Virginia Climate Data Shows No Crisis

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One standard response when the Thomas Jefferson Institute challenges the wisdom of electricity carbon taxes or electric vehicle mandates is, are we not worried about the looming climate crisis? The simple answer is no. Data that undercuts the entire alarmist narrative are easy to find.

The premise for the 2020 Virginia Clean Economy Act, which the 2025 Virginia General Assembly may revisit, is the expressed concern over catastrophic climate change. It is a constant refrain with many of our political leaders from the current president down to county supervisors. But what if the entire premise is false or badly overblown?

This year, a major and constant media drumbeat has been that 2023 was the hottest year on record and that 2024 will be hotter. In Virginia, 2023 was unremarkable. Even the summer months, the focus of the fear-mongering about rising heat-related fatalities, showed no alarming trend. For the data just go to a website managed by the National Oceanographic and Atmospheric Administration (NOAA).

Here is the chart showing average summer temperatures in Virginia from 1895 to 2023, June through September. The trend line NOAA tracks is about 1 degree Fahrenheit of rise per century, but based on data elsewhere is between 1- and 2-degrees Fahrenheit. The data shows an overall slight warming trend, but multiple summers up to a century ago were as warm or warmer than the most recent.

The same 1–2-degree Fahrenheit per century rise shows up when you track the Virginia average for the full year, and the average highs and lows. With that website, you can pick any start date you want and get any trend line you want, up or down. For us, the longer the data set, the more reliable. That website does report more rapid temperature rises in a few other states, but most are in the 1-2 degrees F per century range, and most recent highs were matched by highs decades ago.

Another standard claim is that the slight warming underway, which may or may not be driven by using hydrocarbon fuels, is also leading to worsening rainfall. NOAA tracks that on the website, too, and there is a rise in the trend line reported at 3 inches per century. Rain is very much a beneficial aspect of the climate, especially for farmers.

Whether or not 3 inches per year more on average than a century ago is too much of a good thing for Virginia is something you need to decide, but to us it is not worrisome. That website shows nationwide rainfall rising from 1895-2023 at a rate of less than 2 inches per century.

NOAA also tracks the coastal tide gauges that report relative sea level rise. The word “relative” is important because the measurement includes changes in sea level and also any changes in the land beside the sea. In Hampton Roads, the shore is subsiding, and that makes the relative sea level rise appear much greater than the water level itself could account for.  In Alaska, there are places where the land rises so much that the sea is receding.

The alarmist media usually ignores the impact of subsiding or rising land levels. It avoids actual tidal readings in reports and focuses on forward-looking models, with the models themselves based on the highest of the temperature rise predictions. Exaggeration feeds exaggeration.

The Virginia tidal gauge with the longest record is at Sewell’s Point in Norfolk, illustrated below. The combination of sea level rise and subsidence there produces a relative change of less than 5 millimeters (about 0.2 in) per year, or about 1.6 feet per century. Most of the scary predictions of future inundation are based on models showing massive acceleration, to multiple feet per year, but year after year the tide gauges fail to show it.

Look at some of the islands where NOAA is tracking the tides, places without subsidence, and the changes measured are quite slow. It is less than one foot per century in Hawaii, Midway, Guam, Puerto Rico, and Bermuda. Look at the per-century changes in places along California’s coast. The scary predictions of seas rising rapidly have been around for decades now but are not panning out in the data.

The seas have been rising for thousands of years and even at this actual slow rate, coastal vulnerabilities are growing. The next hurricane hitting Virginia will do significant damage. But weather is not climate change, and the mitigations and preparations needed to protect our coastal cities have nothing to do with the use of hydrocarbon fuels. (If you need to suddenly evacuate, take the gasoline car, and leave the EV in the driveway. Power may be out for a long time.)

There is no evidence of any climate-driven crisis, certainly not in Virginia. There is little evidence of any climate change at all. Drastic steps to rapidly eliminate use of hydrocarbon fuels in power plants, cars or homes are not justified by those fears.

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Youngkin Should Make Reliability, Low Cost Top Goals for Coming Clean Economy Act Review

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Governor Glenn Youngkin recently flew to Louisiana to join other Republican governors in criticizing President Joe Biden’s energy policy, especially the president’s hostility to hydrocarbon fuels. Youngkin and the rest gathered at an oil refinery to make their point that oil and gas should not go away in the decades to come.

Energy realism begins at home. Right here in Virginia Youngkin has a golden opportunity to fix Virginia’s broken energy policy and to maintain energy choice in our state economy. The 2025 General Assembly may revisit the Virginia laws meant to eliminate natural gas electricity. Youngkin should make it clear early that he will only sign a bill that protects energy reliability, preserves consumer choice, and prevents major cost increases.

Youngkin is celebrating some energy policy wins that are good news for Virginia consumers. The state is now out of the Regional Greenhouse Gas Initiative, a carbon tax meant to punish the use of coal or natural gas in making electricity. Prior carbon tax payments made by our dominant electricity provider are now fully reimbursed and the cost has disappeared from monthly bills.

We got out in the nick of time. Yet another RGGI carbon allowance auction was held on June 5th and the carbon tax rose to $21.03 per ton, a new record. In the March 2021 auction, Virginia’s first, the tax was $7.60 per ton. When Virginia Democrats voted to put Virginia under RGGI, the tax was standing at less than $6, and nobody except the Thomas Jefferson Institute spoke honestly about how it would likely increase.

Last week, Youngkin announced that he and Attorney General Jason Miyares have concluded Virginia is not legally obligated to adopt the most recent California air emissions regulations for light-duty vehicles. The now abandoned rules would have controlled the mix of new vehicles sold, with a rising requirement that a percentage of them be all-electric. A legal challenge is likely.

Exiting the RGGI and California Advanced Clean Car interstate compacts were huge and positive steps. But the larger challenge to Virginia consumers is the 2020 Virginia Clean Economy Act (VCEA), which also seeks to drive hydrocarbon fuels out of the electricity market within a few years. Even more broadly restrictive on Virginia’s economy is the clean energy policy enshrined in state law which demands changes in agriculture, transportation, and energy in homes and offices.

During the 2024 General Assembly, legislators sidestepped most efforts to either strengthen or weaken the clean energy mandates. Key Senate Democratic leaders instead discussed plans to revisit and revise the full VCEA later in 2024. That effort is fully underway, with more transparency than is usually the case when the legislature meddles in energy policy.

Unfortunately, nobody on the inside is focused on protecting the average residential user or the small business customer. Senator David Marsden, D-Fairfax, has grabbed control of the effort (not actually authorized by a study resolution) and he recently told stakeholders that an activist environmental legal agency, The Southern Environmental Law Center (SELC) will be the official protector of consumers.

The SELC in Charlottesville as the retail consumer advocate in the closed-room negotiations? The utilities themselves will have more concern for the ratepayer impact of the massive switch to solar, wind, and battery power. Marsden’s designation of SELC as speaking for ratepayers is a flashing warning sign of what may emerge.

If there is going to be a revision of the VCEA, ratepayer concerns about reliability and cost need to lead the agenda. VCEA is composed of deadlines to eliminate coal and natural gas at power plants, mandates for the construction of expensive wind, solar, and battery projects, and required purchases of “renewable energy certificates,” which create no electrons for Virginia homes or businesses.

One way or another, all those costs land on customers. If the rapid conversion to unreliable wind and solar power means Virginia faces periods of energy shortage, especially if the expanding energy demands of the tech industry and their data centers match expectations, people will feel the pinch at home as their power is metered or included in unscheduled rolling blackouts.

The panel of stakeholders Marsden announced in late May is dominated, however, by the utilities, the anti-carbon fuel environmentalists, lobbyists for companies that will reap billions in revenue building wind, solar, and battery installations, and gigantic industrial players who are also pledged to some version of net-zero or zero-carbon energy.

Local governments are at the table because the solar industry is complaining it cannot get enough locations approved. Bills were introduced in 2024 to override local zoning and neighbor complaints and force approval of about ten times as many solar farms as have already been built — miles and miles of panels. VCEA requires it. Many farmers are eager to convert to a crop of electrons.

The Youngkin Administration is represented in Marsden’s effort through the Department of Energy. But it remains an advocate for Youngkin’s “all of the above” rhetoric, which commits Virginia to the continued expansion of weather-dependent generation. For example, it may continue to support the expansion of offshore wind beyond what is already planned. It is actively chasing all forms of federal funding, a trail of breadcrumbs leading Virginia away from reliable energy.

“All of the above” is a fine political slogan but is a mushy energy policy. A real energy policy is going to demand some actual choices and standing up to bullies. A real energy policy will make reliability the priority. A real energy policy will require substantial natural gas generation to continue well into the 21st century at the very least and need far less wind or solar. If enough of the current legislators do not understand that the voters should pick some new ones.

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Virginia Declares Independence from California EV Mandates

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Virginia Governor Glenn Youngkin (R) and Attorney General Jason Miyares (R) announced today that Virginia will no longer comply with the California air regulations that will restrict and eventually eliminate the sale of gasoline and diesel vehicles. The announcement is sure to set off a political and legal firestorm as fierce as last year’s exit from a regional carbon tax compact. “Once again, Virginia is declaring independence – this time from a misguided electric vehicle mandate imposed by unelected leaders nearly 3,000 miles away from the Commonwealth,” the release quotes Youngkin. “The idea that government should tell people what kind of car they can or can’t purchase is fundamentally wrong. Virginians deserve the freedom to choose which vehicles best fit the needs of their families and businesses. The law is clear, and I am proud to announce Virginians will no longer be forced to live under this out-of-touch policy.” As with the Regional Greenhouse Gas Initiative, the decision to join in California’s vehicle regulatory scheme was implemented under former Governor Ralph Northam (D). The 2021 legislature, on mainly party-line votes with Democrats in the majority, authorized Northam and the Air Pollution Control Board to adopt the necessary regulations, which were agreed to at the end of that year. The Thomas Jefferson Institute issued early warnings about the implications of the EV Mandate, which was opposed 64-33% in a poll conducted for the Institute by Mason-Dixon Polling, and was the subject of one of our educational social media campaigns. The California regulatory scheme Virginia aligned itself with dates back to 2012 and was called Advanced Clean Cars I. During the first year of Youngkin’s and Miyares’ term, however, California deeply amended the regulatory scheme and adopted Advanced Clean Cars II. It was the ACC II rules that set the requirement that internal combustion vehicles would disappear from new car lots by 2035. Unlike many other states, Virginia has not amended its current regulation to incorporate the new version, and the old ACC I rules expire at the end of 2024. Leaving the California regime returns Virginia to regulation under the federal Environmental Protection Act, which is also proposing to limit the sale of gas vehicles, but so far is not seeking to eliminate them. Under the federal Clean Air Act, California is the only state allowed to set air emissions standards more stringent than federal rules, but all other states are allowed to choose whether to follow California or comply with the EPA. More than a dozen states are following California. Some have also adopted its rules for heavier vehicles, but Virginia never did. In a formal advisory opinion, Miyares states that nothing in state law requires the Air Board to update the regulations it adopted in 2021 to remain aligned with California. As with the statute on RGGI, the operative verb in the key sentence is “may” and Miyares writes: “The use of the word “may” – as opposed to “shall” – in a law evinces discretionary intent.” Perhaps the bill authors in 2020 and 2021 never contemplated that their party would lose the Governor’s Mansion, so they were comfortable leaving the discretion with the executive branch. The statute on adopting the California air rules does include more instances of the word “shall” and will lend itself to a sharper argument over mandate versus discretion. As with the dispute over RGGI, the bottom line is this issue will be back in front of the voters when a new governor and new House of Delegates are chosen in 2025. The parallel, less restrictive EPA regulation will also likely go away with Republican success in federal elections in 2024. A second Biden Administration would push them through. As the saying goes, elections have consequences. This decision will have major consequences for the nation’s automobile manufacturers and their Virginia dealers. The California regulatory scheme is another version of cap and trade, where manufacturers earn credits for electric vehicles that they sell in the various states aligned with California. How many gas-powered vehicles they can sell is determined by how many of those credits they earn. If a lawsuit comes to challenge this decision, the automobile manufacturers may join with the environmental community to bring it.  Tesla makes only electric vehicles and is thus able to sell its unused ACC II credits for major revenue. The pending lawsuit over RGGI was brought by a group making money off that scheme, and the manufacturers also have a big pecuniary interest. The original 2021 bill to join ACC I was supported by the Virginia Auto Dealers Association, which cited concerns that its members would not be able to get as many EVs to sell if the state is not part of the California compact. That may prove to be the case, although in the three years since the projections of public demand for EVs have not been met. They were less than 10% of Virginia sales last year. Early in the Youngkin Administration, the question of how Virginia would react to the adoption of ACC II was raised. Virginia Mercury reported at the time that the Attorney General’s Office was of the opinion the update would happen, apparently automatically. That is more grist for some courtroom mill. In most other states that are part of the California compact, the new version of the regulations have already been adopted or are in the process of being adopted. The National Caucus of Environmental Legislators has tracked that, and noted that “states will need to initiate rulemaking to adopt the new, more stringent regulations.”  As for Virginia, it included a link to that Virginia Mercury article indicating Virginia didn’t need to. As of earlier this week, the state Department of Environmental Quality website indicated that compliance was plugging along, with no reference to any complications caused by California’s new version.
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The Stealth Tax Increase that Remains in the Virginia Budget

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While there has been much celebration at the passage of a new $188 billion biennial budget for Virginia, this deal would not have been possible had there not been close to $1.06 billion in higher-than-expected tax revenue ($1.2 billion by the end of the year) to cover the massive spending increases sought by the Democrats in the General Assembly. This bonus revenue allowed Gov. Glenn Youngkin (R) to achieve his goal that taxes not be raised, and Democrats to get their demand that spending be dramatically increased. It is like magic! What no one is discussing is the source of this “magic” revenue. It is not just from a growing economy. Put simply, there is a “stealth tax” in Virginia that is leading to an increased tax burden for Virginia residents, and thus, higher revenue for the Commonwealth’s appropriators. This stealth tax is the bracket creep that occurs with higher inflation when the tax code does not index their brackets, deductions, and exemptions to account for that inflation. Virginia and sixteen other states with graduated income tax schedules, do not adjust those brackets for inflation. Thus, as inflation pushes wages nominally higher, taxpayers get pushed into higher tax brackets even though their purchasing power has gone down. Unindexed deductions and personal exemptions add to the problem. Standard deductions lose value with inflation. If the deduction does not increase with rising costs due to inflation, taxpayers get less tax relief, effectively raising their taxable income. Inflation also increases the government’s take from real estate and motor vehicle taxes, based on fair market values, but local governments can and often do reduce those tax rates to minimize the impact on their citizens. The state has proven far less likely to do that with its income tax collections, or its own taxes based on property values. Inflation results in a massive tax increase. Fortunately, in the previous two years, as inflation has skyrocketed under President Biden, Governor Youngkin with bipartisan support has been able to return a large portion of this “overpayment” of taxes due to inflation to taxpayers in the form of tax rebates. The standard deduction has also been raised, but the changes only compensated for prior inflation. It is already eroding again.  Personal exemption amounts and the tax brackets were not adjusted. The newly elected General Assembly, with Democrats in control of both chambers, had no interest in returning this overpayment to taxpayers as sought by Governor Youngkin, instead opted to use these funds to increase government spending. From across-the-board teacher and government employee pay increases, reduced tolls in Hampton Roads, and increased mental health spending — the added revenue without an explicit tax increase gave the appearance of “free money” that allowed this spending spree by the General Assembly. Without action, this stealth tax will only get worse. Just yesterday, the Labor Department reported that wholesale prices (PPI) jumped to their highest level of the year. Today, it is expected that the consumer price index will also show a higher-than-expected increase. These numbers will almost guarantee even more surpluses, leading to even greater spending unless Virginia reforms its tax code. Inflation impacts the poor the most as they spend a greater percentage of their income on essential goods like food, rent, and utilities – where cutting back is impossible. The wealthy can merely cut back on non-essential items to account for price increases, the poor cannot. Compounding this issue for the poor is the added taxes they face as the value of their deductions is reduced by inflation, and as their added wages to make up for inflation push them into higher tax brackets. There is a joint tax policy subcommittee that the Democratic-controlled legislature established in 2021 to review potential changes in the tax code.  So far it has been inactive, but the new budget included language directing it to begin work on exploring revenue options and needs, with a reporting deadline of November 1, 2024. Of concern is the following paragraph:
4. The Joint Subcommittee shall explore efforts to modernize the Commonwealth’s income and sales and use taxes during the 2024 interim. The goals and objectives shall include: (i) evaluating existing sales and use tax exemptions; (ii) applying sales and use tax to digital goods and services, including transactions involving businesses; (iii) evaluating efforts to increase the progressivity of the income tax; (iv) and long-term revenue growth to maintain core government services.
Sen. Louise Lucas (D-Portsmouth), who chairs the Senate Finance Committee, highlighted this effort in her remarks after the passage of the budget. She and others wish to ensure there is enough revenue for their growing list of spending priorities – including an economically destructive expansion of the sales tax to “business to business” digital transactions. She and fellow Democrats may be worried the next President will break the inflation cycle and the “stealth tax” will stop producing its bumper crop. Before any new tax is considered, the existing code should be indexed so that taxes are more transparent to taxpayers, the true value of deductions remains consistent and any new spending requires either a booming economy or a tax increase properly approved by legislators and our governor.
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Youngkin Prevents Two Tax Increases, Will Still Sign Record State Budget

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After much political theater, the Virginia General Assembly and Governor Glenn Youngkin (R) have now compromised on a $188 billion state budget based simply on the revenue projected from current tax law, with neither tax hikes nor tax reductions.  Making those revenue projections slightly more optimistic eased the path.

With both sides backing off their desire to change the tax rules, it became clear there was less controversy over how to spend the state’s money in the new biennial budget from July 2024 to June 2026. The top shared priorities of legislators in both parties include education, public employee salaries and benefits, transportation, and capital improvements. Medicaid is also a huge budget growth driver which the Assembly really does not control.

The Democrats in the majority in both chambers will celebrate that the plan achieves the spending they included in the budget they passed in March. Youngkin will celebrate that it did so without either the sales tax or carbon tax provisions that budget included. His success looks even more impressive when you recall the two other major tax hikes Democrats approved and he vetoed, one to impose a massive payroll tax and the other to allow localities to hike the general sales tax.

With a slight hint of sour grapes, a budget summary from the House Appropriations Committee opens with: “The adoption of the digital economy modernization was not driven by a systematic look at Virginia’s tax structure.” That is a euphemism for the expansion of the state’s sales tax to digital transactions, which just a few weeks ago was deemed by Democrats to be vital to the Commonwealth’s future.

The idea is hardly dead. One provision in this final budget, which was not included in previous versions, directs a 12-member legislative study committee to revisit the digital tax. It is also directed to review “existing sales and use tax exemptions” and evaluate “efforts to increase the progressivity of the income tax.” The goal is a tax package with some actual consensus behind it to consider in 2025.

There is no effort in the document to rationalize the Democrats’ decision to abandon their push to return Virginia to the Regional Greenhouse Gas Initiative, which imposes a carbon tax on electricity. Presumably, as with the digital sales tax, including that was a deal killer and veto magnet for Governor Youngkin.

More telling is this. Democrats did not apply any of the additional “found” revenue used to balance the budget to cover the existing programs funded by RGGI tax money. Perhaps they are not as high among their priorities as they claim, bound to infuriate those enriched by RGGI dollars. RGGI has always been more about money than any climate concerns.

What remains in the budget is still a massive spending increase over previous years, fueled in large part by inflation and by the lingering residue of the federal pandemic spending explosion. Both the 2022 and 2023 General Assemblies approved bipartisan tax reductions, mainly by raising the standard deduction on the income tax. Tax revenue has continued to grow.

When the Assembly adopted a similar budget two years ago, it assumed general fund revenue (after the tax reductions) of just under $25 billion for Fiscal Year 2023. The projection for general funds in Fiscal Year 2026 is now $30.3 billion, a 22% increase in three years.

Despite that growth, the general fund (income and sales taxes) continues to be a shrinking percentage of the overall state budget. The non-general fund portion – federal funds, transportation taxes and fees, college tuition and fees – is now almost two-thirds of the total. All take additional dollars out of people’s pockets because of inflation, and all may continue to grow faster than even this budget assumes.

Perhaps by the time of next year’s budget amendments, and certainly in the 2-year budget developed after the 2025 election, the bottom line will be over $200 billion. And that budget summary document written by the Democrats on the money committee predicts “additional funding could be needed…to expand upon current initiatives and revamp the K-12 funding system.”

To their credit, Democrats have now laid out a legislative pathway to give all concerned a chance to be heard. Previous tax reviews have sputtered out and produced no changes, but this one might prove energetic. When major changes have happened, they result because somebody – usually a governor, but it can be legislators – has done the hard work of building consensus.

Some version of the digital sales tax expansion is in Virginia’s future, as more of the economy moves online. Many, but not all, other states have adopted some version of this tax. Most, however, have been careful about the taxes they have imposed on digital business transactions. What the Democrats were recently pushing was overly broad in its application, broad enough to raise concerns it would make Virginia uncompetitive.

It will be easier to convince Virginians to accept the new digital taxes if they are coupled with some level of income tax reduction, which is how Governor Youngkin sought to proceed in his original budget proposal. The Thomas Jefferson Institute’s top priority remains indexing the tax code to inflation, so that brackets and deductions automatically rise with the cost of living. That would check the box of making the tax more progressive.

Even if this new legislative effort at consensus fails to produce a successful package of tax changes for the 2025 session, the issue will become a central debate in the 2025 election season. This is appropriate as voters should ultimately decide if taxes are too low, too high, or just right.

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