Obama WOTUS Rule Temporarily Reinstated

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A U.S. District Court in South Carolina last month revived President Obama’s Waters of the United States (WOTUS) rule in 26 states (now 23 states due to another decision.) The decision is a temporary setback. This, from the court: “The court reiterates that the issue currently before the court is not the merits of the WOTUS rule but the procedure by which the [EPA] Suspension Rule was implemented. Many other courts are delving into the merits of the WOTUS rule – this court need not enter that fray.”
Before people get upset about a court repealing President Trump’s WOTUS rule proposed changes, farmers need to know the South Carolina U. S. district court stated EPA had violated the Administrative Procedures Act (APA )in promulgating its Suspension Rule.
South Carolina Coastal Conservation League, Charleston Waterkeeper, American Rivers, North Carolina Wildlife Federation, and other environmental groups sued Scott Pruitt, former Administrator for EPA, and the Army Corps of Engineers. These groups argued correctly that EPA’s Suspension Rule violated the APA because they were not allowed to submit nor did the Administration solicit any substantive comments regarding changing the regulatory definition to WOTUS.
At the time the administration promulgated this rule, I believed a mistake was made. The APA is clear that before promulgating a rule an agency must publish a general notice of proposed rulemaking in the Federal Register.
An agency is generally required to offer an opportunity to participate in a rulemaking by submitting data, views, evidence and arguments. Also, case law is clear that “…the notice is deemed defective if it does not include sufficient detail on its content and basis in law and evidence to allow for meaningful and informed comment.”
The purpose of comment is to allow interested members of the public to communicate its information, concerns and criticisms. The district court judge cites to a well-known opinion for the 4th Circuit which makes it clear to anyone that when an agency suspends one set of regulations and proposes to promulgate another set of regulations, this qualifies as rulemaking under the APA.
This was such a slam dunk for the South Carolina court, you have to wonder what the lawyers were thinking when the Suspension Rule was proposed. Administration lawyers apparently claimed that this issue was so narrow that the present Suspension Rule merely maintained the status quo.
Administration lawyers, in effect, argued this proposed rule was not worthy of seeking comment. They also argued no repeal of the WOTUS rule is being proposed presently.
The South Carolina court concluded there was no meaningful opportunity to comment, and that is simply against the law. The court determined that both EPA and the Corps had violated simple requirements of the APA.
The court slammed EPA and the Corps by saying “To allow the type of administrative evasiveness that the agencies demonstrated in implementing the Suspension Rule would allow government to become a matter of whim and caprice of the bureaucracy.”
Again, this issue is so clear cut you have to wonder whether EPA and the Corps deliberately sought failure in this case.
We must not forget the Obama 2015 WOTUS rule sought to define what constitutes waters of the United States. Initially this definition came out in 1980. In 2015 as we know, the Obama administration sought to replace the Corps’ jurisdiction. The Trump administration had argued it was seeking a two-year delay, which takes us to 2020. Apparently, it will take the bureaucrats another two years to define what is a water of the United States.
It is interesting that 2020 happens to be another presidential election year.
As the court said, with new presidential administrations new regulatory requirements and priorities come into effect. It is clear the bureaucracies seek to drag out this issue as long as possible and seek to keep the Obama administration’s definition of waters of the U.S. This delay helps in achieving this goal. Why is the Trump Administration allowing this nonsense!!!!
(This article first ran in the September 18, 2018 issue of Farm Futures.)
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Tax Conformity Alone is Not Enough

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When the General Assembly meets in January 2019, it should fully conform Virginia’s tax system to the new federal Tax Cuts and Jobs Act, but it should not stop there.  It should also take immediate steps to reduce the tax increases that conforming the tax code will automatically create for many Virginia families and businesses.
The easiest step to help families would be to double Virginia’s standard deduction, which has been stalled at $3,000 for an individual and $6,000 for a couple filing jointly for decades.  Congress doubled the federal standard deduction to $24,000 for a couple and the state could double its deduction to $6,000 for an individual and $12,000 for a couple.
This could be done as part of the emergency legislation that adopts conformity.  If passed in a timely manner, the increased deductions could be applied retroactively to this current tax year.  It would counteract much of the expected $532 million in higher individual taxes estimated to result if conformity is adopted without tax changes.
The standard deduction coupled with today’s personal exemptions create the portion of individual income that is tax free — the threshold above which taxes are due.   Under current Virginia tax law, a couple can take a $6,000 standard deduction and add their $1,860 in personal exemptions ($930 each) for a total of $7,860 tax free. Each additional dependent qualifies for another $930 personal exemption.  Only income greater than the threshold is taxed.
Both federal and state law also allow for taxpayers to itemize deductions, and they continue to have this option under the new rules.  However, the higher federal standard deduction is expected to cause more than 600,000 Virginians to switch to the simpler, standard deduction route.  As many as 88 percent of federal taxpayers are projected to take the standard deduction.
Many of the 40 other states that tax personal income have higher thresholds than does Virginia before state taxes kick in.  Compare Virginia’s $8,790 tax free for a couple with one child to $13,600 in Maryland, $17,500 in North Carolina and $24,000 in South Carolina or Washington, D.C.  Tennessee has no personal income tax. West Virginia, which starts to impose income taxes after $6,000, is the only near neighbor which hits its people with tax on lower levels of income than Virginia.
By doubling Virginia’s standard deduction, joint filers with one child would be allowed $14,790 in tax free income.

Doubling the standard deductions in Virginia is preferable to doing nothing.
The Virginia Society of Certified Public Accountants has encouraged the Virginia General Assembly to make no rapid policy decisions, to allow the 2018 tax increase to happen and to segregate and hold the funds for future tax reform. That does nothing to prevent or compensate for the tax increase in 2018 and will require faith that the legislators do not spend the money while waiting for future tax decisions.  This is a risky proposition at best.
This is also preferable to the idea proposed by Governor Ralph Northam, which is to keep all the higher tax revenue and reduce the impact on lower-income working families by giving them annual grants through the Earned Income Tax Credit process.  The EITC is complicated and not everybody who is eligible files for it. The higher standard deduction would be easy to implement and could immediately be reflected in the payroll withholding tables.  It puts more cash in every paycheck instead of giving someone a once-per-year refund for which they must apply.
This is preferable to deviating from the rules of tax conformity.  Some have proposed allowing Virginians to take itemized deductions on the state level while using the standard deduction on the federal level.    This would focus the benefits of reform a bit more closely on those impacted by the federal changes, but it still isn’t a perfect return of the money and the process remains overly complicated.
How much money does doubling the personal exemptions save taxpayers?  It would save an individual taxpayer $172.50 and a couple $345. The Virginia Department of Taxation has estimated it would return $440 million, which tracks very closely to the additional revenue expected from individual (but not corporate) tax returns.
At the low end of the economic scale, most have always taken the standard deduction, and this provides a tax break for everyone who continues this.  At the high end of the scale, many wealthy families will still have plenty of deductions to itemize and will continue to do so in their tax filings. This proposed change does not impact them.
The debate is over whether and how best to help the lower and middle-class family with two incomes and some level of deductions between the state and federal standard deductions.  Skip the paperwork required by the Governor’s idea and the complicated steps in the itemized deduction approach and just give them another $3,000 for an individual and $6,000 for a couple free from tax. This is better policy, simpler to implement, and impacts everyone.
There are other ideas for tax reform that will be outlined by the Thomas Jefferson Institute over the next few weeks, and business taxes need attention as well.  With the windfall coming into the state treasury from federal tax reform growing to $950 million in future years and hundreds of millions more being generated by a growing economy, comprehensive tax reform would improve Virginia’s competitive position.  In the short term we need to bring our tax code into the 21st century with a reasonable standard deduction.

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Failing Richmond Schools Doubling Down on Failing Policies

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The Richmond Public School System is in crisis, roiled by two independent audits and the publication of new state data showing that the administration is hobbled by rampant inefficiency, there are deep and pervasive achievement gaps between white students and black and Hispanic students, and the high school dropout rate is the highest in Virginia.
The sense of urgency is welcome. The school system has been failing its students for many years. But the major players — school board members and school administrators — seem to be drawing the wrong conclusions. Judging from news accounts, educational power brokers are doubling down on their commitment to “restorative,” or therapeutic, disciplinary policies designed to reduce “inequities.”
From flawed assumptions flow flawed policy prescriptions. These policies, I predict, will backfire. The restorative justice approach to school discipline will make the racial gap worse by disrupting the education of minority students who come to school motivated to learn. Captive to progressive dogma, Richmond public school officials are blind to the nature of the problem. That dogma was captured perfectly in a quote from the new school superintendent Jason Kamras, who said: “There’s nothing wrong with the kids in RPS. We, the adults who are charged with caring for them, have not done right by them for too many years.”
It’s true enough that the adults have failed spectacularly. As documented by one of the audits Kamras commissioned, the administration is riddled with inefficiency. Employees aren’t fulfilling basic tasks, for instance, such as building inspections, contributing to the disgraceful deterioration of the city’s aging school buildings. Richmond allocates significantly more per student on operational expenditures than neighboring Henrico and Chesterfield Counties — $10,973 in 2014 compared to $8,879 and $8,958 respectively — yet its physical plant often is in atrocious condition.
Unfortunately, there is plenty wrong with the kids, too. A large percentage come from economically disadvantaged backgrounds, and many are categorized as having learning disabilities. Describing the students as “economically disadvantaged” really doesn’t tell the whole story. Most “economically disadvantaged” kids also are socially disadvantaged. The problem isn’t material poverty, it’s social breakdown. The kids live in single-mother households; many if not most have absentee fathers. Many are subject to child abuse and neglect, often at the hands of live-in boyfriends. Their domestic lives often are chaotic. They receive little educational guidance or encouragement at home. Tragically, these dismal realities affect students’ success at school.
But look how the social-breakdown problem, when viewed through the social-justice paradigm, is translated into a racial issue (and here I quote the Richmond Times-Dispatch’s summary of an audit performed by The Education Trust):
The audits found major inequities in the district’s academics, ranging from suspension rates that disproportionately affect students of color to white students having better access to advanced courses….
The Education Trust’s report, which focused on academic equity, found that nearly 1 in 6 students were suspended out of school at least once in 2017 and 1 in 5 students were chronically absent. The report also found that elementary and middle schools with a population that skews white are much more likely to have students enrolled in gifted education programs and algebra in eighth grade, which have been shown to better prepare students for college and careers.
What’s the answer? Round up truant kids and get them back into school. Change policies to reduce the number of suspensions and other disciplinary actions. Get teachers to engage with problem students rather than expel them from the classroom. Judging by a Michael Paul Williams column in the Times-Dispatch, the RPS administration is doubling down on restorative justice in the expectation of reducing the inequities. Writes Williams: Kamras, to his credit, appears focused on attacking those inequities. The hiring of Ram Bhagat to implement restorative justice practices and to develop a trauma-informed approach to education was inspired. Bhagat, a retired RPS teacher with substantial community capital, is the district’s manager of School Climate and Culture Strategy.
The power of ideology to blind people to reality is on full display in the Richmond public schools. Let’s start with the obvious: the fact that one in five Richmond students was chronically absent in 2016-17. The “inequities” decried by The Education Trust and school officials stems from that fact. Clearly, a high percentage of Richmond students — almost all of whom come from “economically” disadvantaged backgrounds — are not committed to advancing their education. Rounding up these kids and getting them back into school does not improve their motivation. Most of these students have already fallen far behind their classmates academically. They find class either boring, frustrating or threatening because, in many cases, they can’t keep up with what’s going on. Thus, they “act out.” Teachers spend more time focused on the problem students and less time with students wanting to learn.
By contrast, most white kids in Richmond public schools come from affluent families that place an emphasis on education. Parents have the wherewithal to invest considerable time at home reading to their children, teaching the alphabet, helping them with homework when they’re younger, and leaning on them do their homework when they’re older. Needless to say, chronically absent students aren’t attending the advanced classes, so white students are largely insulated from the consequences of politically correct policies that undermine order.
Here’s the real tragedy: There are thousands of black kids whose families value education and who expend great effort — often in the face of greater social obstacles than their white peers — to learn. Last year 80% of Richmond students were not chronically absent. Roughly half of Richmond’s black students passed their reading and math SOL assessments. One in twenty earned assessment scores that ranked them as advanced. I submit that very few of these black achievers are among those who skip school, skip class, and disrupt teachers when they are in class. To the contrary, these are the students who are cheated by the erosion of order in schools and classrooms. These are the ones who receive fewer hours of instruction every week while teachers are distracted by trouble makers. But no one speaks for them.
What can we expect as the flailing leadership of Richmond Public Schools doubles down on restorative justice? More disruptive students in classrooms. More distracted teachers. More demoralized teachers, who quit or transfer out of inner-city schools. More students short-changed of a full education. A continued erosion of student assessment scores. And more anguished hand-wringing by educators committed to the social justice paradigm whose policy prescriptions continue to fail.
(This article first ran in Bacons Rebellion on October 2, 2018.)
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Texas wins again for farmers, landowners

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On Sept 12 a U.S. District Court judge in Galveston, TX issued an order which once again shows the power of the states in stopping overreaching EPA regulation.
Many, including myself, have written volumes about the term “Water of the United States” (WOTUS), an effort by the Obama administration to centralize and control U.S. waters through the Environmental Protection Agency (EPA).
The Texas court again enjoined or stopped WOTUS being applied in Louisiana, Mississippi and Texas. The court concluded there is a substantial likelihood the states will prevail against EPA’s rule, because the merits of the arguments fall on agriculture’s side.
The court determined EPA’s rule would pose a substantial threat to the states, and they would likely suffer irreparable injury if an injunction was not issued against EPA to stop it from violating individual’s rights.
The court also ruled that WOTUS would cause a threatened injury which outweighed EPA’s claim of threatened harm.
Finally, the court believed that granting the Texas request for a preliminary injunction is in the public’s interest.
Much has been written about EPA’s attempt to regulate virtually every intermittent stream or depression in land such as vernal pools or prairie potholes. The court slams EPA by saying “At this early stage in the proceedings, the strength of the States’ should not be overstated.”
The court order noted that facts were available to support the granting of a preliminary injunction stopping EPA. The court stated, “…it is the fourth factor pertaining to the public’s interest in this matter that tipped the balance in favor of granting an injunction – and did so to an overwhelming degree.”
A powerful statement
One needs to think about this powerful statement from the Texas judge. He is clearly stating that what the Obama EPA administration proposed was terrible and overreaching and was simply a clear violation of the law.
Remember, this battle against EPA and its definition of WOTUS began June 29, 2015. The WOTUS rule has now been stopped in its tracks in 26 states. This court and others clearly are pointing out to EPA its proposal is simply outside common sense and clearly outside the law of the Clean Water Act (CWA).
The court order states, “Were the Court not to temporarily enjoin the [WOTUS] Rule now, it risks asking the states, their governmental subdivision, and their citizens to expend valuable resources and time operationalizing a rule that may not survive judicial review.”
This case is not a total victory for those opposing the Obama administration rule. It is recognized there needs to be a permanent decision regarding the Rule’s constitutionality. So future decisions both by the Trump administration EPA and the courts will determine EPA’s jurisdiction over waters which appear on our land and particularly farm land and forests.
The court also provided a thoughtful set of comments about why it is inappropriate for it to issue a nationwide preliminary injunction as compared to recent U. S. district courts issuing nationwide injunctions against President Trump.
It is refreshing to review a district judge’s opinion which actually applies the law as it is to be interpreted. The battle with EPA is not over by a long shot, but U.S. district court judges, for a change, appear to be following the law and that is very helpful to all involved in agriculture. Not all water falling on the ground falls under EPA’s jurisdiction.
(This article first ran in the September 25, 2018 issue of Farm Futures.)
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Trucks-Only Tolling a Disturbing Trend

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Two more states may follow the lead of Rhode Island by imposing tolls (or increased toll rates) on heavy trucks, so as to invest the proceeds in highway improvements that will benefit all highway users. A study under way by Virginia DOT on improvements to I-81 has suggested up to $3 billion worth of improvements, with truck-only tolls as part of the funding package. And in Indiana, Gov. Eric Holcomb is proceeding with a plan to increase truck tolls on the Indiana Toll Road to pay for $1 billion worth of infrastructure improvements.
On tolled highways, heavy trucks generally pay toll rates that are three to four times the rate paid by passenger vehicles. That may or may not be enough to cover the full costs of the wear and tear caused by the heaviest vehicles, but the principle that trucks should pay more than cars is long-established. However, Rhode Island’s Rhode Works plan imposes tolls only on heavy trucks to pay for an array of bridge improvements, on both Interstates and non-Interstates. FHWA approved this, under a provision of USC Title 23, Section 129 that permits the replacement of non-tolled bridges on Interstates with tolled bridges. The American Trucking Associations recently filed suit in federal court, on grounds that singling out heavy trucks to pay tolls discriminates against them and is, therefore, an interference with interstate commerce under the Constitution. ATA has not objected to the underlying statute that permits toll-financed replacements for non-tolled Interstate bridges.
Virginia DOT has a study under way, as requested by recent state legislation, on possible improvements to I-81, and potential sources of funding. So far, the study has come up with some $3 billion in possible improvements, though surprisingly these include adding a third lane each way on less than 10 percent of this critically important truck route. Up to 40 percent of the traffic on I-81 in Virginia is semi-trucks, and FHWA projections indicate much higher truck traffic over the next 20 years.
I-81 is an obvious candidate for dedicated truck lanes along its full length in Virginia. In Reason Foundation’s 2013 Interstate 2.0 study, our analysis of FHWA Freight Analysis Framework data identified I-81 as one of the four multi-state corridors most needing dedicated truck lanes in coming decades (along with I-40, I-70, and I-80). All users of I-81 would benefit from the addition of DTLs, so all should pay tolls to cover the costs of this addition. In its un-wisdom, the Virginia legislature excluded all-vehicle tolling from the scope of the current I-81 study. So in addition to truck-only tolls, the funding sources being looked into are a regional gas tax and a retail sales tax. At the maximum levels being considered, the tolls/gas-tax/sales-tax combination is estimated to generate $370 million per year. What ever happened to users-pay/users-benefit?
The Indiana plan apparently does not require legislation. The state has negotiated with the Indiana Toll Road Concession Company to make three annual payments to the state over three years totaling $1 billion, which the company will recover via a 35 percent increase in tolls paid by trucks, from Class 3 (e.g., dump trucks) through Class 8 (e.g., 18-wheelers). The state plans to use the billion dollars on infrastructure improvements as follows:

  • $600 million to complete the missing link in I-69;
  • $190 million for upgrades to three state highways;
  • $100 million for a new program of grants for broadband; and,
  • $20 million to assist Indianapolis International Airport to expand international service.

Once again, the principle of users-pay/users-benefit is being seriously breached—and this in the state that has been shaping up as having the most comprehensive approach to toll-financed reconstruction and modernization of its aging Interstate highways.
Toll revenues should be used to provide improved highway infrastructure for those who pay the tolls. Singling out trucks is bad policy, per se. But it also risks further alienating the trucking industry from the best hope for rebuilding and modernizing the Interstate highway network that they depend on—toll-financed replacement of the original 1950s system.
(This article first ran in the September issue of Surface Transportation Innovations.)
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