Tax issue helped Republicans expand the wave election (too bad Virginia Republicans took it away from Gillespie)

Disaffection with the president was a major driver for Republican success in last night’s election – of that there is no doubt. That said, the extent of success was greatly helped by…wait for it…taxes.

We begin with the epicenter of the tax argument: Kansas. Governor Sam Brownback’s tax reduction were supposed to be his own worst enemy – a political millstone that might not only drag him down, but Senator Pat Roberts, too. Instead, Roberts won going away, and Brownback not only won re-election, but came within 100 votes of an absolute majority (a Libertarian nominee took 4% of the vote). AP (via the Lawrence Journal-World), explains why in their exit poll analysis:

TAX CUTS: Roughly half of the voters said that tax cuts Brownback pushed had mostly helped Kansas, while about two in five said they had hurt.

So the tax cuts broke roughly 10 ten points in Brownback’s favor, contrary to the conventional wisdom…not that this is any surprise to me.

In the rest of the country, the tax issue popped up in referenda. John Hood (NRO – The Corner) has the details:

It’s worth noting also that conservatives won all of the nation’s big fiscal-policy referenda this year, beating a gas-tax hike in Massachusetts and business-tax hike in Nevada, while winning tax limitations in Tennessee, Georgia, and Wisconsin.

Note the states listed: Massachusetts also elected a Republican Governor. In Georgia, both Republicans (Purdue for Senate and Governor Deal for re-election) managed to avoid runoff and win outright (yet another “surprise” for the chattering classes). Finally, of course, Wisconsin re-elected Governor Scott Walker with unexpected ease.

Finally, there is Maryland, where I must spend two nights a week for work. As such, I saw every add Lieutenant Governor Anthony Brown (D) put up in his race to succeed his previous running mate, Governor Martin O’Malley. Brown’s ads ran the gamut of positive and negative, hard-hitting issue ads and soft-touch personal ones. By contrast, I only saw one ad for Republican Larry Hogan – an ad that tried to squeeze in all of O’Malley’s tax increases in 30 seconds (practically one per second), along with a promise to give taxpayers a rest if he (Hogan) won.

In fact, Hogan did win.

Similarly, Illinois Governor Pat Quinn used major tax increases to keep his state government afloat. Despite being in the president’s home state, Quinn lost to Republican Bruce Rauner last night.

Again, anger and disaffection with the president was the big driver here, but voters especially rewarded Republicans where they could also take advantage of the tax issue…

…which makes one wonder what could have happened in Virginia had Republican Ed Gillespie not had the headwinds of tax-hiking Republican Bob McDonnell to face.

I’m just sayin’.

Cross-posted to the right-wing liberal

Bob McDonnell was a WHAT?!?!

Reactions to the Bob McDonnell verdict our pouring in, and there’s one in particular (from many of his defenders) that I find completely flabbergasting.

The ex-Governor’s defenders are calling him a “man of integrity.” My jaw hits the table each time I see that.

Folks, Bob McDonnell spent all of 2009 insisting he would not raise taxes. He blasted his opponent (Creigh Deeds) for even considering it, and rode the issue to a landslide win in November of that year.

In the last year of his term (as it happens, last year) he broke that promise in spectacular fashion, ramming through the largest tax increase in at least 40 years.

Even then, he skirted the truth. He insisted the tax hike was for relieving commuter congestion, but in fact his top priority was actually a parallel road to US 460 that wasn’t needed for traffic relief – and which the Army Corps of Engineers said he couldn’t build anyway (Bacon’s Rebellion).

So please, spare me the “man of integrity” nonsense. If you want to complain about the federal decision to prosecute McDonnell (as opposed to other Virginians) or the bizarre nature of the “honest service fraud” statute, that’s one thing.

But Bob McDonnell was no angel.

Cross-posted from the right-wing liberal

Dear Virginia Senate Republican Majority: Don’t mess it up again with another tax hike

With Ben Chafin’s election, it is now official. After seven months, the Republicans have a majority in the Virginia Senate once more. As one would expect, a number of my friends are crowing.

Unfortunately for me, recent political history is screaming in my ears. It makes my optimism about a fully Republican-controlled Virginia legislature extremely cautious.

For those unaware, the Republican Party first had a State Senate “majority” in 1998 (although the 21st vote was actually the Lieutenant Governor); they held it for ten years. This is the record of that decade…

  • Holding up budget amendments in an attempt to reverse the progress of the Gilmore car-tax cut (2001)
  • A referendum in Hampton Roads and Northern Virginia for tax increases (2002 – thankfully rejected by the voters)
  • A proposed tax increase that was twice what Mark Warner wanted (2004)
  • A proposed gas tax increase (2006)
  • A proposed statewide tax increase in response to the HB3202 debacle (2007)
  • Enacting HB3202 anyway (2007)

Somehow, the party was shocked – shocked! - when voters showed them the door and returned the State Senate to the Democrats in November 2007 (on a night when those without a tax-stained record did quite well, thank you very much).

Four years later, after Governor Bob McDonnell won a landslide victory by promising not to raise taxes, the GOP managed another 20-20 split. Once again, the Lieutenant Governor give them control…and within a fifteen months, the Republican-controlled State Senate passed a McDonnell-proposed tax hike (known in this corner as Plan ’13 From Outer Space). The nominee to replace McDonnell – Ken Cuccinelli – tried to defend and oppose it at the same time.

Somehow, the party was shocked – shocked! - when voters showed the 2013 GOP ticket the door, which also put the State Senate back into the hands of the Democrats in January.

Now, Republicans have the 21st vote once more.

I sincerely hope that the party has learned its lesson…and not f*ck it up with yet another tax hike that reminds the voters why they took power away from them, repeatedly.

Cross-posted to the right-wing liberal

Progressive Jihad: Memo #42

From: Office of Truth And Justice
To: Our Dear Leader

MEMO # 42: Resistance Cell – “Sons Of Liberty”

The following message was intercepted by the resistance.  These reactionaries go by the name: “The Son’s of Liberty”  Among their racist, misogynistic and homophobic beliefs is that men should be judged by the content of their character, and not their skin color, income level, religious belief or sexual orientation.

We plan to deploy the response in our standard propaganda organs (NYT, ABC, CBS, John McCain etc.) No one will believe the following to be anything other than a farce.

Forward!
VJ

From: Office of the High Priest
Church of Pain and Oppression
1600 Pennsylvania Av.
Washington, D.C.

To : Elders in the Congress and Courts

Subject: Allegiance to the Faith

My brothers and sisters in Despotic Progressivism . . . when confronted with an uncomfortable fact, lie about it. When confronted about the lie, lie about that also. If your antagonist persists, stonewall . . . then change the subject . . . roll out the racist, traitor, hate, capitalist pig, or 1-percenter cards. Maintain control of the narrative!

If all else fails summon the deacons of our order. Call forth the DOE, IRS, DEA, DOT, DHS, TSA, ATF, EPA, DHHS, SEIU . . . whoever . . . send a swat team in an up-armored Hum-V for a house call. Arrest the blasphemer for illegally ‘draining a wetland’ in their back yard, ‘failure to report garage sale income’ or ‘throwing a CFL lamp into the non-hazardous trash’ . . . it doesn’t matter.

The Doctrine of Limitless Transgressions is forever expanding. There are countless violations-of-convenience for which you may detain and discredit any blasphemer. We have thousands of perfectly legal opportunities to deal harshly with the enemies of the One True Faith. When an urgent need for new law is identified, notify my office immediately. Holy Writ appropriate to the circumstance will be crafted in a matter of hours. Until new law is in place, you can hold the blasphemer as a material witness.

To: My loyal deacons in the field.

Fear not. Your honor-less Congress, White House, courts and fellow bureaucrats-in-tyranny are consecrated. I have decreed, “Yea verily, ye can do no wrong. Go forth in confidence and with vigor for you have the blessings of your imperial president, force of law and a train-load of ammunition on your side.

Your humble servant in Alinsky,

B. Obama

The Virginia Medicaid battle is suspended, but not over

Based on the Richmond Times-Dispatch report, a budget deal is in sight (via Bull Elephant):

The Senate will convene Thursday to enact a two-year state budget that will have about $700 million less in new spending than when the General Assembly adjourned its regular session March 8 without approving a budget because of a bitter political battle over expanding health insurance coverage.

To hear Medicaid expansion backers tell it, everybody was willing to pass a “clean” budget, and came to that conclusion just last week. Never mind the whole Puckett resignation fracas. Take that as you will.

However, the battle over Medicaid expansion is not over. It will likely continue to be fought in the General Assembly (either in this special session or a new special session), and lest anyone forget, Medicaid expansion still has the support of 22 senators.

In other words, we need to continue to make the argument that Medicaid expansion is bad for the state, bad for taxpayers, and terrible for its would-be beneficiaries.

House Speaker Bill Howell et al have done decent work keeping this nonsense at bay so far. They deserve our thanks, but we also deserve, and expect, that they keep up the fight.

Cross-posted to the right-wing liberal

State Senator Phil Puckett resigns; deck chairs on Titanic to be re-arranged

Richmond is all agog over the resignation of State Senate Phil Puckett (Richmond Times-Dispatch), which grants the Republicans a temporary majority in the State Senate, pending a special election which the Republicans are favored to win. According to the RTD, Puckett’s resignation paves the way for his daughter to be elected to a judgeship, while he himself could land on the Virginia Tobacco Indemnification and Community Revitalization Commission.

All eyes (in Richmond) went immediately to the budget, where according to the Constitution (emphasis added):

No bill which creates or establishes a new office, or which creates, continues, or revives a debt or charge, or which makes, continues, or revives any appropriation of public or trust money or property, or which releases, discharges, or commutes any claim or demand of the Commonwealth, or which imposes, continues, or revives a tax, shall be passed except by the affirmative vote of a majority of all the members elected to each house, the name of each member voting and how he voted to be recorded in the journal.

Normally, that means 21 out of 40. Given that we only have 39 at the moment, 20 should actually work…for the State Senate to pass the budget until the special election. In the grand scheme of things, though, there is a lot less than meets the eye. Here’s why.

First, not every Republican State Senator supported the Republican budget: Walter Stosch (Dave Brat’s patron), John Watkins, and Emmett Hanger all voted with the Democrats to add Medicaid expansion to the budget. In theory, party unity could convince them to change their minds, but there’s no guarantee of that.

Second, there is still the Governor: If one wanted to hand Terry McAuliffe the perfect excuse for a budget veto, coaxing a Senator’s resignation with the promise of appointments for himself and his daughter would be it. I’ll admit, a veto is unlikely, but this deal is excellent ammunition for Election Day 2014, 2015, and 2017.

Speaking of…

Third, even if the GOP wins the budget battle, the fight of Medicaid will go on, and this will make it harder to win: According to Christopher Newport University (poll), the Republicans were actually winning the debate on Medicaid expansion. That might, and probably will, change if T-Mac can now claim perfidy from the opposition. This allows Terry McAuliffe – Terry F–king McAuliffe - to run as Mr. Clean, and the Democrats to present themselves as the Clean Team in 2015 and 2017.

Odds are this will even damage our recent nominee for U.S. Senate – Ed Gillespie, the consummate Virginia Republican insider.

We may even see the Republicans cave on Medicaid expansion just to neutralize the issue in 2015.

Fourth, the State Senate is the poisoned chalice of recent times. Let’s say the GOP does win the special election and holds all 21 seats next year, which I’ll admit is still likely despite the above (or because of the previous sentence). Let’s take a look at the fate of the party controlling the state senate after the last six midterm elections (1991, 1995, 1999, 2003, 2007, 2011). In all six cases, the party lost the ensuing gubernatorial election. In five of them, they lost House seats and a majority of the statewide races. In three, they lost all statewide races, and in two they lost the senate itself.

Now, one could say even that might be worth it if a Republican Senate would mean greater momentum for limited government, but that just isn’t so…

Every Republican-controlled State Senate in the 21st Century has enacted a tax increase: That’s right; there was the referendum of 2002 (defeated by the voters), the Warner tax hike of 2004 (which, at $1.5 billion, was only half what the State Senate originally wanted), HB3202 (largely overturned by the courts), and Plan ’13 From Outer Space. If anything, it has been minority status that forces Republicans to behave.

Given all of the above, I can’t help thinking that this victory is meager, if not pyrrhic.

Cross-posted to the right-wing liberal

Four 2013 GOP LG Candidates Co-Write Op-Ed Supporting Federal Tax Reform

Well, here is something you don’t see every day. Four of the Republican candidates for Lt. Governor in 2013 (including its nominee), wrote an op-ed published in Washington, D.C.’s “The Hill” newspaper in support of of federal tax reform. Former Chairwoman of the Stafford County Board of Supervisors Susan Stimpson, Virginia State Senator Steve Martin, Prince William County Board of Supervisors Chairman Corey Stewart, and 2013 GOP LG nominee Bishop E. W. Jackson joined together to write this piece advocating for reform as a much needed pro-economic growth, pro-business measure.

A key part of their argument includes:

The poor and unemployed need help, but they do not need to be made dependents of government.  They need a bustling economy in which jobs and wealth are being created not stifled. Government needs to make it easier for businesses on Main Street to grow and thrive and create the jobs desperately needed by those who can’t find the employment necessary to meet their financial obligations.  

But growth cannot happen without substantive tax reform that fixes the budget, restores fiscal sanity and stops punishing job creation and productivity. It is up to Congress to create a pro-business environment because this administration is never going to do it.

Congress must reduce and simplify taxes and give U.S. companies the certainty they need to grow the economy.  

Tax reform is something that we hold dear here at Virtucon (coming from the Jack Kemp-Steve Forbes-Paul Ryan wing of the Republican Party) and we are glad that these four leaders have chosen to join together and make their important voices heard on this matter.

Irony – Bush 41 Gets JFK Profile In Courage Award For RAISING Taxes

Fmr. President George H.W. Bush (a.k.a. “41”) was honored with the John F. Kennedy Profile In Courage award yesterday for raising taxes as part of the 1990 budget deal. Why they decided to honor him nearly 24 years after the fact is a mystery to me.

What is truly ironic, however, is that one of JFK’s greatest successes in his short presidency was his tax cuts for businesses (1962) and for individuals (1964 shortly after his assassination.) Kennedy’s tax cuts resulted in federal tax receipts increasing by 55% in real terms in the seven years after he came to office in 1961.

A real profile in courage would have been had President Bush stood his ground and forced Congress to get spending under control in order to lower the deficit, not raising their credit card spending limit.

PWC Passes Massive Tax Hike

The Prince William County Board of Supervisors last night passed a 4.5% tax hike for FY ’15 and a massive 22.5% tax increase over 5 years. When was the last time you got a 4.5% raise?

Here’s how they voted on the tax hike:

Yeas: Stewart, Caddigan, Nohe, Principi, Covington, and Jenkins.

Nays: Candland and May.

Sad thing – Republicans allegedly have a 6-2 majority on the Board, yet 4 of those 6 voted with the two Democrats for this insane tax hike.

Once again, we have a failure to prioritize spending, a failure to grow our commercial tax base (especially when you separate out apartment complexes which are deemed commercial and not residential, yet consume residential services), and a failure of basic oversight. Enough is enough.

Woodbridge Supervisor Frank Principi (D) said during the meeting to Board Chairman Corey Stewart (R):

“As I said to you the other day, you’re looking more and more like a Democrat every day. I appreciate it.”

I would suggest that those four Republicans-of-convenience apply for membership in the Prince William County Democratic Committee, but I’m not sure that Democratic Committee Chairman Harry Wiggins (who is actually a reasonable and amiable person) would want them.

You can bank on Principi’s quote being used in campaign ads and mailings against Stewart next year should he choose to seek reelection and pursue the Republican nomination.

(Hat tip to The Sheriff of Nottinghamd in Prince William County for the graphic.)

GUEST POST: Stafford Co. Rises As PWC Falls In Rank Of Wealthiest Counties

The following is a GUEST POST from an anonymous fellow Prince William County resident:

According to “Forbes” as cited on WTOP today, Falls Church, Fairfax, Loudoun and Stafford all rank ahead of Prince William County in terms of wealth now.  All are ahead of PWC, which was in the national top ten list of wealthiest counties as late as 2012 but has now dropped out.  Stafford County, located geographically to our south and farther from Washington, DC, has magnified its lead over Prince William County.  The only conclusion is that successful people are now eschewing PWC and leapfrogging us to buy homes in Stafford.  Also, Stafford has had far better results in attracting good businesses and good-paying jobs than PWC has had.  This represents an abysmal economic failure on the part of our Board of Supervisors and County Government, and is one clear result of rubber-stamp approval of all of the high-density townhouse and lower-end single-family developments in PWC.  The facts contradict the political spin County residents hear every quarter from Peacor and crew about the imagined economic successes our County has been enjoying.

This deterioration in our economic base will have profound implications for PWC’s ability to fund schools, police, roads, and everything else the public needs.  As we continue to expand our tax base of tax-negative residential units, taxes on existing property owners will need to increase even faster just to maintain the level of services we have now.  This impact will be even more pronounced, with the associated negative results for us, because of the Board’s failure to get even minimal proffers from developers.  With higher value homes and their owners now leapfrogging PWC for Stafford, Stafford County taxpayers will enjoy higher standards of living as PWC residents see a continued deterioration of their standard of living as their taxes rise.

PWC Schools Using Taxpayer Money To Lobby For Higher Taxes

Notice anything unusual about these websites?

Screen Shot 2014-03-31 at 6.41.02 PM

Screen Shot 2014-03-31 at 6.41.51 PM

Go to any Prince William County school website and you will see the same message repeated at the top of EVERY SINGLE PAGE on the website about the county budget.

Click on the “Read more” link and you’ll be brought to a page on the school administration’s main website that includes the following:

Availability of revenue required to pay for the plan was projected based on the tax rate “advertised” by the BOCS back in February. The advertised rate is the highest taxing level the BOCS can adopt. Projected revenue from that rate helped close a gap in the Superintendent’s original budget proposal, but supervisors could still cut the tax rate—and resulting school funding—when they are expected to adopt a final tax level on April 29.Sizeable turnouts by parents, students, teachers, and other PWCS employees, highlighted the importance of the school funding decision at recent BOCS meetings. It reinforced the reality that reductions in the advertised tax rate would force significant cuts to the newly adopted PWCS budget (which also depends on not-yet-finalized state funding levels).

Interested individuals can monitor and weigh-in on budget developments:

  • April 1, 7:30 p.m. – School Board presents PWCS budget to the BOCS;
  • April 8, 2 p.m. BOCS budget recap;
  • April 8, 7:30 p.m. BOCS public hearing on budget;
  • April 22, 2 p.m. and 7:30 p.m. BOCS budget markup;
  • April 29, 7:30 p.m. BOCS adopts final county budget on which PWCS funding depends.

All sessions take place at the county’s McCoart Administration Building. Several School Board members will attend the April 1 meeting.

They are not simply trying to “educate” the public on why they need to press for more money for schools. It would be one thing if they were looking to reprioritize the overall county budget or its own budget in order to place an emphasis on reducing class sizes and increasing teacher pay, but they are not. Clearly, the school administration is advocating raising county property taxes given their emphasis on the tax rate.

This is a classic example of a public entity using taxpayer money to lobby for . . . more taxpayer money. At the federal level, it is generally illegal for recipients of grants to use those taxpayer funds to lobby for additional money. In fact, if it can be shown that any portion of federal grant money to the county schools was used in support of this effort, it could possibly violate any number of federal anti-lobbying statutes and bring about a Department of Education Inspector General’s investigation. At the state / local level, we get into the very grey aspects of Virginia’s loose ethics laws.

Contrast this with one of Prince William County’s neighboring counties where there is a strict policy that school equipment is to be used for official school business only (and this does not include contacting their school board or Board of Supervisors about the budget.) One principal in that county has gone so far as to threaten action if any of his teachers uses school equipment to lobby the school board or Board of Supervisors. That same county recently sent out an email from its central office to PTAs who have access to their computer systems informing them that they are not allowed to use school equipment to advocate that parents come out to school board or Board of Supervisors meetings. Meanwhile in PWC, you have the central office using the entire county school system’s computer network in a lobbying campaign for higher taxes.

As the husband of a teacher in the county, my family is all for reducing class sizes and increasing teacher pay. However, there is something unseemly about the way they are going about it using taxpayer funded resources to mount this lobbying effort to raise taxes. (How about redirecting some of those resources to reducing class sizes and increasing teacher pay?) If I wanted a government that operated like this, I would never have left New York State all those years ago.

UPDATE: I have just received information from an inside source that the letter posted at the above link was sent out to every county school employee via email yesterday by the school administration. Unbelievable.

UPDATE 2: Here are some questions raised by a budget cruncher I know who has examined the school budget. Why do we have 61 vacant positions at the elementary level, 51 middle school, 61 high school and 35 special ed? And why are they showing that in FY ’14 they will save $10,429,427 by hiring less experienced teachers at lower salaries than what they were paying teachers who retired or moved, but they’re not spending that money on increasing teacher salaries or reducing class sizes. Something stinks here…

 

IMF Introduces Ukraine to Faux-sterity

No matter what the situation, no matter how bad the problem, no matter how catastrophic the state of affairs, a nation can always count on the International Monetary Fund to make things worse.

This week, Ukraine is about to learn that painful lesson.

The IMF is sending $18 billion to the new Ukraine government, but like everything else the IMF does, it’s merely a loan, and it comes with crushing conditions that will damage the already-flattened economy there even more.

Among the faux-sterity demands on the IMF….

An income tax hike from 17% to 25%: yet another reminder that “supply-side” is still foreign to the IMF (The Hindu)…

An increase in consumption taxes: showing that at least the IMF is consistent – they don’t understand Keynesian economics either (Wall Street Journal).

A reduction in gas subsidies (which is good), but not a privatization of the Naftogaz gas firm (which is bad): When you manage to make the governor of Yanukovic’s home province (Donetsk) sound like Mr. Clean, you’re doing it wrong (WSJ again).

Some (perhaps) reduction in the government bureaucracy: although it’s hard to tell just how many. CNN says 24,000. Russia Today says 80,000, but limited to the “law enforcement” sector only – leaving aside than anything out of RT should be taken with a lotswife of salt. Either way, at least the IMF learned not to try the government-pay-cuts that kept Greece’s government just as large in size and scope while pretending to cut its cost.

Still, overall, this is a painfully unnecessary set of “reforms,” which will badly miss revenue targets and likely put Ukraine in a far deeper economic contraction than the current projection of 3%.

Meanwhile, the Russian creditors get full return, despite propping up the Yanukovic regime that put Ukraine on its back in the first place (Telegraph).

So Ukraine will follow Greece and Spain over the economic cliff…

…while Putin and his cronies laugh all the way to the bank.

Cross-posted to the right-wing liberal

Setting the Record Straight on PWC Property Taxes

There has been quite the debate lately over the issue of property taxes in Prince William County as discussions on the FY ’15 budget heat up, mostly because people are comparing apples and oranges – tax rates vs. assessed values, etc. There are a variety of factors to consider, so that’s why I found the calculations done on tax-rates.org to be so informative.

This site actually plugs median home values for each county into that county’s tax rate in order to arrive at the median property tax paid by homeowners. From there it ranks where the county stands nationally in terms of not only that, but also in terms of percentage of property value and percentage of income.

The results from this are:

The median property tax in Prince William County, Virginia is $3,402 per year for a home worth the median value of $377,700. Prince William County collects, on average, 0.9% of a property’s assessed fair market value as property tax.

Prince William County has one of the highest median property taxes in the United States, and is ranked 120th of the 3143 counties in order of median property taxes.

The average yearly property tax paid by Prince William County residents amounts to about 3.2% of their yearly income . Prince William County is ranked 500th of the 3143 counties for property taxes as a percentage of median income.

Let’s look at how PWC ranks in relation to its neighboring counties on these various aspects. When you’re just looking at the median tax bill, things don’t look so bad.

 County / City Median Property Tax
Falls Church City $6,005 ± $222 (20th of 3143)
Loudoun County $4,976 ± $54 (33rd of 3143)
Arlington County $4,564 ± $63 (40th of 3143)
Fairfax County $4,543 ± $28 (41st of 3143)
Alexandria City $4,061 ± $115 (64th of 3143)
Fairfax City $3,646 ± $109 (96th of 3143)
Prince William County $3,402 ± $38 (120th of 3143)
Stafford County $2,477 ± $37 (284th of 3143)
Virginia $1,862 (21st of 50)

Although PWC has one of the highest tax rates in the state, its median tax bill is on the low-end for Northern Virginia because home values in the county are so low (and that’s not a good thing for a variety of reasons including the fact the median home value is tax negative and does not pay for all the county services that it consumes.)

However, the narrative of being a low-tax county starts to fall apart and the gap begins to close when you start looking at the amount of taxes paid as a percentage of household income.

 County / City As Percentage Of Income
Falls Church City 4.23 ± 0.27% (181st of 3143)
Loudoun County 3.88 ± 0.06% (260th of 3143)
Fairfax County 3.6 ± 0.04% (343rd of 3143)
Arlington County 3.55 ± 0.11% (360th of 3143)
Alexandria City 3.44 ± 0.13% (399th of 3143)
Fairfax City 3.24 ± 0.17% (480th of 3143)
Prince William County 3.2 ± 0.07% (500th of 3143)
Virginia 2.53% (29th of 50)
Stafford County 2.37 ± 0.07% (1085th of 3143)

Finally, here is the real kick in the head to PWC homeowners – the percentage of property value that we pay in taxes.

 County / City As Percentage Of Property Value
Loudoun County 1.01 ± 0.02% (1129th of 3143)
Falls Church City 0.94 ± 0.05% (1241st of 3143)
Prince William County 0.9 ± 0.01% (1302nd of 3143)
Fairfax County 0.89 ± 0.01% (1317th of 3143)
Alexandria City 0.83 ± 0.03% (1435th of 3143)
Arlington County 0.8 ± 0.02% (1524th of 3143)
Fairfax City 0.75 ± 0.03% (1647th of 3143)
Virginia 0.74% (34th of 50)
Stafford County 0.7 ± 0.01% (1786th of 3143)

This last method is truly the most accurate way to compare property taxes since it takes into account the biggest variable in the equation, that of assessed home values. When looking at property taxes through this lens, PWC’s property tax is higher than Fairfax County, the City of Alexandria, Arlington County and the City of Fairfax. It is barely behind the City of Falls Church (and even that is somewhat questionable since PWC separates out special assessments for fire, gypsy moth eradication, etc. which other counties include in their tax rate.)

So, as the debate rages on about spending priorities and tax rates, keep all this in mind as our elected officials attempt to jack up our property taxes by another 5.5% for FY ’15.

Impeaching Mark Herring is a terrible idea

“I’ve never seen anything as brutally clear as this…an odd, set, stony quality to it, as if tomorrow’s already happening and there’s nothing you can do about it. The way you feel before an ill-considered attack – knowing it’ll fail. But you cannot stop it.”

- General John Buford (acted by Sam Elliot), Gettysburg (1993)

Of course, Buford did manage to “stop” his nightmare scenario (the Union Army charging up a hill that could not be taken) by his own actions. I doubt I will be as successful, but I feel I have to try to stop what will be a catastrophic error by the Richmond Republicans: the impeachment of Mark Herring.

Plans to impeach Herring are already afoot. My friend Shaun Kenney has the details. The crime: Herring agreed with plaintiffs suing the state over the 2006 Marriage Amendment. The plaintiffs said it violates the federal constitution, and Herring essentially said the plaintiffs were right. This is apparently a “constitutional crisis.”

I beg to differ. The “crisis” will be within the Republican Party if they actually try to impeach and remove Herring. This is a mistake on multiple levels.

First, there is the matter of constitutions: In case anyone forgot, Herring’s oath is to uphold both the Federal and state constitutions, and the Federal one comes first. You can argue with Herring’s reasoning on whether or not the 2006 amendment violates the Federal Constitution, but he has the power to express his opinion and act on it. To attempt to remove him from office for upholding the Federal constitution (as he sees it) is a much greater danger than anything Herring has done. I would also note that this great concern for the state constitution was appallingly missing back in 2007 when “transportation solutions” were a priority, the result being a dog’s breakfast of legislation that nearly every Republican not named Bob Marshall swore was a great achievement, yet was laughed out of town by a unanimous state Supreme Court. Voters might find the idea that the Constitution is paramount when it can stop same-sex-marriage but irrelevant when it protects their money from the taxman to be…a bit strange (more on that later).

Second, there is the question of Herring’s action: I’m reading some bizarre hair-splitting from some who say that Herring didn’t have to defend the 2006 amendment, but he shouldn’t have opposed it publicly. Why? Based on the rulings from the federal Supreme Court on this matter last year, refusing to defend and openly advocating for the plaintiffs is a distinction without a difference. Does it really matter that Herring is simply open about his agreement with the plaintiffs?

Next up, we have the political implications, which are vast and multi-dimensional. For starters, as I noted above, the RPV’s respect for the state constitution is hardly consistent, and Democrats will gleefully remind voters of that for months and years. Again, voters saw the Richmond Republican crew pass and celebrate a blatantly unconstitutional tax scheme less than a decade ago. They will wonder why the constitution is so important now, and they will conclude that the Republicans care more about stopping gay marriages than keeping taxes low and government limited. That’s the political equivalent of drowning the Commonwealth in blue paint.

Yet there are also ramifications for just this year. Political capital that would otherwise be saved up for stopping Medicaid expansion (Brian Schoeneman explains the financial implications here; he didn’t mention that Medicaid does – at best – nothing to improve the health of the poor, but that would just reinforce the point) or Governor McAuliffe’s budget spending spree will be wasted on an effort doomed to fail (seven Senate Democrats would have to vote to remove Herring from office, and that’s not happening).

Finally, there is the one thing we are all forgetting – the flip side of what Herring has done: I may be the only person to notice this, but there are serious problems with the 1971 Virginia Constitution. Article 10 (on education) specifically discriminates against schools of faith, and could be read to make vouchers illegal in the Commonwealth (a potential violation of freedom of religion). Article 11 (on environmental protection) could be used to ride roughshod over property rights (and the Fifth and Fourteenth federal amendments). Do we really want future Attorneys General to arbitrarily defend an overreaching state government? Or muzzle itself in the face of such overreach? I feel the question answers itself.

For these reasons, impeaching Mark Herring is a terrible idea – one that will damage Virginia, the cause of limited government within Virginia, and the Republican Party of Virginia for years – if not decades.

Cross-posted to the right-wing liberal

When you crunch the numbers, Ryan-Murray is a bad deal

It’s no secret that the Ryan-Murray budget deal (a.k.a., the Bipartisan Budget Act of 2013) is modest. Many think that was the only way such a deal could be struck, and I am sympathetic to that view. However, I have now had the time to look over the numbers – and more importantly, the assumptions behind them – and as a result, I consider it a bad deal.

The top-line numbers seem beneficial, however minimally: $31 billion in increased defense spending over two years, $22 billion in net deficit reduction, and no explicit tax increases.  However, the numbers simply don’t hold up to scrutiny. To understand why, one has to look at the particulars of the deficit reduction in the deal (CBO).

You’ll save how much? You sure about that?

We’ll start with the increase in the airline security fee. I am something of an agnostic on fee increases (if the government is providing services to individual customers, those customers should cover that cost; anything less subsidizes those customers and crowds out private sector competition where applicable). However, fee increase do have price effects: i.e., if you raise the price of air travel, you’ll have fewer air travelers. As this effect never seems to make it to Congressional score-keeping, the deficit reduction figure cited for this ($12.6 billion) is out of date and overestimated the moment it’s published.

A similar malady affects the $731 million estimated for the repeal of cost reimbursement for American-registered ships (if you know someone who makes Liberian flags, invest in the business) and the $2.1 billion for reduction in fees to lenders who “rehabilitate” (CBO’s word) student loans from default (fewer fees means fewer rehabs). All in all, over $15.4 billion in deficit reduction is ripe for economic erosion.

Hide the spending

Next up, we have cuts that aren’t really cuts, such as the $3.1 billion supposedly saved from ending mandatory payments to non-profit student loan servicers. There is only one problem (CBO):

Although this provision would reduce direct spending by an estimated $3.1 billion over the 2014-2023 period, those loans would still need to be serviced. As a result, CBO estimates that implementing this provision would require additional discretionary appropriations of roughly the same magnitude as the mandatory funding that would be eliminated.

In other words, that $3.1 billion still has to be spent, but since it’s being move to appropriations (which is still under the sequester), the deal’s supporters can pretend they made a cut, when all they really did was make  a dodge.

A plan to revamp health benefits for federal employees ($2.8 billion) has the same chicanery, because spending on retirees would fall, but spending for active employees would rise:

The provision would reduce direct spending because the government contribution for health benefits for federal retirees is classified as direct spending. On the other hand, implementing the provision would increase spending subject to appropriation, assuming appropriation of the necessary funds, because the government contribution for health benefits for active federal employees is classified as discretionary spending.

That’s roughly $5.9 billion in phantom “cuts.” Added to the $15.4 billion from problematic assumptions, and we have $21.3 billion in “deficit reduction” that doesn’t stand up to scrutiny.

Unfortunately, it’s even worse than that.

Don’t forget your discount!

One thing those of us in economics know is that a dollar today is more valuable than a dollar in, say, 2023. If you have to borrow that dollar today, you still have ten years of interest payments. In fact, the interest rate is a decent way to compare today’s dollar with 2023’s discounted version; hence the term discount rate.

I could go into a deep discussion about how even a spent dollar you don’t have to borrow is affected by the discount rate (since you can’t lend or invest it). However, since this is the federal government, we know every new dollar spent is borrowed. Even better, the discount rate standard is Treasury notes, which is exactly what the government would use to borrow the money. Thus the justification for discounting future savings makes perfect sense.

The effect of discounting is profound: the $22 billion in nominal deficit reduction plummets to $14 billion in present-value savings. Meanwhile, the questionable deficit reductions and dodges are barely discounted at all, to $19.7 billion. In other words, this deal is a bad one.

Now, you may wonder why the top-line deficit reduction fell so far when the discounting was applied, but the questionable figures didn’t. The reason is that the overall deficit reduction was mainly in the “out years,” where discounting (interest rate compounded) has the greatest effect. The dodges and question marks, by contrast, are mainly “front-loaded” in more immediate years. In other words, the riskiest and shadiest “deficit reduction” pieces are immediate, while the more certain savings are further off in the future, and thus less valuable. As a result, any real reduction in deficits is unlikely in this deal.

But there’s more defense spending! Yeah, about that

What is more likely to win conservatives and Republicans over on this deal is the increase in defense spending vis a vis the sequester. However, even that is far less than meets the eye. The $31 billion in higher defense spending over two years is less than 3% of the biennial overall defense budget. More importantly, the increase ends in 2016, meaning any new Pentagon projects funded by the $31 billion will have a sustainment tail with no money to back it up. If anything, this short-term blip could merely encourage people to make permanent obligations with temporary money.

So, in the end, I would opine that even the temporary increase in defense spending is less than advertised. It certainly isn’t worth a “deficit reduction” that is based on questionable assumptions, parlor games, and a hope that nobody notices interest payments and their effect on the value of money.

At the end of the day, the numbers in this budget deal just don’t hold up.

Cross-posted to the right-wing liberal

Here’s The CNN/Money Ranking PWC Doesn’t Want You To Hear About

Prince William County often likes to tout a CNN/Money ranking that lists it high on job creation (a ranking that doesn’t take into account the quality of the jobs being created, which are mostly in the lower-paying service industry sector.)  Well, here’s another study from the same source that they don’t want you to hear about.

According to a new CNN/Money ranking, PWC has the second highest property taxes in Northern Virginia as a percentage of home price, only behind Loudoun County.

Indeed, Loudoun County has the highest in the Commonwealth (1.09%) followed by Richmond City (1.08%), Roanoke City (1.03%), Newport News City (1.02%), and then Prince William County and Norfolk City (0.97%). PWC’s other neighbors are as follows: Fairfax clocks in at 0.94%, Fauquier at 0.77% and Stafford at 0.75%.

Interesting to note that the bulk of jurisdictions that PWC is in league with here are cities and not counties. Yet, we are now hearing rumblings that this still isn’t enough and that taxes may have to be raised to pay for even more spending.  Perhaps if our commercial-to-residential tax base ratio wasn’t so pathetically screwed up, we wouldn’t find ourselves in this boat.

Ken Cuccinelli was a squish, which brought his ticket-mates down with him. Period. (UPDATED)

We are now over a week past Election Day 2013, and a dangerous revisionism is sweeping across the right in Virginia. I have watched in amazement as Ken Cuccinelli has practically escaped all blame for what is arguably the worst performance by a Republican nominee for Governor since 1985 (using percentage of the total vote as the standard). I’ve seen blame thrown at his ticket-mates (well, one of them anyway), the Republican National Committee, the “establishment”, “RINOs”, Bill Bolling, etc.

However, take a broader view of the election and it becomes clear that Cuccinelli did this to himself and his ticket-mates, with a horrific slew of mistakes on the tax issue. Ken Cuccinelli lost because he was a squish.

I know I am just about the only blogger in the Virginia rightosphere to say that, but let’s be honest. Would any other Republican who spoke with pride about his role in raising taxes – not once, mind you, but twice – get the accolades and pats on the back that Ken is receiving now? To ask the question is to answer it.

Outside of Virginia, most of the high- and medium-profile races were in the northeast. In New Jersey – a state that gave Obama 58% in 2012 – a pro-life, anti-same-sex-marriage Republican Governor ran for re-election, but with a record of lowering taxes. Chris Christie did two points better than Obama. Meanwhile, in Westchester County – a suburb so full of limousine liberals that Obama did better there than he did in Fairfax – Republican County Executive Rob Astorino faced a barrage of negative ads about his social conservative view. However, he also had a record of low taxes, and won re-election easily.

If that’s not enough, consider this. Ken Cuccinelli actually did come closer to victory (2.5%) than Mitt Romney did (3.9%), but in the areas most affected by the tax increases Cuccinelli defended and praised, he lost by a larger margin than Romney’s.

I have seen Republicans in Virginia fall for the same, failed model for a dozen years: social conservatives hoping to win over the center by supporting, defending, or refusing to oppose tax increases. It has been an unfettered disaster, and Ken Cuccinelli was just the latest to make that mistake…bringing down his fellow statewide candidates in the process.

The message from 2013 is crystal clear: Republicans who take pride in raising taxes will lose, period. Folks, Ken Cuccinelli did this to himself.

Cross-posted to the right-wing liberal

UPDATE: I would also note that in Prince William County, long considered the swing county in the state, only one Republican Delegate voted for Plan ’13 From Outer Space; he went on to become the only incumbent GOP delegate in the county to be defeated at the polls.

Election Take-aways

Number of tax increases enacted by Governor Chris Christie during his term: zero

Number of tax increase endorsed by Ken Cuccinelli during his campaign: two

Advantage of Democrats over Republicans in Virginia yesterday: five

Advantage of Democrats over Republicans in New Jersey yesterday: twelve

Cuccinelli’s support for election: 45%

Christie’s support for re-election: 60%

Cross-posted to the right-wing liberal

WHAT?!?!?!?!?!? No, No, No, No, NO!!!!

Advisory: Cuccinelli To Hold Press Conference Call
Springfield, Va. – Ken Cuccinelli today will hold a press conference call to discuss the latest discovery regarding Terry McAuliffe and his troublesome union ties.

WHAT?!?!?!?!?!? No, No, No, No, NO!!!!

During the debate last night, the following was said:

A.G. Ken Cuccinelli:

“Terry McAuliffe literally did nothing for Virginia or Virginians before deciding to run for governor. Nothing. Some people run to do something, and some people run to be something.”

I agree with Ken Cuccinelli about Terry McAuliffe.  But why isn’t Cuccinelli taking his own advice and repeating over and over and over again exactly what it is that he wants to do?  We’ve heard virtually NOTHING about his “Economic Growth & Virginia Jobs Plan” since that was unveiled back in May whereas four years ago Bob McDonnell latched on to jobs and repeated it ad nauseum right through Election Day.

Even two months before Election Day, he had a great opportunity to pick up the ball and run with it on taxes given the news out of North Carolina that they’re working on eliminating their state income tax (something that I had suggested he do four months before then – a full six months before Election Day and even before the RPV Convention.)  Instead, as both campaigns limp towards the finish line on Nov. 5, we get a conference call with the media about McAuliffe and unions?  Seriously?  I don’t care how shocking the revelations may be since McAuliffe being in bed with the unions should be as surprising as the sun rising in the east every morning.

So, to any and all aspiring candidates, PLEASE take Ken Cuccinelli’s advice to “run to do something,” but also be sure to articulate it over and over and over again so voters know exactly what you want to do.  That is how you win…

PWC School Board Sets An Example For Our Supervisors To Follow

Our accolades to the majority of the Prince William County school board who voted to study moving to a zero-based budget process (h/t The Derecho and PWC Education Reform Blog.) Chairman Milt Johns and Board members Lisa Bell, Betty Covington, Steve Keen, Alyson Satterwhite, and Gil Trenum each deserve our thanks.  In light of the looming financial problems facing the Fairfax County school system, these six individuals supporting this move should be commended for their foresight that hopefully will help PWC avoid a similar fate.

If the school board can eventually adopt a zero-based budget with their oversight of nearly 60% of tax revenues collected by the county, then our Board of Supervisors has no legitimate excuse as to why they couldn’t do the same for the other 40%+ of our tax dollars.  It will be interesting to watch how the county’s top governing body responds as this continues to unfold.

Ken Cuccinelli goes squishy again

As Election 2013 comes careening towards November, Ken Cuccinelli continues to transform himself into the biggest Republican disappointment of the campaigns.

In an appalling Loudoun Times-Mirror interview, Cuccinelli tries to take credit for the $1.2-billion-plus tax hike that I have called Plan ’13 From Outer Space:

Attorney general and Republican gubernatorial candidate Ken Cuccinelli last week reiterated his belief that there wouldn’t be the current transportation funding reform law if it weren’t for him.

“There wouldn’t be a transportation bill right now if I didn’t save it as attorney general,” Cuccinelli said during an Oct. 7 interview with the Times-Mirror.

Unreal. Ken Cuccinelli is now boasting about saving a massive tax hike…

…and he wonders why he’s losing.

Cross-posted to the right-wing liberal

Will PWC Property Taxes Skyrocket 15-20% ?

PWC Chairman Corey Stewart was on WMAL radio out of Washington, DC on Tuesday stating that $60 million is needed to address the influx of 2,500 new students into the school system every year that has led to the largest class sizes in the Commonwealth.  Stewart said that this would require a 15-20% increase in residential property taxes, quickly noting that other ways of bridging that $60 million gap should be explored.

There certainly is no need to further burden taxpayers with an additional 15-20% on top of what we already pay in property taxes.

Nearly 60% of all county tax dollars in PWC go directly to the school system under a bizarre “revenue sharing” agreement that is used almost nowhere else in the country.  When it comes to spending our tax dollars, the county school board is more powerful than our Board of County Supervisors.  Our elected officals, whom we elect to supervise our tax dollars (not to supervise us despite what some of them may think), annually abdicate this responsibility for more than half of the money we pay to the county.

The revenue sharing agreement between the BOCS and school system that does nothing but short-change our schools should be abolished.  The BOCS should instead ask the school board to present a budget to them that prioritizes reducing class-sizes and increasing teacher pay.  This will restore true BOCS oversight for the more than half of the county budget that it has turned a blind eye towards.  It will also provide the school board with a tool by which they can cut excess administrative expenses and various spending follies.

If Prince William County were to go to zero-based budgeting and build a new budget from the ground-up that prioritized public safety (police / fire / rescue), education (schools / libraries), infrastructure (roads / water / sewer) and our park system, we could fully fund these core services at the levels they need to be funded at while holding the line on taxes.

Gee, placing priorities on what you spend with limited funds.  Not a foreign concept for most families, but it certainly seems to be one for our county government.