Something for Everyone in COVID Money Flood

Will $50 million be enough? Will that get all the Virginians who have fallen behind due to COVID-19 square on their rent or mortgage payments?  Or is that amount, in a new relief program detailed Monday by the Northam Administration, merely a start?

There is a hint on the program’s web page. “Financial assistance is a one-time payment with opportunity for renewal based on availability of funding and the household’s need for additional assistance and continued eligibility.”  Of course, it is just a start.  A Senate committee was told last week that Governor Ralph Northam is considering spending hundreds of millions more for the same purpose.

Why not?  The flood of COVID-19 relief money from Washington continues, with applicants lining up for their share.  Within the more than $28 billion directed to Virginia in just a matter of months, the money to help with late rent and mortgage payment constitutes a rounding error.  Much of the rest is going to businesses or individuals with far less need.

The Virginia Senate Finance and Appropriations Committee met virtually on June 23 to be briefed, among other things, on how the four waves of federal assistance have been or will be spent.  The meeting was not reported at the time, but was recorded, and the presentations are online.

Secretary of Finance Aubrey Layne, in his presentation, estimated that Virginia has received more than $28 billion in direct aid – $6.5 billion direct to the state and local governments, $14.4 billion to state businesses in the Payroll Protection Program and $7.3 billion pledged to municipal liquidity facility loans to cover revenue losses. 

That does not, repeat not, include the funds flowing to individuals through the supplemental unemployment insurance payments (that extra $600 per week) and the billions paid out in those individual stimulus checks to federal taxpayers. The unemployment bonus alone may exceed $1 billion per month feeding Virginia’s economy.

In all, Layne estimated, the four bills which have passed Congress (so far) created 79 distinct paths for money to flow to the Commonwealth, its localities, its businesses, and its citizens. The most important to the state budget was an increase in the federal share of the cost of Medicaid, saving the state’s General Fund $650 million this year and next. Another $644 million has already been shared with local governments, not counting the $200 million Fairfax County got directly because of its size.

After all the state-level spending on emergency response, personal protective equipment, testing equipment and lab services and other direct costs of dealing with the disease, more than $2.2 billion remains unspent and presumably will carry into the new fiscal year
July 1.

In a separate presentation, the committee staff took 46 pages to detail all the ways the federal money is propping up the state, its localities, colleges and hospitals. It also provides a bit of historical context, contrasting the trillions spent nationally this year with $10 billion in grants to the states during the 2001 Dot Com recession and the $275 billion provided states during the Great Recession starting in 2008. This time, the big bucks (so far) have gone to businesses and individuals.

Virginia hospitals and other health care providers have received $1.7 billion to date, in two waves. Four hospitals hit hardest by COVID received $75 million, directly, with another $75 million to nine “safety net” hospitals. An additional distribution for Medicaid-only providers is pending this summer.

Despite all the money that has flowed out, the list of pending requests totals another $1.2 billion. The staff reported that the Department of Housing and Community Development wants a total of $235 million for rental and mortgage relief, homeless housing, and broadband expansion (so, indeed, $50 million is the down payment.)

In the early waves, $394 million was directed to Virginia colleges and universities.  Just one university, Virginia, has asked for $260 million more out of the remaining pot. Virginia Tech can get by with a mere $33 million more.  The Department of Social Services wants $171 million, “mainly for providing a stimulus benefit to immigrant families that are not eligible for social security numbers.”

The sugar high this has provided to the state’s economy so far, with the glucose drip right into the vein continuing into next year, explains why the state’s finances look far, far better than many expected. In fact, at one point in last week’s meeting, Senator Richard Saslaw, D-Fairfax, started pressing for an estimate on how much of the $2 billion frozen in the coming state budget could be released.  Layne demurred, but did not deny that much of the deferred spending may be restored.

This massive tsunami of federal largess, all borrowed from the future, far exceeds any precedents, like so much else that has happened in the past four months. It cannot continue. Yet it probably will. If you thought government spending would be among the COVID casualties, you were wrong. If you thought the Bernie Sanders utopian vision of society’s needs being met by unlimited federal spending died with his campaign, the pandemic brought it roaring back to life. 

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Working at Home and Implications for the Future Economy

A computer on a cluttered desktop due to working at home

Working from home was already becoming more common, but the COVID-19 crisis forced many employers to quickly alter policies to enable more workers to perform their jobs from home.

This forced experimentation with remote work is causing some employers to alter their policies permanently.

Shopify, for example, announced in May that its 5,000 employees would be allowed to work from home indefinitely. Twitter’s CEO told workers in May that they can continue working from home “forever” even once the pandemic is over.

More employers following this example could cause a fundamental shift in demand for office space.

But not all work can be performed remotely.

Which occupations could be performed remotely? The American Time-Use Survey and the Occupational Information Network, or ONET, the database of occupational information developed under the U.S. Department of Labor, can shed some light.

The Time-Use Survey asks if respondents can work from home, if they actually have worked from home, and the reasons for working from home.

NET provides worker characteristics including the need to “… perform job tasks in close physical proximity to other people.” It also has information on other working conditions that would typically preclude working from home, such as working outdoors or in an enclosed vehicle or needing to spend working time standing or wearing safety equipment.

Combining the Time-Use Survey and ONET data, occupations can be classified into one of three buckets: remote jobs, partial-remote jobs and non-remote jobs.

About 12% of U.S. employment falls under remote job occupations, with 26% in the partial-remote bucket and the remaining 62% in non-remote occupations.

Remote jobs include occupations such as bookkeepers, software developers, lawyers and financial managers. Office clerks, personal care aids, and general operations managers top the list of partial-remote jobs. Non-remote jobs include retail salespersons, cashiers and registered nurses.

The 12% for remote job seems like a small number, but it could have significant implications for regions that have a relatively large amount of office space.

To measure the potential impact on metropolitan areas, let’s look at the industries with the highest concentrations of remote-work employment as defined by each industry’s component occupations. The top industries included software publishers, computer system design and legal services.

The resulting remote-work index compares the mix of remote-work employment in the region versus the mix in the nation.

An index of 100% means the region has the same mix as the nation. An index of 110% means the region has 10% more remote jobs than average for a region of its size and an index of 90% means the region has 10% less remote jobs than average.

Changing remote work conditions have significant implications for economic development, site selection and urban planning.

Employers shifting to remote work arrangements can drastically change the demand for office space.

Likewise, labor supply questions for some occupations need to be approached differently if commuting time becomes a less important factor.

If more people are working from home, shifts in daytime population will have ripple effects for both business districts and neighborhoods.

Based on the remote-work index, the top five metro areas with high concentrations of either tech or office employment:

  • San Jose-Sunnyvale-Santa Clara, Calif., with 145% index;
  • California-Lexington Park, Md., 134%;
  • Boulder, Colo., 131%;
  • Washington, D.C.-Arlington-Alexandria, 128%; and
  • San Francisco-Oakland-Berkeley, Calif., 126%.

Of metro areas with lower ratios of remote work jobs, some have high concentrations of tourism industries, others are heavy with agriculture, while others have large manufacturing sectors.

The bottom five are:

  • Elkhart-Goshen, Ind., with a 66% index;
  • Visalia, Calif., 66%;
  • Kokomo, Ind., 69%;
  • Ocean City, N.J., 69%; and
  • Madera, Calif., 69%.

The Richmond metro area remote-work index is 107%, ranking it No. 34 in the nation.

The tourism activity in Virginia Beach-Norfolk-Newport News region puts it at 95%, with a ranking of No. 115.

The coronavirus pandemic has reshaped our lives over the past few months. Some analysts are expecting reduced demand for traditional office space in the post-COVID era. Others point out the difficulties of onboarding new employees and creating a culture in a totally remote work environment.

The long-term effects remain to be seen as the direct coronavirus impact plays out and the responses of employers take hold in the post-COVID economy.

A version of this commentary originally appeared in the July 6, 2020 edition of The Richmond Times-Dispatch.

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New Data Shows Transit Is Changing

Transit agencies are in crisis mode. The Covid-19 pandemic and shelter-in-place orders across the country led to ridership declines of up to 95%. But even before this crisis, transit agencies were losing ridership.

Recently, the Center for Urban Transportation Research (CUTR) at the University of South Florida analyzed the transit trends in the 2017 National Household Travel Survey (NHTS). Every eight years the U.S. Department of Transportation conducts the NHTS, which analyzes trends in personal and household data. The biggest takeaway is that while many imagine the primary transit customers to be low-income minorities, the reality can be very different.

Some of the survey results are not surprising. Almost half of transit riders live in zero-vehicle households. More than 30% of riders live in one-car households. Vehicle access is a primary determinant of transit usage; households with one vehicle take 80% fewer transit trips than households with zero vehicles.

Most zero-vehicle households cannot afford a car. However, some of the zero-households choose not to have a vehicle. While these households are a fraction of all transit users, they have much higher incomes and are concentrated in transit legacy cities such as New York or Washington.

Between 2009 and 2017, the number of transit trips per capita fell among every age group, on average by 0.5, from 4 to 3.4 trips per day. At the same time, the average age of riders is increasing. The transit mode share increased in many age groups, particularly ages 36-65. Part of the increase is due to the average age of U.S. residents increasing from 36 to 38, but part is due to increased use by older residents.

White non-Hispanic residents make almost 40% of trips, an eight-percentage point increase from 2009. Meanwhile, black and Hispanic transit usage was down more than 5%. This trend is significant because the percentage of white non-Hispanic residents in the overall population continues to decline.

The average transit trip time increased 14% from 2009 to 2017 from 21 to 26 minutes. While the average wait time decreased, the in-vehicle time increased by almost six minutes. Part of this is increasing traffic congestion on city streets since many cities ignore the problem of traffic congestion. More traffic congestion makes bus trips slower and less reliable. But part of this increase is also a growth in rail trips, which tend to be longer distances.

Ride-hailing constitutes a small but growing share of all trips. In 2017, almost 3% of commuters chose ride-hailing, four times as many as chose cycling and twice as many as chose walking. And those numbers continued to increase between 2017 and 2019. Of those who chose transit, almost 30% ride-hailed at least once per week. This suggests that transit usage and ride-hailing can be complementary, and transit agencies that try to restrict ride-hailing might be alienating some customers.

However, the biggest takeaway from the NHTS is the diverging incomes between bus and rail riders, which are two very different demographic groups. Rail use is highest among riders earning $125,000 to $200,000 and lowest for riders earning $10,000 to $50,000. Bus use is highest among riders who make less than $35,000 and lowest for those who make $75,000 or more.

Almost 8% of commuters making less than $10,000 use buses. Less than 1% of commuters making less than $10,000 use rail. Less than 1% of commuters making $100,000 or more use buses. Middle-class customers (those in the 3rd quintile) use rail the least, making fewer than two billion trips. The wealthiest commuters (those in the 5th quintile) use transit more than working-class customers (those in the 2nd quintile) and middle-class customers (those in the 3rd quintile).

Clearly, transit use is bifurcated. And while bus riders have lower incomes than average, rail riders have much higher incomes. Geographic location also plays a significant part. Rail transit systems are more concentrated in expensive metro areas such as New York, Chicago, San Francisco, and Washington, DC. But even after you adjust for geography, the average transit customer is becoming older, whiter and wealthier.

Therefore, we need to rethink government funding of mass transit. The biggest justification for subsidizing transit is to provide low-income residents who can’t afford a car a safe, reliable trip to work. Without transit, these workers may not be able to access jobs, hurting their opportunities and increasing their potential need for social programs, such as welfare. But given that many rail users today are middle to upper income commuters, taxpayers should stop subsidizing these trips. Rail operators should charge these customers the full costs of providing the trip.

After verifying income, vouchers could be provided to low-income residents who use rail. Living car-free might make sense in parts of New York City or Washington, DC, but it should not involve a subsidy to the wealthy.

A version of this commentary originally appeared on June 4, 2020 in the online Surface Transportation Innovations Newsletter.

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Feds Define What is NOT a “Waters of the United States”

In my many efforts to unravel and explain the federal government’s sometimes baffling efforts to legally define the things that matter most to property owners, I have started by describing the government’s interpretation of a “ditch” (see here).

Now the U.S. Army Corps of Engineers (Corps) and U.S. EPA (EPA) have published a final rule describing and regulating what is a “water,” under the Clean Water Act (CWA). The new rule describes perennial, intermittent, and ephemeral streams plus tributaries, ditches, lakes’ and ponds.

Exclusions matter

If you own land used for farming or ranching in the United States, you need to know that not all waters are waters of the United States (WOTUS) — at least, not by legal definition, and the exclusions have environmental groups outraged. In fact, the agencies have an entire section entitled “Waters and Features That Are Not Waters of the United States”.

The final WOTUS rule codifies “…twelve exclusions from the definition of waters of the United States.” For example, the final rule excludes groundwater from the definition, including groundwater drained through subsurface drainage systems, reflecting the agencies’ longstanding practice.”

Since this rule was published as final the United States Supreme Court in a Hawaii case involving the County of Maui has a different take on this exclusion (more on that case here).

The agencies also create “…a new exclusion for ephemeral features, including ephemeral streams, swales, gullies, rills, and pools, and excludes diffuse stormwater run-off and directional sheet flow over upland.”

In another part of the rule agriculture is again helped by EPA. The new rule “…excludes artificially irrigated areas, including fields flooded for agricultural production, that would revert to upland should application of irrigation water to that area cease.”

Fewer silly legal actions

The new WOTUS rule also clarifies and keeps EPA and the Corps from bringing silly legal actions. The new WOTUS rule “…excludes artificial lakes and ponds, including water storage reservoirs and farm, irrigation, stock watering, and log cleaning ponds, constructed or excavated in upland or in non-jurisdictional waters…”

In another victory for agriculture, forestry, and ranching, the new rule  excludes “…water-filled depressions, constructed or excavated in upland or non-jurisdictional waters incidental to mining or construction activity and pits excavated in upland or in non-jurisdictional waters for the purpose of obtaining fill, sand or gravel.”

The agencies have also excluded stormwater control features which are “…constructed or excavated in upland or in non-jurisdictional waters to convey, treat, infiltrate, or store stormwater run-off.”

In another effort to protect agriculture and others, the final rule excludes “…groundwater recharge, water reuse, and wastewater recycling structures including detention, retention, and infiltration basins and ponds constructed or excavated in upland or in non-jurisdictional waters.”

Upland defined

The term “‘upland” is also defined. This term is very important to farmers, ranchers, and foresters. It means “…any land area that under normal circumstances does not satisfy all three wetland characteristics identified in the definition of  ‘wetlands’ (hydrology, hydrophytic vegetation, hydric soils) and does not lie below the ordinary high water mark or the high tide line of a jurisdictional water.”

All these definitions are tricky but very important to those in agriculture and ranching.

Environmental outrage

Many environmental groups have expressed outrage that many waters are being excluded from the definition of WOTUS. The Trump Administration has tried to follow the Clean Water Act, the Supreme Court cases’ and the legislative history of the CWA by spelling out specifically what are not waters of the United States.

It is very helpful to agriculture.

Many of these exclusions have been adhered to in the past, but often-times zealous bureaucrats and lawyers have used the courts to regulate some of these non-jurisdictional waters.

Hopefully, these definitions will keep many of you from going to court.

A version of this commentary originally appeared on June 30, 2020 in the online Farm Progress.  The opinions of the author are not necessarily those of Farm Futures or Farm Progress. 

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COVID Declared a Workplace Emergency in Virginia: Will New Regulations Drive Business Out of Business?

The Northam Administration’s Safety and Health Codes Board agreed June 24 that COVID-19 in the state’s workplaces demands an emergency state response, but the nature and exact wording of that response remains undecided.  If adopted, formal regulations come with the potential for heavy penalties for employers cited for failures.

The vote to proceed with something came after a contentious emergency meeting where only members of the board and staff were able to speak. Three of the board’s members opposed the emergency declaration and three abstained, perhaps reflecting the broad and strong opposition the draft proposal generated from Virginia’s business community.

The Board is considering meeting next week, and the severity of the proposals should generate additional comment.  While formal comment is concluded, Virginians can also contact Board members directly in the interim.  A list of Board members can be found by clicking here and communications can be sent to ane.daffron@doli.virginia.gov with a request to pass them on to all Board members

If agreed upon, regulations could take effect by July 15 if Governor Ralph Northam’s signs them and will not disappear if a quick end is declared to the current emergency or the threat of the disease dissipates.  With additional steps they could quickly become permanent regulations, the first in any state seeking to protect employees from this disease.

The draft rules (here) and a related 200-page briefing package (here) were first made available June 12 and then revised June 23. A window for on-line written comments closed June 22, but more than three thousand were received, with the business reaction overwhelmingly negative.

The stated goal is to prevent spread of disease in workspaces, and screening, sanitation, face coverings and social distancing are directed in detail. The focus on workplace safety follows COVID-19 outbreaks in food processing and health care settings. These proposals, however, will reach into every Virginia retail, office or manufacturing space.

To review the comments already filed visit the meeting information page (here) and scroll down to a long list of documents. Online comments are on this related page on Virginia’s Regulatory Town Hall website.  The fact that so many substantive comments could not be absorbed by Wednesday’s meeting was put forward as a reason for delay. Many comments were from individuals upset with the Governor’s previous mandates for face coverings, only a small and less controversial part of this proposal.  

The first-line enforcement agency will be the Department of Labor and Industry, already enjoying massive new powers and added staff granted by the 2020 General Assembly to field complaints and impose penalties related to hiring, compensation, and alleged workplace discrimination.

Included in the document are four designations of risk level, imposing somewhat different mandates on employers based on that classification. The rules also seem to change based on the perceived level of infection in a surrounding community. The rules reach into who must leave the workplace when showing symptoms or diagnosed, who may stay but under what conditions, and when employees may return after recovery.

There have always been viral and bacterial threats in workplaces, some of them potentially deadly. Specific directives related to infectious disease have not been adopted before.  The existing health rules and protocols at the state or federal level, and the available remedies, are considered adequate by many of the industry groups pushing back.  That is the reason the Trump Administration rejected similar proposals from the national AFL-CIO.

The Thomas Jefferson Institute added its name to a joint letter with more than two dozen general or industry-specific business associations, who asked that the regulations simply be rejected. Some of the same groups filed individual comments.

In its comments, the Virginia Poultry Federation notes it already faces penalties if members fail to provide adequate protective equipment or sanitation. They are already complying with additional COVID-driven rules or recommendations from the health and safety regulators and taking their own steps to prevent infection. “There is no scientific basis for regulating beyond what these agencies have recommended to date,” they state.

Pointing to all the other ways they are regulated, Virginia’s dentists, doctors and medical facilities have asked for an exemption from these new workplace rules. “Layering additional documentation and reporting requirements on top of extensive measures that have been instituted already would be overly burdensome and unnecessary,” the Virginia Dental Association leadership wrote.

But the advocates are also numerous. The Commonwealth Institute for Fiscal Analysis is now expert in health matters, and recommends the rules include “a presumption of teleworking ought to exist, and the employer ought to be required to justify why workers need to be back in a physical location.”

“With enforceable regulations, workers will feel more empowered to speak out for their safety in the workplace, particularly during COVID when essential workers are risking their lives to keep the economy alive and feed their families,” Jason Yarashes, an attorney with the Legal Aid Justice Center, told the Virginia Mercury last week. The Legal Aid group had petitioned for regulations governing poultry plants. The move prompted Gov. Ralph Northam to ask labor officials to develop the more far-reaching rules now under consideration.

By “speaking out” is he referring to complaints filed with the employer or regulators? It goes further. The draft regulation concludes with prohibitions on any adverse action being taken against an employee “who raises a reasonable concern about infection control related to the SARS-CoV-2 virus and COVID-19 disease to the employer, the employer’s agent, other employees, a government agency, or to the public such as through print, online, social, or any other media. (emphasis added.) 

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