Tomorrow’s Ballot Question: Will Virginia Become Illinois?

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It was reported this week that billionaire Illinois Governor J.B. Pritzker had made substantial campaign contributions totaling $250,000 to four liberal Democrats running for Virginia State Senate and the Democratic Party of Virginia.  These donations, made through Governor Pritzker’s “Think Big America” organization, are the clearest sign yet that the left wants to turn the Commonwealth of Virginia into an Illinois of the East.

Truthfully, the governing philosophies in Illinois and Virginia could not be more different.  State and local government spending per capita in Illinois is higher than in Virginia.  Illinois has a higher overall tax burden than Virginia, and Illinois has a substantially higher unionization rate than Virginia.  In fact, about one in seven workers in Illinois are unionized, while only one in 22 workers in Virginia are unionized.  Illinois also has a higher minimum wage than Virginia.  So, what does Illinois get with its higher taxes, higher spending, higher minimum wage, and higher unionization?  A worse state.

In fact, Illinois has a higher poverty rate and higher unemployment rate than Virginia.  Illinois also has a higher violent crime rate and higher property crime rate than Virginia.  Illinois doesn’t fully fund its pensions and thus has the highest unfunded state pension liability in the country ($210b), while Virginia has one of the lowest unfunded liabilities ($18.5b).  Illinois has only funded about half of its pension obligations, while Virginia has funded almost 90 percent of its obligations.  Illinois is notorious for its political corruption and it regularly sends its governors to prison.  Not surprisingly, Illinois also has one of the highest net migration rates to other states.  This means that Illinois loses 22 out of every 1,000 people every year when they leave for a better state, compared to only 3.45 per thousand who leave Virginia.

Under Governors Northam and McAuliffe, Virginia was well on its way to becoming Illinois.  With their passage of collective bargaining for public employees, the passage of draconian and impossible-to-reach carbon targets, and an increased minimum wage, the left was getting its wish.  Fortunately, the Commonwealth put a stop to this drift with the election of Governor Youngkin — who in just two years has cut more taxes ($5b) than the previous two governors combined, has led Virginia to one of the highest job growths in the country, and is battling to reverse the economic impacts of the green extremists.

Tomorrow’s election offers voters a clear choice:  Voters can choose a Virginia sustained by the enduring vision of Governor Youngkin’s “Spirit of (a free) Virginia”, or a pale imitation of Illinois Governor Pritzker’s “Think Big (government) America.  The stakes are high and which way they choose will decide the course of Virginia’s economy for the next decade, at least.

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Dominion’s Wind Towers Arrive Just Before Federal Approval Does

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The Biden Administration’s Bureau of Ocean Energy Management (BOEM) has issued final approval for the construction of Dominion Energy Virginia’s Coastal Virginia Offshore Wind project. Here is the release. A few more review steps remain and should be completed by late January, according to BOEM.

There was no suspense around this, as Dominion has already committed billions of dollars to the project with its ratepayers now paying monthly installments on it. The announcement followed by a few days the arrival of the first set of gigantic monopiles, the first eight of the 176 structures Dominion will build about 27 miles or more off Virginia Beach. Many more will be stored on the Portsmouth waterfront before the final permits are issued.

The tubes are surprisingly similar in size to the hull structures of the Virginia Class nuclear submarines built on the other bank of Hampton Roads at Newport News Shipbuilding, or tubes for traffic tunnels. For many, the sheer size of these planned 15-megawatt turbines may finally become clear.

Coverage of their arrival was provided by The Virginian-Pilot but got little attention outside Hampton Roads. Governor Glenn Youngkin (R) attended and has praised the project all along. The paper provided only an indirect quote from his remarks:

The project is also at the heart of Virginia’s all-of-the-above approach to energy production, which aims to make energy cheap and plentiful by employing fossil fuels, nuclear and growing green energy, said Gov. Glenn Youngkin, who attended the event.

No communication on the event has been issued from the Governor’s Office, which normally chronicles his public events and comments on economically important issues. The Pilot story, worth reading if you can get past the firewall, quotes Dominion CEO Robert Blue extensively on how this project – unlike most others on the East Coast – is still proceeding on time and on budget.

Blue has been repeating those remarks elsewhere now that the BOEM announcement made national news, including the New York Times and CNBC. Dominion’s project, with a claimed energy output of 2,600 megawatts, is the largest single project of all those touted by Biden. The news of its approval drowned out bad news from New Jersey, where energy developer Orsted announced it was backing out of two projects, starting a hissing match with that state’s governor.

In New York, the state is scrambling to issue new requests for proposals on wind projects after contractors there also backed out. The wind developers were seeking higher payments through the regulatory process. Now the higher prices will show up in the next round of contracts instead.

Many East Coast Democratic governors are probably envious of Republican Youngkin, who is likely to have construction well along during his term. But having downplayed his part in the monopile arrival ceremony, his office also put out no public or private announcements about the Oct. 30 BOEM approval. Even so, his strong public support has probably prevented arguments about the wisdom of offshore wind from surfacing in the legislative campaigns. It is an issue in New Jersey.

The figure of $9.8 billion is usually mentioned as the capital cost for Dominion’s European-built turbines and all the added equipment to bring the electricity ashore and connect to the grid. But when the Virginia State Corporation Commission approved the financial investment more than a year ago, the possibility of costs as high as almost $14 billion was recognized in the final order.

Usually forgotten in news coverage is that this project is just the first of two in Dominion plans. Its integrated resource plan and renewable energy compliance plans both call for a second tranche of turbines just as extensive as the first, built a bit further out in the ocean. If indeed Dominion’s first wave has avoided the cost crisis now hitting the industry, nobody is pushing hard on the question of what the second wave might cost.

Official publication of this “record of decision” is the point at which any opponents seeking to challenge BOEM’s decision or related permits have a chance to file a lawsuit. Suits are pending in other states, but the first to reach a decision went against the opponents.

The most common point of attack in the lawsuits is concern over the adequacy and impartiality of the environmental review process. Opponents also raise issues about the impact of the projects on the view of the ocean, both their personal dislike of seeing the wind field and their concerns it will discourage tourism. In some cases, the fishing industry has complained of adverse impacts, but in Dominion’s case a settlement for potential compensation has already been reached with the fishing industry. Those funds will also come from ratepayers.

The potential impact on marine life, especially the truly endangered Atlantic Right Whale, has garnered the most media attention. BOEM and Dominion claim that mitigation efforts built into the construction plan, including the times of year work can or cannot proceed, will provide adequate protections. The whales could not be reached for comment.

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Will The Left Repudiate This Evil?

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“You dance with the one who brung ya” goes one of the oldest sayings in politics.

It means that when elected officials get into public office, they vote with those who helped put them there.

The deadly Hamas attack on Israel, an event slaughtering 1,400 Israelis that Hamas political bureau member Ghazi Hamad called “our message to the world,” has exposed divisions up and down the Biden liberal-left coalition – and sent a warning signal about those who power that coalition.

Polling data demonstrates the split among Democrats, fueled largely by the young and the Left.   It has already caused President Biden to shift his tone, and a recent Reuters report noted that “Biden, 80, has evolved in the face of a challenging 2024 reelection bid, (and) threats by some would-be supporters to withhold their votes over his lack of backing for Palestinians …”

Four hundred congressional staffers have signed a letter to their bosses opposing the Administration’s current approach.  Two-hundred each among the former volunteers of presidential candidates Bernie Sanders and Elizabeth Warren have done the same.  Groups supporting Biden are disbanding.

The divide, and the pressure to move leftward comes from every level of the party, from college campuses to elected officials, and is as evident here in Virginia as anywhere —

  • Virginia Delegate Sam Rasoul typifies the younger element pushing the Democratic Party further left.    His tweet blaming Israel for a hospital explosion in Gaza remains posted and inflaming voters, after even the New York Times apologized for making the same charge because it was Hamas propaganda.  No apologies from Delegate Rasoul.
  • Fairfax County School Board member Abrar Omeish even objected to a moment of silence for the murdered Israelis.  She similarly spoke out against a moment of silence memorializing the victims of 9/11 and while discussing the battle of Iwo Jima.

Such actions have ramifications for elected Democrats and those who support them, and have left many Jews feeling abandoned by those they once trusted.  Were a conservative to engage in such conduct, the charge of anti-Semitism would be deservedly loud and clear.  But conservatives have already repudiated such anti-Semitism.  On the Left, not so much.

The essence of the progressive argument is that Israel’s treatment of Palestinians in Gaza has regularly violated human rights through such means as forcible transfer, administrative detention and the denial of basic rights.  It is a legitimate criticism.

But it does not justify terrorism, a condemnation of which the Left seeks to avoid or at least suggest some sort of moral equivalence between Israel and Hamas.  The issue is not “do they support Israel,” so much as “how can they not condemn Hamas?”

Videos of the attack, now verified by Human Rights Watch, affirm the brutality of Hamas.  To accept the Left’s argument as justification for the slaughter of festival-goers, the offer of $10,000 and an apartment for every hostage brought back to Gaza, young children shot and burned, and assassinating people in their homes is not unlike accepting the notion that Hitler’s regime might perhaps be justified by abuses in the Treaty of Versailles.   It is nonsense.

Ignored is the fact that before 2005, Israel occupied Gaza and pulled out when the people of Gaza chose their own political leadership.  They elected Hamas which openly sought and continues to seek the “obliteration” of Israel in its Founding Charter.  Ignored, too, is that Gaza has been sealed off since 2005 by both Israel and Egypt over fears of attacks.  Since then, there have been more than 22,000 rocket attacks into a country the size of New Jersey.  Does a nation have the right to protect its people?

Instead, the American Left has gaslit Israel and blamed the victim, an approach bubbling up from college campuses, among academics and in the news media – precisely the sources of sustenance for Mr. Biden’s party.  Which is what makes it hard for some elected officials:  These are the ones who brung them.

Political parties are already being pushed to their polar opposites, but leadership unable to condemn the slaughter of innocents because of political dependency abdicates the title of leader.

In the time ahead, the issue may not be who they dance with, but rather who is calling the tune.

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The Policies of Youngkin vs. The Policies of McAuliffe and Northam: A Closing Case for the Future of Virginia

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In two weeks, the people of Virginia will decide on two competing visions for the future of Virginia. Will they elect a General Assembly favoring Governor Youngkin’s more freedom-oriented policy vision, or will they want to elect a General Assembly returning the Commonwealth to the statist policy vision of former governors McAuliffe and Northam? While much of the current debate in the Commonwealth has focused almost solely on abortion, the number of issues “on the ballot” in this election is much broader and ought to be more closely considered by voters. If readers want a deeper dive into these issues, links to the Thomas Jefferson Institute’s work in these areas are included.

Surpluses are on the ballot in Virginia

Earlier this year, faced with a historic $5.1 billion surplus, Governor Youngkin and Democrats in the Virginia Senate reached a deal to cut $1.05 billion in taxes and allocate $3.7 billion in new, one-time spending. This $3 in new spending for every $1 in tax cuts is backward. Budget officials in Virginia just reported that in the first quarter of this fiscal year, surpluses are continuing to be amassed in Richmond. Coupled with the official projections for spending and revenue for the next few years, the next General Assembly will almost certainly be faced with large surpluses. The winner in November will determine if excess funds are predominantly returned to taxpayers or mostly spent on greater government largess. Governor Youngkin has cut $5 billion in taxes since entering office two years ago, more than the combined tax cuts of McAuliffe and Northam over the previous eight years. More information from TJI on tax and spending can be found here, and here. and here.

Worker freedom vs. union control is on the ballot in Virginia

Approximately forty percent of Virginians now live in areas that have approved collective bargaining for public employees. This will divert needed public funds for schools, municipal services, and public safety to pay for full-time union employees whose sole job will be to bargain for higher wages and to protect often subpar employees. In Fairfax, Loudoun, Alexandria, and Portsmouth alone this is estimated to cost $5.5 million. These organizers will then push to divert county coffers away from public services and towards higher union employee salaries. As an example, the Richmond City union negotiated a 40 percent salary increase over the next three years, while Prince William is seeking a 17 percent increase for its teachers next year. Because unions routinely spend generously on political activity, Virginia’s elections will soon be dominated by union support for candidates that will divert even more money into union accounts. Northam signed the law approving collective bargaining in Virginia, while Governor Youngkin has made its repeal a priority. More information from TJI on unions and collective bargaining can be found here, and here, and here.  We also did a public education campaign for teachers here, and here.

Your right to drive an affordable vehicle is on the ballot in Virginia

Despite generous federal and state incentives, expensive electric vehicles (EVs) are less than 0.5 percent of cars on Virginia’s roads and just under 10 percent of new cars sold. Yet, under existing Virginia law, EVs must make up 35 percent of auto makers’ sales in just under three years and 68 percent in just under six years. Not only are these cars priced too high for most buyers in Virginia, but they are proving unreliable for longer commutes and road trips, and EV battery life and battery safety continue to be an issue. Northam signed the legislation deciding what kind of car Virginians are allowed to own, while Youngkin has sought its repeal. More information from TJI on electric vehicle mandates can be found here, and here, and here. We also did a public interest campaign on EVs here.

Reliable and affordable energy is on the ballot in Virginia

The Virginia Clean Energy Act (VCEA) mandates unrealistic and arbitrary targets and deadlines for the use of renewable energy in Virginia that even Dominion Energy now admits cannot be met. This is forcing the closure of several efficient, reliable carbon-producing energy facilities. Worse, Dominion has noted that the push for carbon-free energy significantly impacts the reliability of its energy supply as more of the Commonwealth’s energy will be dependent on intermittent energy sources like solar and wind power that can’t produce needed power without the right weather conditions. Worse, the unmet demand can’t be met by outside sources if other states also transition to intermittent renewables. Finally, the cost to build zero carbon energy in time for the VCEA deadline will increase the cost to residential ratepayers by over 80 percent. Northam signed the VCEA into law, while Youngkin has sought its repeal and has pushed for reliable and clean Small Modular Reactors as an added alternative. More information from TJI on energy can be found here, and here, and here.

Educational freedom and parental rights are on the ballot in Virginia

The Virginia Department of Education recently reported that there has been a significant and persistent learning loss in reading and math for Virginia Students in grades 3 through 8. This loss began before the COVID-19 closures and accelerated after. More than half of these students failed or are at risk of failing their reading SOL exam, while two-thirds are either failing or at risk of failing their math SOL exam. The most extreme decline is in Black and Hispanic outcomes, increasing the performance gap significantly. Other reports by the Department discuss the doubling of chronic absenteeism among students, similar absenteeism among teachers, and a growing number of teacher vacancies.  There is growing division between parents and schools over what their children are being taught, over well-documented issues of how schools have handled violence and violent students, and on a parent’s right to be told about decisions or actions their children are making while in school. Youngkin has fought to defend parents’ rights, pledged to ban the use of critical theory in schools, give parents more control over their children’s education, expand school choice through lab schools, and expand scholarships for low-income students. Northam and McAuliffe, on the other hand, focused on increasing funding for public schools, expanding access to early childhood education, and promoting equity and inclusion in schools. More information from TJI on education freedom can be found here, and here, and here, and here, and here.

How the above issues are handled by the next General Assembly could significantly shape the future of the Commonwealth for a generation — be informed!

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Virginia Tax Collections and Spending Just Keep Climbing

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The recent unemployment rate and job growth trends for Virginia. The decline in adding jobs was cited by Secretary of Finance Stephen Cummings as a reason to remain financially cautious.

Virginia’s state budget grew 90% in the past decade, far faster than in previous decades. After adjusting for inflation and population changes, spending still jumped 4% each year, a high rate of compound real growth. At the same time, the state continues to see explosive growth in its revenue, pointing to cash surpluses continuing for some time.

These facts emerged from two presentations to the Virginia General Assembly this week. The Joint Legislative Audit and Review Commission (JLARC) issued its annual report on state spending growth on Monday. That same day, Secretary of Finance Stephen Cummings reported on the revenue results from July through September, the first quarter of Fiscal Year 2024.

In just those three months, revenue exceeded the revenue estimates by more than $412 million. Other months, with larger pots of projected revenue, are still ahead. Should this revenue trend hold, surpluses similar to the historic surpluses of Fiscal Years 2022 and 2023 could result next June.

During the elections two years ago, Virginia’s flush financial condition was inspiring debates about tax reductions and tax reform. Some, but not all, of the proposals went on to pass. But with General Assembly elections just over two weeks away, few candidates in either party are promising more tax reform or reduction efforts in the next session.

Secretary Cummings openly expressed the cautious attitude of Republican Governor Glenn Youngkin’s administration. Youngkin and Cummings last week heard their own advisory panel of economists report they expected no recession or at worst a mild one as the battle with inflation continues, but they apparently disagree.

Stubborn inflation is one reason Cummings cited, but they also are worried about the impact of the ongoing war in Ukraine, the new conflict between Israel and the terrorist army of Hamas, and the wave of strikes sweeping the U.S.

As has been the case for a while now, the strong revenue growth is mostly generated from the corporate income tax and that portion of the personal income tax paid by individuals through quarterly installments. Those revenues are usually from people earning income from businesses or investments. The portion of the income tax from payroll withholding is also growing, another good sign, but it is only about 1.4% ahead of projections.

Sales and use tax revenues for the quarter also showed only modest growth, but exceeded the official forecast that they would sink by almost 7%. That has not happened so far. For those who like details, here is the full set of financial summaries presented.

Cummings made the same presentation to the House and Senate committees that write the budget and tax rules. He received only one or two minor questions. The “bumps on a log” response from legislators, again, is very telling during this hot election season.  The Senate Finance and Appropriations Committee in particular is dominated by senior legislators who are not running for new terms.

The JLARC report on spending for Fiscal Year 2023, and for the decade of 2014-2023, included the claim that “average growth rates” it reported were “slightly higher than in prior decades.” Slightly? A look back ten years to the 2013 report points to obvious acceleration. For example, the General Fund side of the budget grew 38% in the decade ending July 2013, and then another 74% in the decade ending July 2023.

In dollars, spending grew from just over $17 billion in 2013 to just under $30 billion in 2023. But it doesn’t seem to be causing anybody any heartburn. Neither does the $81.1 billion total for last year.

Virginia splits things between the General Fund (GF), mainly the tax sources, and what is called the Non-General Fund (NGF), mainly federal funds, motor fuel and vehicle license fees, college tuition and fees, and state hospital revenues. The NGF side of the budget doubled, a full 100% growth, over the last reporting period. It went from $25.6 to $51.4 billion.

You can see the bump of massive federal funding related to the COVID-19 pandemic in the charts, but that abated substantially before FY 2023, the endpoint for the decade of comparison. Because of those Covid funds disappearing, total spending for FY 2023 actually dropped from the previous year.  The COVID dollars were all part of NGF.

The report covers where the spending growth has happened, and as usual, most of the growth in spending was in just a few agencies or programs: the Medicaid health services to the poor (11% per year), state payment to local public schools (6% per year), transportation (9% per year), and the premier universities (University of Virginia, 6% per year and Virginia Tech, 4% per year.) Those reflect total budgets which includes both federal funds and college tuition checks.

If we look instead at just the GF spending, the income and sales tax dollars, the pattern basically holds. The largest increases in this category were in public education assistance (6% per year), the state share of Medicaid (6% per year) and higher education’s general account (6% per year.) Health and education programs have gotten most of the new dollars by far and are usually the main focus of demands for even more.

JLARC actually started with the annual spending growth reports in 2002, and the first report looked at data as far back as 1981 (GF of $2.7 billion) and tracked 20 years of spending growth. The trend of spending growing faster than the state’s population and faster than inflation was already well established.

Can the trend be reversed, or at least can the rate of climb be reduced? Elections are the time when that proposition can and should be put to the voters.  Otherwise inertia rules.

Steve Haner is Senior Fellow for State and Local Tax Policy at the Thomas Jefferson Institute for Public Policy. He can be reached at [email protected].

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