Monthly Archives: April 2004

Wonder Which Paper CJR is talking about?

The Columbia Journalism Review’s Campaign Desk blog has an item about how disengaged voters seem to be. Zachary Roth writes:

One antidote to help clear the air and possibly keep potential voters engaged is quite simple: Journalism that goes beyond just dumping the claims and counter-claims of two competing politicians into readers’ laps and then walking away. But 16 weeks into this experiment that we call Campaign Desk, it’s becoming increasingly clear that the newspapers that the rest of the profession look up to — the handful of papers thought to be the class of their field — too often don’t practice that kind of journalism. Day after day, in fact, few of them go much beyond the he-said/she-said school of journalism that leaves readers neither satisfied nor informed.

The papers that are looked up to just might include one that serves Northern Virginia. Hint: It isn’t the Northern Virginia Journal.

Speaking of the Not-the-Northern-Virginia-Journal, read Howard Kurtz “Ad-Watch” piece today. As with most of his pieces, he finds a way to criticize liberals, in this case MoveOn that is airing an ad contrasting Kerry’s Vietnam service with W’s “Hide in the Guard” tour of duty. Kurtz admits the ad is accurate, but adds:

The spot deals with Kerry’s war exploits but not his controversial statements and returning of his award ribbons after Vietnam. Similarly, it deals with a gap in Bush’s Guard record but not the risks of his decision to fly fighter jets.

Gee, Howie, I didn’t know the ad was supposed to give the history of the world in 30 seconds. And Bush’s “risk” flying planes? If that qualifies, surely we must add the risks Bush took driving drunk.

Liberal Bias?

Chicago Tribune’s public editor, at other papers known as the ombudsman or the internal critic, accuses the mainstream media for protecting Bush’s inarticulateness. And even his “misfeance.”

(Thanks to Poynter Online for the this and the Nighline info.)

Virginia News

A compromise appears nigh regarding how some of the new education funding from the sales tax increase will be distributed. Currently school funding comes from a variety of pots and distributed in several ways. One method is through the SOQs that use the local composite index. The LCI favors poorer areas. The LCI is widely criticized in areas such as Fairfax, which through that formula gets about 23 cents back for every $1 it sends to Richmond.

There are also formulas for specific program funds that are distributed based on students’ special needs. Fairfax, with its high immigrant population, gets a better return under this formula.

And the one cent of the current sales tax that is dedicated to schools is distributed based on the number of school age kids in an area.

But the additional ¼-cent for education approved in the tax bill, expected to amount to more than $350 million, is likely to be distributed using yet another calculation, perhaps a hybrid formula.

Given these disparities, negotiators are talking about splitting the difference. They would take the one-quarter cent set aside for education and divide it in half. That means they would send one-eighth of a cent back to local governments via one method, school-aged population. Another eighth cent would be based on the basic aid formula. That’s just one scenario, but there may be others.

Of course, Fairfax, Loudoun and only a handful of other school districts get little sympathy in other areas of the state. The Roanoke Times railed against whiners in the northern ‘burbs, citing the return they get from the car tax

…[The car tax reimbursement] made no account for the wide variation from jurisdiction to jurisdiction in the size of the local-option levy. By commingling local and state finances, state reimbursements to localities for forgone car-tax revenues amount to an income-transfer program from the poor to the rich. High-tax, high-spending local governments in high-income localities are rewarded for their profligacy; low-tax, low-cost local governments in low-income regions are penalized for their thriftiness.
It’s as if Northern Virginians perceive a divine right to have purely local operations – their rec centers, their school-enrichment programs, their city and county bureaucracies – subsidized by their poorer country cousins to the south and west.

But it’s OK of course for Fairfax to subsidize Roanoke schools.

And here’s a story about one well-to-do Virginia county with students whose SOL scores are among the highest in the state and yet now, with a bill passed this session, will get special treatment and more Northern Virginia dollars so wealthy landowners in this special county can keep more of theirs.

There may circumstances that make this just, but that doesn’t excuse Richmond Times-Dispatch reporter Calvin Trice’s apparent bias.

Gov. Mark R. Warner approved a measure that will link the western county’s unusual population to Augusta County’s as a way to ease Highland’s unfair financial burden for public education.

I’ve never read a story about Fairfax’s “unfair” treatment under the LCI.

The index, a state funding formula designed to treat poorer counties more equitably in the appropriation of state dollars for school systems, was mistaking Highland for a wealthy county, instead of one with deteriorating public buildings and that offers no recreation for its citizens.

“Mistaking” Highland County for wealthy? Maybe its buildings are deteriorating because the county isn’t charging absent landlords enough in property taxes. Highland County calls itself “Virginia’s Switzerland.” Do you suppose that’s because it’s become a tax haven for wealthy landowners?

Outsiders have been buying property in Highland during the past 20 years, causing land values to soar. As assessments rose, the composite index for the county shifted more responsibility for public education onto the county government.

And as assessments soared, Highland County lowered its real estate tax rate. Folks in other parts of Virginia don’t seem sympathetic to Northern Virginians as their assessments have soared, raising property taxes more than $1,000 in recent years in Fairfax, for example. In fact, justification for the LCI is that Fairfax has the money to pay for its problems. Most of that is paid by property owners. Why shouldn’t Highland’s property owners pay higher taxes?

Currently, wealthy Highland landowners pay 62 cents per $100 valuation, up from 50 cents a few years ago. While new homes are selling for about $120,000, according to county officials, many of the absent landlords have paid not for the homes as much for the land where they build second homes that you and I could probably never afford. Meanwhile, Fairfax County’s real estate tax rate is $1.10 per $100, almost twice Highland’s. Yet, Trice writes, “Without relief from the index equation, Highland’s ability to run a separate school system was in doubt.”

I wonder if wealthy Fairfax can get some “relief” from the state.

The College of William & Mary, where according to some students the motto should be “If it doesn’t hurt, you’re not learning,” costs for the 65 percent of the student body who are Virginians are going up 7.7 percent, including a 10.4 percent tuition hike. The 35 percent from out of state are seeing only a 3.5 percent total cost increase.

Who exactly are we paying for with increased taxes?

“What can we charge and still get high quality out-of-state students?” asked W&M President Timothy Sullivan. “We need to be able to answer these questions.”

Students might perceive something unjust in the difference in costs for in-state and out -of-state students who get the same education, said Robert Archibald, director of the public policy program.

Ah, but do the out-of-state- students pay the same Virginia taxes? Of course not.

Board member and former state Sen. Hunter Andrews argued that having a diversity of faculty and students was an important part of maintaining a national reputation.

“Wouldn’t it be horrible to have nothing but Virginians here?” asked Andrews.

Yes, we wouldn’t want all those horrible Virginians taking up space at colleges they pay taxes for.

Some quotes for today:
“What happened is that Virginians knew that we had cut as much as we could – if they remember nothing but the closing of the DMVs – and we would still be looking at red ink for the rest of the decade,” said [Gov. Mark] Warner, who could have boasted that closing DMV offices was the smartest political move he made. It set the stage for this year’s tax increase.

“It’s not enough … to simply state your ideological position over and over again at higher decibel levels,” [Democratic House Minority Leader Franklin] Hall said. “What we need to do is come down and listen to each other, and stand up for those things you feel strongly about.”

Del. Hall, this is what you’re up against:

“The 17 [Republicans who voted for a tax increase] are fine persons, each of them,” [Republican and former Del. Paul C.] Harris said. “But when liberal or moderate ideology trumps party affiliation, why shouldn’t Republican elected officials who abandon the party’s core conservative fiscal principles expect a conservative challenge as a matter of course correction?”

You see, it’s OK for conservative ideology to trump party affiliation, but not for moderate or liberal ideology to do so.

Harris goes on to say, “These are people who gave enormous time and effort to the party because they want the Republican Party to be the party of Ronald Reagan.”

Would that be the Ronald Reagan who had to ask for tax hikes in 1986 because his earlier tax cuts put the country so far in debt?

No matter where you stand on abortion, this should outrage you.

An anti-abortion group is protesting a school principal’s decision ordering students to remove their anti-abortion T-shirts. Spotsylvania School Superintendent Jerry Hill said the principal, Sheila Smith, took action after students began debating abortion in a class.

God forbid, kids should debate this topical political issue in class.

Hill said the school system’s policy permits principals to bar “any apparel that causes a disruption to the educational process.”

And what process would that be? The thinking process?

Virginia News

The Washington Post headline overstates and in some ways contradicts the gist of the article.

Republicans who voted for tax increases are likely to face primary challenges from anti-tax candidates. Winners could then enter a general election unsure whether the whole party was behind them.
In effect, some politicians and observers say, there could be three parties in Virginia: Democrats, Republicans and anti-tax Republicans….
The centrist Democratic Leadership Council declared “an astounding political victory for New Democrat Gov. Mark Warner” and suggested that other party leaders study his governing style…

[Grover] Norquist … blamed the loss in Virginia on a “total lack of leadership….”

If [Democrats] can avoid being labeled pro-taxes, they can run as the protectors of education, health care, public safety and other core state services.

“Without us, we wouldn’t have come up with a budget,” said Del. Brian J. Moran (Alexandria), chairman of the House Democratic Caucus. “We avoided a government shutdown, we preserved our credit rating, we governed responsibly. The Republican majority has been in disarray, and it’s a demonstration of their inability to govern, and that’s what we’ll run on.”

I’m not convinced that’s enough to run on – and win. In fact, Del. Terry Kilgore (R-Gate City), who voted against the tax hike and car tax cap, previewed what could be the right’s platform for ‘05

“I took my stand. And I think those of us who took our stand, we were able to at least reduce the tax load on the citizens of the commonwealth from what it might have been otherwise. The Senate started out at $3.8 billion (in increased tax revenues), and now they’re down to $1.2 billion or thereabouts,” he said Wednesday.

“By taking a principled stand we were able to protect the citizens from an even bigger tax load. So I’ll not say we totally lost. But compromises have to occur, and I look forward to working with the (Southwest Virginia) delegation on all these other issues we’ve got to work on for Southwest Virginia.”

And conservatives can succeed if Democrats decide to sit on their laurels as “the party that can govern.” What will be imperative in the 18 months before all delegates run for re-election is for Democrats to 1/prove that the state government will successfully manage the new monies, 2/admit this isn’t nirvana; there are still needs that must be addressed, and 3/show they have a couple of ideas of how to save taxpayers money.

While many in the House have abandoned their anti-tax philosophy, the Assembly has yet to depart from its big-spending creed. The legislature failed to take steps to avert the next shortfall, which almost certainly will occur the next time the economy slows, even with the tax hikes. If the House cannot insist on keeping tax increases to a moderate level below $1 billion, then at the least it should insist on socking away a significant portion of the new revenue in the rainy-day fund. Having caved on taxes, it also should insist on some form of quid pro quo on the spending side of the ledger – namely, a constitutional amendment holding future spending increases to some factor of population growth plus inflation. If it does not, then the Assembly’s terminal case of dollarhea will produce more “shortfalls” in the coming years.

[The tax bill] does not overhaul the state’s tax structure to make tax burdens measurably fairer; it does not raise the top income tax bracket; it keeps the state’s cigarette tax far lower than it could be. It generates no substantive funds for much-needed road improvements. Though the legislation closes some loopholes that allow corporations to shift their profits out of the state tax-free, it leaves exemptions and other escape hatches.

The tax plan approved Tuesday by the Virginia General Assembly is called “tax reform” by its proponents, “tax increases” by its opponents.

In fact, the plan is neither.

Reform? The slightly progressive state income tax is made slightly more so – but the regressive state sales tax is expanded and raised by half a cent.

Increases? As a percentage of personal income, taxation in Virginia will still be significantly lower than just 10 years ago and will still be lower than in most other states.

In fact, the plan is damage control.

The passage of the tax increases throws the politics of the ’05 political campaign in Virginia into a netherworld where Republicans can’t promise to hold the line on taxes and Democrats can’t say the sky is falling.

Therefore, what is called for is a rational debate on where we go from here and how. Of course, “rational debate” shouldn’t even be on the same page (or blog) with the words “political campaign.”

But those of us about to charge the next windmill never say never.

Speaking of politics.

“Taxes suck the lifeblood out of families, businesses and our economy’s growth,” [Del. Joe May (R-Loudoun) said April 12 when he announced he was seeking the Republican nomination for lieutenant governor next year.

Yesterday, Mr. May, who has not signed the anti-tax pledge, said he voted in favor of the tax increases because it was necessary to end the stalemate.

“I am still very much opposed to taxes, but in this case I’m more opposed to failing to achieve a budget,” he said. “I felt if we didn’t do it [Tuesday] it wasn’t going to get done.”

Or maybe this was the reason.

There may be a sine die vote tomorrow.

The Hampton Roads Daily Press weighs in on local races.

Show me the Money

With the agreement on taxes behind Virginia lawmakers, what is likely to be the most contentious issue is how funds raised by half of the sales tax increase will be distributed.

The intent was for the money to go to schools. But apparently the bill doesn’t require that. The money could be used by localities to reduce property taxes, meaning a fight soon to be enjoined by school advocates will be at local levels.

How much they will be fighting over is also yet to be decided. There is reportedly a promise from the Governor to support a plan to distribute the ¼-cent based on student population, and not the local composite index, a formula that considers an area’s ability to pay for its own schools.

Currently, the one-cent of sales tax that is dedicated to schools is distributed through a formula that considers the number of students in a jurisdiction.

Under the LCI, on the other hand, Fairfax and other wealthier areas get the short end of the stick. The quarter percent could be as much as $54 million or as little as $24 million, depending on whether school age population or the LCI is used.

Sen. John Chichester apparently prefers the LCI.

Chichester disagreed with his colleagues from Northern Virginia, saying [using student population] would harm disadvantaged schools.

“Because of the car tax, are you going to make the disparity greater between the haves and the have-nots?” he asked. “If you want to exacerbate disparity, I think you are cruising for an untenable situation.”

What Chichester doesn’t mention that his area, Stafford County, although growing quickly as it attracts many affluent families fleeing northern suburbs, is still considered an area with little ability to pay. Its LCI is less than half that of Fairfax. So while Chichester may be looking after the have-nots, he’s also looking after his own constituents. That’s a fair strategy, but he shouldn’t paint it is as something noble.

Why isn’t every child treated equally? Sure, some areas have a greater ability to pay, but they also much higher costs from everything from teachers and the cost of building schools to helping the many immigrant children with special needs.

Virginia News: The Tax Politics

Much speculation in this morning’s papers on who won and who lost the political battle. Obviously, Gov. Mark Warner is getting praise.

“He staked his reputation for leadership on this package and in breaking the political model on taxes in Virginia,” said Mark Rozell, a professor at Catholic University. “It was a remarkable accomplishment to get a Republican legislature talking about the need for new revenue, largely on his terms.

Consultant Hal Malchow said that victory will “raise Warner’s stature in national Democratic ranks because there just aren’t that many success stories in this area. He has offered national Democrats a lesson in how to win both election and legislative battles in a conservative Republican state.”

“It’s a huge victory for the governor,” said Robert D. Holsworth, an expert on Virginia politics at Virginia Commonwealth University.

“He has staked his legacy on this. He took on a fight that a lot of people didn’t think he could win, but at the end of the day, the package looks an awful lot like the one he introduced.

“The only question is how Warner’s legacy will play down the road” if he seeks another office, Holsworth said.

“When Republicans end up making Mark Warner a viable Democratic vice presidential candidate, there’s a reason they call us the Stupid Party,” said Del. Robert G. Marshall, R-Prince William.

Editor’s Note: No, Mr. Marshall, Republicans aren’t stupid, try as hard as you may try to prove it.

“This is historic,” said Del. Brian J. Moran (D-Alexandria), who chairs the House Democratic caucus. “We recognized the unmet needs of the commonwealth.”

Others disagree.

First, although the legislators’ plan would keep the wolf from Virginia’s door for the time being, it – like the governor’s plan – represents only the bare minimum of responsible governance. That may satisfy worried Wall Street analysts, who have threatened to downgrade the state’s bond rating and so increase the interest rates Virginia pays on bonded indebtedness. But the plan funds only existing commitments and fails to provide for the possibility of new ones.
For example, the Senate’s initial plan, calling for $3.8 billion in new revenues for 2004-06, included $1.6 billion in new money for transportation. Instead, Virginia’s transportation system will continue to limp along on one fiscal cylinder as the gas tax continues to drop in after-inflation dollars.

And a main purpose of the Governor’s initiative went unfulfilled.

…the package did little to fundamentally make the tax code fairer. It did not, for instance, significantly shift more of the burden onto corporations, and it did not change the sales tax system by expanding it to cover services, such as lawn care, pedicures or accounting.

“This was not about fairness. What this ended up being about was raising more revenue,” [David Brunori, contributing editor to a tax policy magazine called State Tax Notes,] said.

It does not remedy the bias in the sales tax that exempts services in a service-driven economy. It retains an antiquated income-tax structure in which the highest tax bracket starts at $17,000. And, so far as the car tax is concerned, this plan replaces one convoluted collection and reimbursement system with another.

But it may have been our last chance for awhile.

“This is the tax increase for this generation,” said Sen. Kenneth W. Stolle, R-Virginia Beach, who was a key negotiator for the compromise. “It will probably be the last one for another 25 years.”

Why did conservative Virginia lawmakers pass a tax hike?

It was at town hall meetings that the tide turned, lawmakers said. House Republicans who returned home after adjourning the assembly’s regular session without a budget were deluged by angry constituents.

Editor’s Note: Ironically, the above is from this morning’s Washington Post, a paper that largely ignored the meetings.

Warner apparently cleared a major sticking point in the House, assuring delegates that new tax money earmarked for public schools would be split among localities according to the number of students. (Emphasis added)
Even the business lobby, increasingly irritated by the intransigence of the House, helped press delegates. Corporate executives were enlisted for last-minute telephone calls to at least one senior lawmaker.

And just a “Huh?”

“I didn’t like the way it was done, but we now have a new pot full of money, and I’m sure we’ll spend it all,” said [Del. Vince Callahan the House budget chairman].

“I don’t think we’re at an impasse any longer,” said Del. Vincent F. Callahan Jr., the House budget chairman. “I think we made substantial progress today.”

Callahan voted against the tax hike and the car tax cap.

And finally, the $64,000 question is how?

…legislators and political observers said the standoff and hard-fought remedy could dramatically color the 2005 elections for governor, lieutenant governor, attorney general and 100-member House by shifting debate away from taxes.

Virginia News: The Votes

Why did Abbitt, Hogan, Landes and Saxman vote No on the tax hike but Yes on the car tax cap?

Why did Petersen, Rust, Jim Scott and Shannon vote Yes on the tax bill but No on the car tax cap?

Why did Hamilton not vote on the tax bill and vote against the car tax cap?

Why did Orrock vote for the tax hike but didn’t vote on the car tax cap?

Why did Frederick vote against the tax hike but didn’t vote on the car tax cap?

Why did Reese and Callahan desert the “maverick” GOP group on both votes?

Why did May and Orrock join them?

Why didn’t Shuler and Weatherholtz vote on either measure?

Votes by Petersen, Rust, Jim Scott and Shannon can be explained by geography. They represent Fairfax where the car tax cap hurts. Guess is that, since the vote wasn’t needed to put the cap on the car tax, the Governor and Democratic leaders gave them a pass on the car tax vote. I don’t think anyone of them would have scuttled the deal by casting a deciding vote against the cap. (Sen. Jeannemarie Devolites voted for the Senate’s compromise tax bill that included the car tax cap but voted against the cap when the Senate voted on the stand-alone measure. For voters, I’m sure she’ll highlight the former vote.)

Reese and Callahan may have had similar reasons, knowing their votes weren’t needed. But to voters they’ll argue they were against the tax hike because it went so far beyond what they voted for in the original HB 5008. They’ll also say they protested the continuation of the estate tax. Both represent high net worth constituencies.

Hamilton argued that the ¼-cent sent directly to localities wouldn’t be used for property tax relief.
“That’s a sham,” Hamilton said. “There’s nothing that does local tax relief in here, that’s kind of disingenuous as far as I’m concerned.”

I think Hamilton is also mad that his ideas (local option sales tax) weren’t considered.

Orrock, who voted against the less costly earlier version of HB 5018, heard an earful at a rescue squad event last weekend and he decided that a compromise was better than a shutdown. But then maybe he was just in a hurry. “Del. Robert D. “Bobby” Orrock Sr. (R-Spotsylvania) said he’d vote for the tax bill, but only if the vote took place by 5:30 p.m., when he had to leave to deejay a radio show.”

May was also worried about a shutdown. “I voted for it because while I was really opposed to any tax increase, I’m even more opposed to not having a budget,” May said. “It was my belief that we were down to that point.

Frederick? Any speculation as to his reasoning would suggest he could.

Abbitt, Hogan, Landes and Saxman? I haven’t a clue.

Shuler and Weatherholtz, please phone home.

Virginia News

First, as they say on public radio’s Marketplace, we do the numbers on the unprecedented tax bill passed last night:

The highlights here.

*Total new revenues: $1.6 billion over two years.
*State directly collects $979 million.
*Sends an additional $377 million to localities for schools but not mandated
*Pack-a-day smoker pays $63.88 more this year and $100.38 next.
*10 percent excise tax on other tobacco products– money to Virginia Health Care Fund.
*Saves $277 million by capping car-tax.
*Car tax reimbursement to localities frozen at next year’s level.

Norfolk, for example, received 1.8 percent of the state’s car tax payments last year, totaling $15.4 million. That figure would be frozen at about $17 million.

* Seniors earning over $99,000 ineligible for tax deduction, though those already 65 held harmless; deduction remains for those with incomes or $50,000 or less.