatic claim than “The top 1 percent of earners in 1995 saw their household incomes go up radically by 2005.” But the former claim is true and the latter is not."

~ Kevin Williamson

Source: His 9/30/14 National Review Online column, "The Gelded Age: The inequality bed-wetters are misleading you."

February 11, 2015

Del. Hope's Internal Auditor Bill Clears House of Delegates

The paper edition of this week's Arlington Sun Gazette reports that legislation sponsored by Arlington's Delegate Patrick Hope (D) "moved forward," i.e., passing the House's Committee on Counties, Cities and Towns by a 22-0 vote. The bill is HB 2308, and would give the Board authority to hire an internal auditor.

In an online story today, the Sun Gazette report's the bill passed the entire House of Delegates on a voice vote. Here's the essence of the Sun Gazette's story:

"Arlington’s current form of government allows the County Board to hire and fire only three people: the county manager, county attorney and clerk to the board. All other government employees report up the chain of command to County Manager Barbara Donnellan.

"Hope said the bill would give Arlington officials the option to create an auditor reporting to the board, but would not mandate that they use it.

"The measure to give the County Board authority over an auditor was supported by, among others, the Arlington County Civic Federation and the Arlington County Taxpayers Association. County Board members John Vihstadt, Libby Garvey and Jay Fisette also supported the measure.

"The question of an auditor could become an issue in the upcoming Democratic primary for County Board. The first announced candidate, Katie Cristol, has signaled her support for one."

HB 2308 is now awaiting action by the Virginia Senate's Committee on Local Government.

A bit of history may be needed for readers new to this issue. Almost two years ago, on April 11, 2013, ARLnow.com reported that "Arlington lacks robust internal auditing, writing, "A local civic activist is calling for Arlington to improve its internal financial auditing, lest more spending snafus fall through the cracks." Later that month, on April 23, 2013, the Arlington Sun Gazette reported the County Manager was claiming the "audit function is being rebuilt."

We've also growled about the need for Arlington County to have a dynamic and properly-staffed internal audit function, most recently here, here, and here. The Arlington Public Schools hired an internal auditor a year ago -- see our April 5, 2014 Growls.

Last month, at the Arlington County Civic Federation monthly meeting, the County Manager told Federation delegates that "Arlington officials still on hunt for an internal auditor," according to the Arlington Sun Gazette.

Sure makes you think that some of Arlington's political elite, not to mention top-level bureaucrats, really don't want any oversight of county operations.

Growls readers who are Arlington County taxpayers are urged to write or call the Arlington County Board to express their opinion on the need for Arlington County government to have an independent, dynamic, and properly-staffed internal audit function. Just click-on the link below:

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

Readers of Growls are encouraged to thank Delegate Patrick Hope for sponsoring HB 2308. You are also encouraged to contact, especially, two of Arlington's three senators who are members of the Committee on Local Government -- Senators Adam Ebbin and Barbara Favola. For the record, members of the Virginia General Assembly who represent Arlington County are Senators (Adam Ebbin, Barbara Favola, or Janet Howell) and Delegates (Rip Sullivan, Patrick Hope, Alfonso Lopez, or Rob Krupicka).

And tell them ACTA sent you!

UPDATE (2/112/15): ARLnow.com covers the story here.

UPDATE (2/12/15). Yesterday, I was unable to find a workable link to the April 23, 2013 Arlington Sun Gazette article, but a very good friend, who has a far, FAR better filing system than I do, came to my rescue.

UPDATE (2/13/15): At ARLnow.com, Mark Kelly, former Arlington GOP Chairman and two-time Republican candidate for Arlington County Board, devoted his weekly column yesterday to the issue of Arlington County's hiring of an independent internal auditor, writing:

"With its unanimous passage in the House of Delegates, it seems on track to become law. Delegate Hope deserves kudos for pushing the bill towards passage.

"With this in mind, the Board should be building this office into its FY 2016 budget with the anticipation it will be approved. The Board should ensure the office is adequately staffed and has broad enough authority to examine county spending in a truly independent fashion.

"It seems as though the Board or the county manager had been dragging their feet on hiring an internal auditor under the current staffing structure as approved last year. The position is still vacant. So, the Board should set a self-imposed deadline to have an independent auditor in place of not later than July 1."

February 10, 2015

Virginia Lawmakers, the EPA and the General Assembly

Watchdog.org's Virginia Bureau Chief Kenric Ward reports how Virginia lawmakers are fighting the U.S. Environmental Protection Agency (EPA) over "increased electricity costs and the loss of state sovereignty" in a story posted today at Townhall.com.  Ward begins his report this way:

"State Sen. Frank Wagner, R-Virginia Beach, is taking on the U.S. Environmental Protection Agency’s “Clean Power Plan” with bills that would:

  • Require the State Corporation Commission to approve the closure of any power plan while protecting customers from higher rates stemming from the EPA rules.
  • Authorize the General Assembly to sue the EPA, using funds from the state Attorney General’s office.

Wagner’s SB 1349 passed the Senate on Friday with the support of the state’s largest utility, Dominion Power, as well as the Virginia Chamber of Commerce, the state NAACP and a majority of Democrats.

“This measure would reduce the rates for residential customers by about 5 percent,” camber President Barry DuVal said. “Industrial customers could see prices fall about 10 percent.”

Ward also points out:

"The SCC estimates the EPA rules will tack on at least $5.5 billion in compliance costs and $2.1 billion to prematurely close coal-fired power stations.

"Bracing for a showdown over federally imposed carbon emission rules, Wagner said he also wants to give the General Assembly legal resources to fight the EPA. Wagner’s Senate Joint Resolution 308 remains stalled in committee.

"Wagner’s two-pronged strategy may be the last line of defense against tougher EPA rules.

"SB 1442, which would have blocked spending by Democratic Gov. Terry McAuliffe’s Department of Environmental Quality until multiple lawsuits against the EPA are resolved, died in the Senate.

"State Sen. John Watkins, R-Midlothian, meanwhile, stunned consumer advocates by gutting state and consumer protections initially contained in his SB 1365.

“You might as well call it the McAuliffe-Watkins bill,” energy consultant Randy Randol told Watchdog.org in an interview. “Voting for the Watkins bill is like voting for a rate increase.”

"Watkins, who is retiring this year, has angered fellow Republicans for straying from the party line."

You can read Ward's entire report here.

Readers of Growls who are concerned with how this legislation affects consumers are urged to contact their members of the Virginia General Assembly who represent Arlington County -- Senators (Adam Ebbin, Barbara Favola, or Janet Howell) and Delegates (Rip Sullivan, Patrick Hope, Alfonso Lopez, or Rob Krupicka).

And tell them ACTA sent you.

February 09, 2015

Environmentalists Help Wealthiest 10% Get Richer

The National Center for Policy Analysis' (NCPA) daily policy digest today features a study showing that "electric car tax breaks benefit the wealthy" in the State of Washington, but those breaks "don't help the environment."

Here is how NCPA explains the January 2015 study by Todd Myers, Director of the Washington Policy Center's Center for the Environment:

"Washington Governor Jay Inslee recently announced a program to incentivize electric car buying, but Todd Myers of the Washington Policy Center says the program will only benefit the wealthy, without meaningfully reducing greenhouse gas emissions.

"Inslee's plan would provide sales tax breaks to individuals who purchase electric cars. But according to Myers, the people who purchase electric vehicles are already wealthy. In fact, half of Washington's sales tax breaks for electric cars go to residents in the wealthiest 10 percent of Washington zip codes. Those willing to purchase a $105,000 Tesla -- or even a $30,000 Nissan Leaf (an electric vehicle that costs 30 percent more than a comparable gas-powered model, even after accounting for the Washington tax break and a federal tax credit) -- are not likely to be swayed by the tax break.

"The proposal will cost the state of Washington $15.6 million in 2015 -- and for what? The Washington Policy Center says the state will see just $1 in environmental benefits for every $304 spent."

Here is the direct link to the Washington Policy Center's study. The report identified five "key findings:"

  1. Nearly half of sales tax breaks for electric vehicle buyers go to people living in the wealthiest 10 percent of zip codes in Washington state.
  2. About 97 percent of electric vehicle sales tax breaks go to Western Washington.
  3. Tax breaks go primarily to wealthy buyers who would likely have purchased electric cars anyway, so they result in few new electric vehicle sales.
  4. For the estimated $15.6 million in tax breaks, the environment receives almost no benefit from carbon emissions reduction.
  5. The same funding could be used elsewhere to reduce 1.2 million metric tons of CO2 – or all of the emissions of 253,803 cars for an entire year.

The Northwest News Network, a regional public journalism group recently asked "do electric cars still need support from taxpayers?" Tom Banse, who reported the story, pointed out:

"To avoid the appearance of subsidizing luxury buyers, the measure to extend Washington's electric car sales tax break places a new cap on the exemption. The break would be limited to the first $45,000 of each sale.

"If you can afford to buy a $65-70,000 car, you are going to pay some sales tax on everything above $45,000," said the legislation's prime sponsor, Democratic State Sen. Mark Mullet. "If you find a way to promote this technology, you will lower carbon emissions in the state of Washington without having to resort to a (carbon) tax."

"Neighboring Idaho offers no incentives to spur electric car purchases."

Makes a  taxpayer wonder just how much of a subsidy owners of hybrid, or "clean fuel," vehicles are getting because of the environmental "views" of the Arlington County Board. Well, take a look at the description of vehicle assessment in the Revenues section of FY 2015 Adopted Budget.

According to the budget, the average assessed value of a vehicle in CY 2014 was $9,284. Now take a look at the table labelled "CY 2014 State Block Grant Distribution." The total tax for a vehicle assessed at $10,000 would be $500. If your $10,000 vehicle was "conventional," then the State of Virginia paid $245 while the taxpayer paid $256 of the total car tax bill. However, if you owned a hybrid, or "clean fuel" vehicle, then the State of Virginia paid $325 while t he taxpayer paid only $175 of the total car tax bill. Thus, the Arlington County Board provides hybrid, or "clean fuel," vehicle owners a subsidy of $81. The subsidies go up as the vehicle's assessed value increases. Something to think about as the County Board will likely be asked by the County Manager to raise the average homeowner's taxes $300 to $440 this spring.

Growls readers who are Arlington County taxpayers who object to the subsidy given to hybrid vehicle owners in Arlington County 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!

UPDATE (2/10/15): Yesterday, I failed to point out the regressive aspect of the "clean fuel" tax break, the big bugaboo of our friends on the progressive left.

February 08, 2015

U.S. Dept of Energy Finally Pulls Plug on Clean Coal Project

Taxpayers for Common Sense (TCS) devoted their Weekly Wastebasket on Friday, February 6, 2015 to thanking the U.S. Department of Energy for finally pulling "the plug on the massive clean coal project known as FutureGen." TCS added, "Though a day late and a dollar short would be too generous (it is more like years late and hundreds of millions of dollars short) it was welcome news to hear that a billion more dollars earmarked for FutureGen in the Stimulus would be withdrawn."

TCS includes this link to a December 2011 news conference "calling for a rescission of the Stimulus funds in 2011 at a press conference in Springfield, IL." TCS was joined by representatives of the Heartland Institute, Friends of the Earth and the Illinois Policy Institute "to discuss the implications of the project. They were particularly concerned with environmental repercussions and the cost to taxpayers."

TCS provides additional information on the rise and fall of NextGen:

"Undoubtedly a financial and technical disaster from the get-go, if FutureGen had nine lives we hope this was its ninth and last. Proposed by the Bush Administration in 2003, FutureGen was originally purported to be a large-scale, multibillion dollar initiative of the DOE to build and operate the world’s first coal-fueled, zero emissions power plant.  The mega-plant was intended to produce hydrogen and electricity from coal, while capturing and storing carbon dioxide (CO2) emissions underground, a process known as carbon capture and sequestration (CCS).

"The plant, which had an original cost estimate of $1 billion, was to be funded by the Department of Energy and the private FutureGen Industrial Alliance, a group composed of seven members, including CONSOL Energy Inc., Peabody Energy, Rio Tinto, and Southern Company. However, as market prices continued to escalate through 2007, the DOE withdrew its support in early 2008 and the project was cancelled.

"Enter the Illinois boosters, including then-Senator Obama. As parochial projects often do, FutureGen had vocal bipartisan support from the region. So like a phoenix from the ashes, FutureGen came back to life, first as the same massive facility in 2009, then a year later, as a new plan designed to support several smaller commercial clean coal plants that were already being pursued across the nation. The new plan was called FutureGen 2.0.

"But 2.0 or not, FutureGen’s problems remained. Though the price tag was to be lower than the original project plan, estimates quickly increased from $1.3 billion to $1.65 billion.  In 2011, Ameren Corp., owner of the power plant to be used in 2.0, announced it would no longer participate in FutureGen. The FutureGen Industrial Alliance planned to transfer federal stimulus funds from Ameren to the Alliance and possibly purchase the Meredosia power plant.

"Apparently the problems were so bad that even the Administration began to question the project’s future and the $1 billion hanging in the balance. Though the funds were set to expire by September 2015, in a shocking move, DOE got ahead of it by canceling the project this week."

As noted, project funding would have expired later this year, but kudos to the Dept of Energy bureaucrats for recognizing that FutureGen deserves a place in the budget graveyard along with several others that TCS identifies.

The story was covered by the Washington Post, but except for coverage in technical media, it got little MSM coverage.  However, Fortune magazine did weighed in, saying, "The death of the flagship FutureGen project could spell the end of U.S. government investment in carbon capture and storage in the industry," adding:

"FutureGen proved exceedingly hard to kill. Like a TV zombie, the troubled carbon capture and storage project, once heralded as the future of the coal industry, survived more than a decade of false starts, cost overruns, federal funding cancellations, and utility abandonments. The Illinois-based program to capture carbon from a coal plant smokestack and store it in geological formations will evidently not survive, however, this week’s Department of Energy decision to shut off the money spigot.

"The FutureGen Alliance, which revived the project after federal support was withdrawn under the Bush Administration, in 2008, said with the loss of federal funding it has run out of options and will not move forward with plans to begin construction later this year. The cost of FutureGen 2.0 had been pegged at $1.65 billion, of which $1.1 billion was slated to come from the Department of Energy. To date the DOE has invested around $202 million in the project. It decided to pull the plug there." (emphasis added)

Looks like FutureGen is another project that didn't meet President Obama's criteria of being "Shovel Ready."

Readers of Growls are urged to contact their members of Congress. Ask them how many wasteful projects they have identified as part of their oversight of the executive branch of the Federal government? If they haven't found one, tell them they haven't been doing their job. 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.

And kudos to Taxpayers for Common Sense for their continuing work of bringing common sense to Federal government spending.

February 07, 2015

A Thought on the Greedy Hand of Government

"If, from the more wretched parts of the old world, we look at those which are in an advanced stage of improvement, we still find the greedy hand of government thrusting itself into every corner and crevice of industry, and grasping the spoil of the multitude. Invention is continually exercised, to furnish new pretenses for revenues and taxation. It watches prosperity as its prey and permits none to escape without tribute."

~ Thomas Paine, Rights of Man, 1791

Source: Founders' Quote Database, The Patriots Post

February 06, 2015

A Thought on Taxation

"No taxes can be devised which are not more or less inconvenient and unpleasant."

~ George Washington, Farewell Address, 1796

Source: Founders' Quote Database, The Patriots Post

February 05, 2015

A Thought on Tax Rates and Tax Revenues

“It is a paradoxical truth that tax rates are too high today and tax revenues are too low, and the soundest way to raise the revenues in the long run is to cut the tax rates.”

~ John F. Kennedy, 35th United States President

Source: "20 Inspirational Quotes ... About Taxes," Robert W. Wood, 9/20/13. Forbes Magazine; About.com.

February 04, 2015

‘Sneak and peek’ bill rolls quietly through General Assembly

Kenric Ward, chief of Watchdog.org's Virginia Bureau, describes how two bills are unfortunately quietly making their way through the Virginia General Assembly. Here's his lede paragraph (HT Townhall.com)

"Virginia lawmakers want to give local and state authorities the same sweeping search-and-seizure powers used by the FBI and other federal agencies under the Patriot Act."

More from Ward's reporting:

"Senate Bill 919, by state Sen. Jennifer Wexton, D-Leesburg, passed 39-1 last month. A similar measure, House Bill 1946 by Delegate Jennifer McClellan, D-Richmond, awaits action.

"The bills allow for “administrative subpoenas,” or what Virginia civil libertarian John Whitehead calls “sneak-and-peek searches.”

“You’ll never know you’re being investigated,” Whitehead told Watchdog.org in an interview.

"Bypassing the regular search warrant process, law-enforcement agencies could rifle through financial transactions, phone logs, computer records and other personal data without obtaining a judge’s approval.

"Fittingly, the Wexton-McClellan measures are quietly rolling through the General Assembly with little or no public notice.

"State Sen. Chap Petersen, D-Fairfax, was the lone vote against Wexton’s bill."

Senator Jennifer Wexton's (D-Leesburg) SB 919 -- available here -- passed the Senate 39-1 on January 22 while Delegate Jennifer McClellen's (D-Richmond) passed the House 98-0 (voice vote) on Tuesday, February 3 -- available here.

Kenric Ward also reported:

"Whitehead, president of the Charlottesville-based Rutherford Institute, called the measures “very Gestapo.”

"Noting that the FBI uses 30,000 “national security letters” a year to conduct searches under Section 215 of the Patriot Act, Whitehead said, “The Fourth Amendment is dead. There is no privacy any more.”

"The Wexton-McClellan bills would grant similar powers to local authorities who simply assert their searches are “relative to an ongoing investigation.”

"Mark Fitzgibbons, a Northern Virginia attorney, said the bills “eviscerate probable cause to a standard of ‘reason to believe that the records or other information being sought are relevant to a legitimate law-enforcement investigation concerning violations.’”

You can read Kenric Ward's entire report here.

Readers of Growls are urged to contact their members of the Virginia General Assembly who represent Arlington County -- Senators (Adam Ebbin, Barbara Favola, or Janet Howell) and Delegates (Rip Sullivan, Patrick Hope, Alfonso Lopez, or Rob Krupicka) -- to express their outrage that Virginia's legislators would give local and state authorities the same sweeping search-and-seizure powers, used by the FBI and other federal agencies under the Patriot Act, and are now being opposed at the federal level.

And tell them ACTA sent you.

And kudos to Kenric Ward for reporting this story.

February 03, 2015

A Thought on Economic Growth & Federal Revenues

"Since 1984 the Congressional Budget Office has tracked all revisions to its triennial projections of federal revenues, outlays and deficits to account for economic, technical and legislative changes. Its data—from the “Changes in CBO’s Baseline Projections” tables that are published annually in the CBO Budget Outlook, the Budget Update and the Analysis of the President’s Budget—indicate which federal policies grew or shrank the economy significantly enough to generate measurable revenue gains or losses. The data also reveal the failures of core Democratic economic policies and flaws within the CBO’s current economic model.

"One fact above all others emerges from the data: Economic growth is the single most powerful determinant of federal revenues.

"The CBO today projects that if annual gross domestic product were to average one percentage point higher (in real terms), there would be an additional $2.9 trillion in revenues and $370 billion less in federal spending over a decade. Conversely, its 10-year revenue projections have fallen $5.6 trillion since 2007. Most of the lost revenue was not due to the financial crisis and recession, but to the historically weak recovery."

~ Michael Solon

Source: His 2/3/15 op-ed, "What Democrats and the CBO Don't Get, Wall Street Journal (but behind their paywall).

February 02, 2015

Is the President's Budget 'More of the Same'?

As just about everyone living in the Washington, D.C. region who was awake today likely knows, President Obama released his $4 trillion Fiscal Year 2015 budget, which lays out his budget priorities for the fiscal year that begins October 1, 2015.

Here are the four main findings and the remainder of the executive summary from the very bipartisan Committee for a Responsible Budget's analysis of the President's budget:

  • The President’s budget includes sufficient revenue and spending cuts to pay for his new initiatives and reduce deficits by about $930 billion relative to current law over the next decade. Relative to the President’s baseline, the budget includes $2.2 trillion of deficit reduction.
  • Based on its own projections, debt under the President’s budget would remain relatively stable as a share of GDP, reaching 73 percent of GDP in 2025 compared to 74 percent today. In dollar terms, debt will rise from about $13 trillion today to over $20 trillion by 2025.
  • Deficits under the President’s budget would remain steady over the course of the decade at about 2.5 percent of GDP each year.
  • Between 2015 and 2025, spending will grow from 20.9 percent of GDP to 22.2 percent and revenue from 17.7 percent of GDP to 19.7 percent. Historically, they have averaged 20.1 and 17.4 percent, respectively.

Interest costs alone, in the budget, will grow from under $230 billion (1.3 percent of GDP) today to nearly $800 billion (2.8 percent of GDP) in 2025.

The President’s budget should be commended for responsibly identifying tax and spending offsets sufficient to pay for new spending and tax cuts, and setting aside additional savings for deficit reduction beyond that.

However, the budget does far too little to reduce current debt levels nor slow the growth of entitlement spending over the long-run. Under the President’s budget, debt remains roughly twice as high as in 2007 and higher than any time in history other than around World War II. Meanwhile, Social Security and Medicare remain on paths toward insolvency and both programs – along with interest spending – will continue to grow rapidly.

Ultimately, significant entitlement reforms will be necessary to put the debt on a sustainable path. And the longer we wait to enact these reforms, the larger and more abrupt they will need to be."

In an editorial posted earlier this evening, Investor's Business Daily says the President's budget is simply, "more debt, more spending, more of the same." Here's the lede from the editorial:

"Fiscal Policy: President Reagan's annual budgets and their spending cuts were always derided as "DOA: dead on arrival." President Obama's latest spending plan may be the first to be stamped "DBA: dead before arrival."

"But that's good news, because his $4 trillion blueprint, the broad details of which were revealed during his State of the Union address, isn't so much a spending and tax plan as a grandiose political/social statement about where this president wants to take the nation: even further left.

"The thinking behind this wish list of new taxes and spending is that government — not private businesses, entrepreneurs, workers and employers — is the primary springboard of growth. It reflects the philosophy of a president who tells America's great companies and small-business men and women: "You didn't build that."

"The plan would lift spending by $74 billion over the spending caps the president himself invented back in 2011. To entice Republicans to go along, he's offering $35 billion more for the military.

"Over five years his budget would spend almost $350 billion over the self-imposed caps — which are the main reason the deficit has been falling in recent years."

"The era of big government would be back with a vengeance. Obama wants a preposterous 7% spending hike this year for government agencies — with more nanny-state money for schools, early-childhood education, roads and bridges, child care, green energy and corporate welfare for manufacturers.

"He calls this bloat "middle-class economics." But when was the last time American families who'll have to pay for all this had a 7% pay raise? . . . . "

The Washington Post's Lori Montgomery and Stephen Mufson coverage is here. In their lede paragraph, they say:

"President Obama’s $4 trillion budget request, packed with familiar proposals for new spending and higher taxes, landed Monday on the doorstep of a Republican Congress eager to end an era of political gridlock — giving Obama unexpected leverage in coming negotiations."

Stephen Dinan's covers release of the President's budget for the Washington Times under a headline that reads, "Obama says he won’t accept budget that doesn’t raise spending." His lede:

"With $3.999 trillion in total spending, more than $1 trillion in new taxes over the next decade and a host of controversial new spending, the 2016 budget President Obama submitted Monday amounted to a declaration of political war against Republicans on Capitol Hill, who flatly declared his plans dead.

"Mr. Obama said the economy has recovered enough that it’s time to begin spending again. He called for reversing the “sequester” cuts and instead pumping hundreds of billions of dollars into the economy in infrastructure spending over the next decade, paid for by his proposed tax increases.

"I’m not going to accept a budget that locks in sequestration going forward,” the president said. “It would be bad for our security and bad for our growth. I will not accept a budget that severs the vital link between our national security and our economic security.”

An overview of the President's FY 2016 budget is in the following graphic that appeared in Mr. Dinan's article.

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.

February 01, 2015

A Thought on the National Debt

"The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

~ Thomas Jefferson

Source: Patriot Post's Founders' Quote Database