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By Marc, March 11, 2010 11:37 pm

The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) released a report today on the effects of the Senate-Passed Health Bill:

CBO and JCT now estimate that, on balance, the direct (mandatory) spending and revenue effects of enacting H.R. 3590 as passed by the Senate would yield a net reduction in federal deficits of $118 billion over the 2010–2019 period. (Direct spending—as distinguished from discretionary spending—is spending that stems from legislation other than appropriation acts.)  In our earlier estimate, the budgetary impact was a net reduction in deficits of $132 billion.

While there remain some aspects of this bill that I’m not thrilled about, compared to the House bill, this is great news as democrats move forward on passing landmark health care reform legislation. Of course, the hope is that this can be further improved through reconciliation.

Compare this to a “Roadmap to America’s Future” put forward by the GOPs “budget-guy”, Rep. Paul Ryan (R-WI), back in January. The only thing that this is a “Roadmap” to is fiscal disaster. According to a report yesterday by the Center on Budget and Policy Priorities (CBPP), his radical priorities would provide the

largest tax cuts in history for [the] wealthy, [would] raise middle class taxes, [end] guaranteed Medicare, [privatize] Social Security [and erode] health care.

Now that’s change that I can’t believe in! This would have the net opposite effect on health care, compared to the democrat’s plan, and lead to skyrocketing premiums and more uninsured Americans.

Republicans have been hailing this plan, based on a CBO analysis, saying that it would zero out the deficit and actually balance it by 2063. Oh yeah, it would also provide a viable health care alternative to the ones passed by democrats in the House and Senate. The problem is that the analysis was based on assumed revenue projections from Rep. Ryan’s own staff. As CBPP explains:

Assertions that the Ryan plan is fiscally responsible rest on a serious misunderstanding of a Congressional Budget Office (CBO) analysis of the plan. CBO only partially analyzed the Ryan plan. Contrary to some media reports, CBO has not prepared an actual cost estimate of it. CBO generally does not produce estimates of the effects of proposed changes in tax policies; that is the responsibility of the Joint Committee on Taxation. In its analysis of the Ryan plan, CBO did not attempt to measure the revenue losses that Rep. Ryan’s proposals would generate.

The non-partisan Tax Center actually analyzed projected revenues, while the CBO used projected revenue numbers prepared by Ryan’s staff, and paints a starkly different (dire) picture:

[The Tax Policy Center] estimate[s] that the budget deficit under the Ryan plan would reach about 7 percent of GDP and the debt would grow to 90 percent of GDP by 2020. TPC estimates that revenues under the Ryan plan would average 16.3 percent of GDP over the period from 2011 through 2020.

In contrast, following the specifications provided by Rep. Ryan’s staff, the CBO analysis assumed that revenues over the same period would average 18.4 percent of GDP. That difference amounts to a loss of almost $4 trillion in revenues over the next decade. As a result of these lower revenues, federal interest costs would also be much higher than those shown in the CBO analysis.

Extrapolating TPC’s revenue estimates beyond 2020 shows that the Ryan plan would fail to stem the rising tide of debt for years to come. The debt would continue to grow in relation to the size of the economy for at least 40 more years — reaching over 175 percent of GDP by 2050. (See Figure 1.) Even by 2080, the debt would still equal about 100 percent of GDP.

All I can say is WOW! The implications of this explosion in debt are profound and should scare the heck out of all Americans.  The CBPP concludes that the “Roadmap” would “leave the federal budget in dire straits for decades” and push the federal debt to “unsustainable levels far in excess of 100 percent of GDP.” Given Ryan’s status as “rising star” within the GOP, one can only imagine the implications of a return of the GOP to majority status – oh, the nightmares.

Shifting gears back to the heath care reform aspects of this “Roadmap,” compared to both the Senate and House-passed bills, this “Roadmap” not only leads to fiscal ruin, but also destroys our health care system by increasing health care costs and leading to more Americans without coverage. As the CBPP notes,

the Ryan proposal thus would sharply reduce or eliminate all major forms of health insurance that spread risk by pooling healthy and less-healthy people together on a large scale. It would do so without taking significant action to create viable new pooling arrangements. Most Americans — including the poor and the elderly — would largely be left to purchase insurance on their own with a voucher or tax credit in an insurance market that would remain largely unreformed. In particular, insurance companies could continue to charge people much higher premiums based on age, gender, or health status.

No thanks! The “Roadmap” actually looks to expand high-risk pools to drive down costs. Clearly, pooling folks who are in poor health with others who are in poor health is more effective.

So compared to the democratic plan, this “Roadmap” actually erodes our health care system and has the added benefit of ballooning deficits. Genius!

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By Marc, March 9, 2010 8:46 pm

As we approach the first set of caucuses in Virginia’s First Congressional District, to determine the democratic nominee, Krystal Ball continues to rack up key endorsements. Today’s press release:

FREDERICKSBURG, VA. – As the nominating process to select the Democratic candidate for Virginia’s first Congressional District kicks off, key Democratic constituency groups are making it known who they think will be best prepared to take on Rob Wittman in November’s election.

Today, Krystal Ball for Congress has announced the support of three additional organizations: AFSCME, the Farm Team, and the Progressive Change Campaign Committee (PCCC).

Adam Green of the Progressive Change Campaign Committee (PCCC) said, “We are very impressed by Krystal, her positions, her willingness to fight, and the Krystal Ball campaign operation.”

“I’ve been so impressed with the Progressive Change Campaign Committee’s commitment to issues that are important to Democrats, especially their support of a strong public option,” said Ball. “Their support, along with that of AFSCME and the Farm Team, give us a sense of momentum going into this nominating process.”

AFSCME is the largest public employee and health care workers union in the United States.

The Farm Team (via their website) added the following about their endorsement of Krystal:

Not only does she represent “a fresh face” but believes passionately on changing the way business is done in Washington. She will work to get beyond partisanship and for the best interest of Virginians to keep our state the best place to run a business and raise a family.

Krystal continues to build up momentum in the race for the democratic nomination in Virginia’s First Congressional District. As we’ve said before, she is clearly the best candidate to take on Rob Wittman come November.

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By Marc, March 8, 2010 7:20 pm

Last week Forbes released a list of the top 25 richest counties in the nation. Stafford County was ranked as the 12^th richest county in the nation, with the median household income at $89,536.00 and the percentage of residents 25 or older with Bachelor’s Degree or Higher at 36%.

An extremely good measure of how much a county actually invests in education is how much they spend per student (per pupil). What you will find is startling. How can the 12^th richest county in the entire nation rank near the bottom of Virginia and the nation in per pupil spending? To put that in further context, Virginia is ranked only 37^th in the nation in per pupil spending. So, we rank at the bottom of a state that ranks only 37^th in the nation in per pupil spending. This would be almost laughable, if it wasn’t so sad.

According to the latest available data from the National Center for Education and Statistics (NCES, 2006-2007), Stafford County spends $8,900 per pupil. That ranks them 86^th (out of the 132 districts that NCES had data for) in Virginia for per pupil spending. Stafford County, the 12^th richest county in the nation, ranks 87^th in Virginia in per pupil spending. Again, Virginia ranks in the bottom of the nation in per pupil spending and Stafford County ranks in the bottom of Virginia for per pupil spending. If you don’t see anything wrong with this, you should!

Based on per pupil spending, it should also be no wonder that Stafford County’s average teacher’s salary (per the Stafford Superintendent’s FY’11 Budget) is below the state and national averages. An average teacher in Stafford County makes $51,341. This is $808 below the state average and $4,734 below the national average. That’s right, a teacher in the 12^th richest county in the nation makes 10 percent less than the national average.

What our elected officials fail to realize is that investing in education is one of the best investments that you can make. This is further evidenced by Bill Howell’s (R-28^th) recent attempt to mislead constituents on the subject.

Last week the Republican majority on the Board of Supervisors, including Howell disciple Supervisor Susan Stimpson (R-Falmouth), made things even worse for Stafford County schools in FY’11 by failing to appropriate $3.6 million in debt service savings to them that that they planned on using to offset the $26 million deficit (soon to be more thanks to Howell) they are facing. Combine this with the fact that the Republicans on the Board of Supervisors voted to repeal BPOL and covered it in the FY’10 budget by spending part of a school surplus, impacting our schools negatively to the tune of $7.4 million, it should be no surprise to folks that our local and statewide elected officials don’t have their priorities straight.

The 12^th richest county in the nation currently has 53 percent of our schools failing to meet Annual Yearly Progress requirements. Enough is enough already. We need leaders who understand the clear correlation between future economic growth and well-educated children. Howell and his Republican counterparts on the Stafford County Board of Supervisors are out of touch with reality.

The 12^th richest county shouldn’t be in a race to the bottom in our schools, but a race to the top!

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By Marc, March 8, 2010 7:08 pm

As the Survivor song goes, “The search is over, you were with me all the while.”  After a long (well, very long) search, it turns out that Democratic Party of Virginia’s new Executor Director is their now former Finance Director David Mills.

From the DPVA:

Like our big announcement for JJ last week, I wanted to let you know that our search for a new Executive Director is over before we send out the press release. David Mills has been named the new ED for DPVA. Dave was our Finance Director and has also worked raising money for Brian Moran’s campaign for Governor as well as for Creigh Deeds for Governor. I am very excited to continue to work with David as we build our party stronger…

Thanks for all you do,

Don

Blue Virginia predicted this one last week. Congratulations to Dave on his new position. We expect BIG things!

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By Marc, March 6, 2010 10:33 pm

Here is the letter a teacher received in the mail from Speaker Bill Howell (R-28^th) yesterday:

There are so many things wrong with this letter; I don’t even know where to begin. Howell couldn’t be more dishonest and misleading – I’ve come to expect nothing less from him.

He justifies the House’s cuts to K-12 education by claiming that

prior to last year, state funding for public education was largely protected…

This is simply not true. Gov. McDonnell (R-VA), like Howell, has also tried to justify cuts to K-12 education by falsely asserting that these sorts of cuts have been largely “spared” in recent years. Again, not true. Cuts in Direct Aid have already led to a 15 percent reduction in K-12 funding in just the last 2 years.

How Howell can claim that the “net impact [of the House’s cuts] would result in [only] a decrease of $80 million (statewide) for K-12 education over the biennium,” is dubious, if not an outright distortion of the facts, at best?! The House has actually proposed $863.6 million in cuts to Direct Aid for FY’11-12, compared to the level of Direct Aid funding for FY’08-09. Consequentially, this will lead to 24, 225.3 K-12 jobs lost. Let us not forget that the cuts present in the FY’10 budget resulted in the elimination of state funding for 8,758 positions. That’s nearly 33,000 jobs lost; or a nearly 19 percent reduction in force for Virginia schools, based on the 2007-2008 Annual Superintendent’s Report that reported a total of 177,017 support and instructional positions statewide.

Howell actually goes on to say that

by lifting expensive state mandates, instituting structural reforms to VRS and giving local school divisions greater flexibility in state funding for education for Stafford County (an additional $3.5 million) and the City of Fredericksburg (an additional $597,000) as compared to the initial budget bill proposed in December by former Governor Kaine.

By state mandates, Howell is referring to the Standards of Quality (SOQ). The SOQ defines the basic standards of a minimum quality education in Virginia. These minimum standards define the minimum number of personnel (e.g. teachers to students, principals to students) required to meet the SOQ. Many of the more affluent school districts greatly exceed these minimum standards, while many of the poorer school districts simply meet these minimum standards. Virginia is ranked 37^th in the nation in per pupil spending, actually trailing the national average by $1,238. These “state mandates” are hardly expensive, comparatively speaking to what 36 other states are paying and the fact that we are well below the national average.

So Howell and his Republican allies in the House plan on lowering the minimum standards to save money and put our children at even a further disadvantage. This will inevitably mean larger class sizes.  If that isn’t bad enough, the House also plans on rolling back the rates, to FY 2008 levels, that the state will pay out to the localities in order to meet their share of these minimum staffing standards.

As I discussed in an earlier post, the Local Composite Index (LCI) determines the state and local shares of funding a minimum education in Virginia. Anything above these minimums are paid for entirely by the localities. I also mentioned that Gov. McDonnell planned on cutting the SOQ staffing requirements (leading to larger class sizes) to reduce the required amount of funds provided to the localities by the state to meet these new lower minimum requirements.

The additional state funds that Howell quotes for Stafford and Fredericksburg are as a result of re-benchmarking the LCI, which is done on an annual basis to reflect the local economic climate. Howell seems to imply that this is in some way related to “lifting expensive mandates [and] instituting structural reforms to VRS.” This couldn’t be further from the truth. In fact, because of the watering down of the minimum educational standards contained with the SOQ, Stafford and Fredericksburg will be receiving less money – not more (see Table 1). This actually exacerbates the funding cliff that exists for Stafford and Fredericksburg in FY’12.

While utter panic and fear set in, fear not, Howell and the Republicans have a plan (Snark). It’s not bad enough that they have proposed to lower the minimum educational standards in Virginia, resulting in a decrease in funding, but they plan to make up this difference on the backs of our teachers and support staff. You heard me right. The same folks who have gone without raises and who have seen health care premiums rise significantly over the last several years. Thanks to Howell, local school boards will now have the option of requiring employees to pay up to 5 percent of the cost of the Virginia Retirement System. This is how Howell defines “giving local school divisions greater flexibility.” Well thanks, Bill! This equates to another reduction in teacher and support staff pay.

So the VRS “flexibility” simply shifts a portion of what the localities were paying onto the backs of teachers and support staff. In addition to shifting a portion of VRS contributions onto these employees, Gov. McDonnell and Howell are also planning on steep cuts in contributions, overall, to the VRS. The effect of this will be nothing short of devastating and will most likely result in significant future budget woes – possibly having to be covered through increased taxes. As the Richmond Times-Dispatch noted,

The problem is the widening gap between what retirement experts say is necessary to fully fund the pension plans and what the state is willing to pay. Virginia’s pension plans were funded at 84 percent of their future liabilities for state employees last summer and 76 percent for teachers; by 2013, VRS projects the plans would fall below 62 percent of their obligations for state employees and 59 percent for teachers at current contribution rates.

Gov. McDonnell and Howell also plan on additional “reforms” of VRS for new employees. As the Virginia Education Association explains,

Future hires will have a reduced retirement benefit.

The House lowers the multiplier for future hires from the current 1.7% to 1.65%. The Senate does not change the multiplier.

The House uses the “Rule of 90” for future hires. Your age and service would need to add up to 90 for you to qualify for full retirement. The full retirement age in the Senate bill for future hires is age 60 with 30 years of experience.

The Senate conforms the full retirement age for new hires having less than 30 years of experience to the Social Security retirement age.
For new hires, both chambers change the formula for determining the Average Final Salary (AFS) to the average of the highest 5 years. This is a change from the average of the highest three years.

Finally, the House and the Senate both change the Cost of Living Adjustment (COLA). The COLA is intended to protect your retirement income from inflation. Currently, the COLA is capped at 5%. You get a 1% increase for each of the first three percentage points of inflation, as measured by the Consumer Price Index (CPI) and 0.5% for each additional point up to seven percentage points of inflation. The current cap is 5%. Under the new proposal you get a 1% increase for the first two percentage points of inflation, followed by 0.5% for the next eight points up to ten percentage points of inflation. The new cap is 6%.

The state saves money on the new COLA if inflation is low, but loses money if inflation is high.

The problem with all of this is that it will take a very long time to realize any savings, let alone in FY’11 or FY’12.  The math simply does not add up.

If you can’t take anymore, I would stop reading at this point. The Washington Post also describes how the House budget plans on lumping

together funding for the Virginia Preschool Initiative, early reading and other targeted programs for at-risk students. Instead of distributing the money based on the number of students who qualify for free or reduced-cost lunch programs (proven barometers for identifying at-risk students), block grants then would go to localities according to student enrollment as defined by average daily membership.

The effect would be to take money intended to help students who are at risk of educational failure and redirect it to districts that are larger and wealthier.

These “block grants” would now be awarded based on student enrollment and not on need. This is what Howell calls “flexibility.” Oh yeah, according to Del. Kay Kory (D-38^th), the “block grants” will also be slashed by $500 million.

All of what I’ve just talked about represents catastrophic cuts to public preK-12 education. What’s sad is that Howell tries to dupe constituents with misleading data and false conclusions. He is the worst of the worst type of politicians. So while Gov. McDonnell and Howell provide significant tax credits to businesses and funds them with these catastrophic cuts, our children are being victimized. Hey I guess since our schools are being gutted, the only way to attract businesses is to provide huge incentives to come here. Our school system certainly wouldn’t be what attracts them.

Gov. McDonnell and Howell clearly don’t understand the economic benefit of a strong education system: gutting preK-12 education, creating a huge VRS liability and laying off 30,000 workers is clearly a better economic plan. Anyone want to call for a re-vote?

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By Marc, March 4, 2010 9:13 pm

According to the Richmond Time-Dispatch, the future of the Fredericksburg Slavery Museum is very much uncertain. It turns out that the museum owes a bit of money in delinquent taxes – $81,000 to be exact; and court records show that they also owe $49,614 for engineering and surveying services provided back in 2006.

The paper tried to reach out to former Gov. Doug Wilder, the museum chairman and executive director, for comment and he has yet to get back to them. The former Governor has some explaining to do. It was just back in October 2001 that Wilder announced that Fredericksburg had been selected as the site to house the U.S. National Slavery Museum.

The first signs of trouble for the museum started emerging back in December 2007. At that time, the Free Lance-Star (FLS) noted that fundraising for the museum fell “nearly 60 percent” from 2006. The FLS went on to note that the “museum [also] posted a deficit for 2006.” All of this was despite a well publicized and attended 2006 fundraising gala that featured Bill Cosby and Ben Vereen, which sought to raise funds for the museum.

Another troubling sign was some questionable accounting of the museum’s finances by organizers. It claimed to have received $50 million in cash and “pledges,” since Wilder formally announced the museum back in 2001. Based on a 2006 tax return, it would appear that most of the supposed money raised was in the form of “pledges.” A 2006 tax return detailed $17.6 million in assets, much of it reflecting the land value of where the museum was to be built. The land is actually a prime piece of real-estate, overlooking the Rappahannock River in Celebrate Virginia. The Silver Company donated the land to the museum in 2002.

Wilder has indicated that the heavy real-estate tax burden has hindered the project from moving forward; and has also indicated that his focus on his duties as Mayor of Richmond (from 2005-2009) has also contributed to the delay. As such, he has pledged to re-focus his efforts on this project and asked the City of Fredericksburg, last year, to provide a real-estate tax exemption to the museum. The city, nearly unanimously, rejected Wilder’s request.

Construction of the museum was originally slated to be completed in 2004; however, it has been repeatedly delayed due to continued funding problems and a total lack of focus on behalf of museum organizers. Of the 38 acres where the proposed museum would sit, the only significant development to actually take place within the property was a 0.3 acre garden. The Spirit of Freedom Garden opened back in 2007. A recent visit by the Richmond Times-Dispatch to the garden site

found it to be neglected, if not abandoned, with torn or weatherworn displays, untrimmed bushes, and rusty or dented benches.

With the project stalled, it would appear that the property is headed towards a tax sale by the City of Fredericksburg this December. The only question is will anyone actually want to purchase the land? According to the Richmond Times-Dispatch:

Celebrate Virginia South LLC recorded in Fredericksburg Circuit Court a “supplemental notice of covenants and restrictions” on the land.

The filing says it restates language from a 2002 transfer agreement limiting the site’s use for an African-American heritage museum of at least 125,000 square feet, or for “charitable educational or public purposes and related uses,” excluding drug counseling, medical procedures and other uses.

In my opinion, the limited potential use of this property would be a major sticking point in any potential sale of the property.

The economic viability of this project could also be waning, with the Smithsonian Institution planning on opening the National Museum of African American History and Culture in 2015 and a Richmond-based group in the planning stages for a slavery or African-American museum.  Given the stigma associated with this project, it may be difficult to raise the necessary funds to compete with these other projects.

I honestly don’t understand why the city didn’t originally provide a real-estate tax exemption to the museum. Given that this was originally billed as a huge tourist attraction to the area, you would have thought that something like this would have paid for itself. It isn’t so unusual to provide real-estate tax exemptions to non-profits.

With all of that said, I agree with the city on rejecting last year’s request by Wilder for a real-estate tax exemption. This project has been so mismanaged that I wouldn’t cut them any additional breaks, even if they should have been provided some from the beginning, unless an agreement involves replacing Wilder and the rest of the museum management team. I would also demand to see a true accounting of museum finances before agreeing to any new deal. This is the only way forward, if this project has any chance of regaining its credibility amongst potential investors. Sadly, it may be too late.

[Image via Robert A. Martin, FLS/AP]

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By Marc, March 4, 2010 4:38 pm

The following is an open letter to Krystal Ball from a William and Mary (W&M) student named Leska Pravdic. She attended a Young Democrats meeting yesterday evening, which featured a visit from Scott Robinson. Scott and Krystal are both running for the democratic nomination in Virginia’s 1st CD.

Ms. Ball,

I’m a student at William and Mary and was at the Young Democrats meeting you visited several weeks ago. At tonight’s meeting, Scott Robinson visited us. I had been looking forward to this because I was interested to hear what his views on the issues were, especially considering his website touches only briefly upon three topics: internet coverage, education, and veterans’ issues. To my dismay, I was disappointed; Mr. Robinson took it for granted that we were all invested in helping him get elected and did not elaborate on his platform. Instead, he seemed to be most interested in getting our opinions on the best strategy for winning the campaign because “at the end of the day, this [electing democrats] is what it’s all about… I’m passionate about winning.”

Though I understand the importance of running effective campaigns, I guess I fundamentally disagree with Scott Robinson’s statement. To me, passing meaningful and progressive legislation is “what it’s all about;” winning elections is not an end but rather a means to an end. This is what I admired and appreciated about your visit to us. You specifically told us your viewpoints on all the major issues (as well as including them on your website), and made it clear that you would not sacrifice your values to party politics and petty bargaining. I think we need more politicians who see things this way, who aren’t willing to just say what they think sounds best.

To make a long story short, meeting Mr. Robinson tonight inspired me to get in touch with you and see if there’s any way I can get involved and help you win the democratic nomination. I heard through Young Democrats that you are looking for student interns to help you through November. Unfortunately, I will not be in Williamsburg over the summer (I will be in D.C.) and I will be in Argentina next semester. However, if there’s any way that I can get involved on a more short term basis in the Williamsburg area, I would love to. Please let me know if you have a need for this type of help.

Thank you very much,
Leksa Pravdic

It seems that everywhere Scott goes he leaves the same impression with folks. He simply continues to avoid “elaborat[ing] on his platform.” When he is forced to discuss issues, he simply bobs and weaves around them; or worse, he proposes ideas (e.g. breeder reactors) that are poorly researched and ill advised.

As the letter writer explains, “he seemed more interested in getting our opinions on the best strategy for winning the campaign” than talking about the issues. I’m going to give Scott some free advice, “talking about issues is what wins campaigns, not avoiding them.” The letter writer rightfully concludes that

passing meaningful progressive legislation is “what it’s all about;” winning elections is not an end but rather a means to an end.

I, like the writer, am inspired by the campaign Krystal is running: one based on a winning message and effective campaign strategy. She is clearly the best candidate to take on Wittman and win come November.

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By Marc, March 4, 2010 5:55 am

Congratulations to Delegate Filler-Corn!

I loved the last part of the video where Speaker Howell remarked that he had worked a precinct, in Stafford County, with Eileen this past November. Of course, they were on opposite sides. Eileen was in Stafford supporting her father, Doug Filler, who ran unsuccessfully for a seat on the Stafford County Board of Supervisors. It was a pleasure getting to know her, during that race. I expect big things from her in the future. Go Eileen!

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By Marc, March 2, 2010 9:21 pm

In an absolute nail bitter, the voters of the 41st House District elected Eileen Filler-Corn (D-Va.) to fill the seat left vacant by Sen. Dave Marsden (D-Va.) – who was recently elected to the State Senate. By a 42 37-vote margin (5,757 5,758 to 5,715 5,721), Eileen defeated Kerry Bolognese (R-Va.).

At times it seemed that Kerry was more focused on running against Democrats on national issues (e.g. Health Care) than he was on addressing local concerns of voters within the district. Eileen focused her campaign on education, which proved to be a winning formula. With the crippling cuts to education proposed by Gov. McDonnell (R-Va.), many localities, which are already facing severe budget shortfalls, are facing unthinkable additional cuts that would directly impact the classroom. This proved too much to take for Fairfax voters!

It may be a mouth full, but congratulations to Delegate-Elect Eileen Filler-Corn!