The latest from Augusta

The Waynesboro News-Virginian (via SWAC Girl) confirms that Augusta’s assessments are economic museum pieces (emphasis added):

Before another packed house Wednesday at the government center in Verona, supervisors gave Pyles approval to review the methodology and work of Blue Ridge Mass Appraisal Company, the Staunton-based outfit that remarkably increased county residential property values by an average of 27.7 percent over four years. Staunton and Waynesboro values increased less than 5 percent over two years. Elsewhere, in Albemarle and Chesterfield counties, values declined.

Pyles also wants to review sales data used by Blue Ridge. We took a look at sales figures for a story last month. Here is what we found: Home sales peaked in Augusta County and Waynesboro in June 2007, when 174 units were sold and the median sales price was $206,450. By last September, the local market was chugging to a near-standstill. Volume dipped to 72 units and the median prices tumbled to $149,500, a drop of more than a fourth over the high in June 2007.

A bit of perspective: Blue Ridge conducted the reassessment starting in summer 2007, or roughly at the time sales and prices were spiking. The company finished its work slightly more than a year later, reporting that values had increased by a third.

Now, normally, something like this would cause some raised eyebrows, and angry word ot two, and shift in discussion to the tax rate (and making sure it’s equalized).

However, in Augusta, assessments are every four years, not two or one.  Thus, the fact that for many assessments, the boom years (2005-7) were included but not the bust year (2008).  The resulting figures can be nice for nostalgia about the good old days of the property boom, but for measure of current reality they fall woefully short.  Even worse, Augusta’s four year cycle ensure these assessments are locked in place until 2013.

This is why I support going back to the 2005 assesment for this year and redoing them entirely.  Two-year and one-year counties already factored the boom times into their previous assessments, and have either seen the assessments fall or (in the case of my home county – Spotsylvania) will likely see them fall next year.  By contrast, thousands of Augustans – if the status quo remains - would be taxed as late as 2012 with property values that were determined before the recession began.

The best way for Augusta to fix this is to do it over again this year, and the best way for Augusta to make sure it doesn’t happen again is to shift from a four-year cycle to a two-year or one-year cycle.

Sadly, some county officials out there are treating the assessment like they won the lottery (WVN again):

But a residue of recalcitrant thickness remains. County school board Chairman David Shiflett showed up at the meeting Wednesday to urge supervisors to proceed with the reassessment and to restore slashed money to the county school budget. Be reminded, Chairman Shiflett, there’s a recession on, which requires tightened spending. Let schools and government join the hard reality occupied by the rest of world.

Keep in mind, Augusta hasn’t equalized its tax rate since 1983.  So voters have to wonder about their elected officials when at least one of them is determined to spend the new tax money already.

Finally, the only cost Augusta would bear for skipping this assessment and sticking with the 2005 version until the do-over would be completed is the loss of its piece of the state’s alcohol profits (WVN now puts that at $40,000).  That’s a small price to pay for doing the constituents right (especially since the state shouldn’t be in the liquor business anyway).

House version of sales tax hike amended, but how? (UPDATE: Never mind)

UPDATE: Turns out the Putney amendment had nothing to do with the sales tax hike.  The tax hike itself sailed through (94-6).

For those interested, the six who refused to go along with this were: Clifford Athey, Ben Cline, Mark Cole, Jeff Frederick, Franklin Hall, and Jackson Miller.  All were Republicans except Hall.

Consider this an open forum post, for anyone close enough to the HoD to explain what just happened.

According to the House “Mini-Journal,” the Budget Amendment  that contained the House version of the sales tax hike (Item 4-13.00) was amended at the request of Approprations Committee Chair Lacey Putney.

It does not say how it was amended.  The last time a bad idea went to the House floor and was “amended” (the old HB6055), the tax increases were stripped from the bill.  Did it happen again?

If any of you, dear readers, can answer this question – What was Puntey’s floor amendment? - please do so in the comments.

Many thanks.

Rasmussen has a poll for each party

If you’re a Democrat, dear reader, and are looking for encouragement about American reaction to the stimulus, then Rasmussen is the pollster for you.

By contrast, if you’re a Republican, then your pollster of choice is, um, Rasmussen.

There are competing explanations.  Either the poll that puts the Republicans in a statistical tie with the Dems on the Congressional ballot is old because it was conducted before the president’s Monday night presser, or the slight uptick in support for the stimulus from said presser comes from Democrats who had soured on it previously.

Either way, what is fairly certain is that the Republican Party is suddenly in far better shape than it could have imagined just three weeks ago.

Jeff Frederick to fight sales tax increase on House floor

While Richmond was distracted by the State Senate, I got a hold of Jeff Frederick yesterday and asked him about the sales tax-hike fiasco.  He informed me that he would object to that portion of the budget and fight it when it gets to the House floor (which should be tomorrow).

While I know the Northam-Twitter-Griffith brouhaha is a juicy story, we cannot let this tax increase get out of Richmond alive.  So, dear readers (and especially my fellow bloggers) kindly let Richmond know that killing this is the top priority.

Health care rationing hidden in the Obamnibus

Wormed deep into the “stimulus” (Bloomberg):

One new bureaucracy, the National Coordinator of Health Information Technology, will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective. The goal is to reduce costs and “guide” your doctor’s decisions (442, 446).

Who was the inspiration for this?  Why. Mr. Tax-Cheat himself, Tom Daschle (the other guy is Secretary Tax-Cheat)!

These provisions in the stimulus bill are virtually identical to what Daschle prescribed in his 2008 book, “Critical: What We Can Do About the Health-Care Crisis.” According to Daschle, doctors have to give up autonomy and “learn to operate less like solo practitioners.”

Here’s what else Daschle had in mind:

The goal, Daschle’s book explained, is to slow the development and use of new medications and technologies because they are driving up costs. He praises Europeans for being more willing to accept “hopeless diagnoses” and “forgo experimental treatments,” and he chastises Americans for expecting too much from the health-care system.

The author of the column (more on her later) goes on to explain the model for this “Coordinator” (namely, the disaster known in Britain as the National Health Service) and notes that the “stimulus” (I prefer Obamnibus) “allocates more funding for this bureaucracy than for the Army, Navy, Marines, and Air Force combined.”

It’s the last paragraph, I think, that provides the most important (and least understood) perspective (emphasis added):

The health-care industry is the largest employer in the U.S. It produces almost 17 percent of the nation’s gross domestic product. Yet the bill treats health care the way European governments do: as a cost problem instead of a growth industry. Imagine limiting growth and innovation in the electronics or auto industry during this downturn. This stimulus is dangerous to your health and the economy.

We almost never hear about what the health care industry does for the economy – only what it does to the economy.  The author makes a crucial point here.

All of that said, the most interesting part about this entire column (to me) was the author herself: Betsy McCaughey.  For those who did not live near New York in the 1990s, McCaughey was a health industry expert whose criticism of “Hillarycare” so impressed the state GOP that they made her George Pataki’s running mate.  Thus, when he squeaked past Mario Cuomo in 1994, McCaughey became Lieutenant Governor.

Her political career was less than stellar; in fact, she alienated the local GOP so much that she actually switched parties before being dropped in 1998.  She left office in January 1999, presumably never to be seen or heard again.

So the president has (albeit accidentally) done something many New Yorkers and other New York are natives never thought was possible – he has rehabilitated Besty McCaughey!

Nooooooo! (UPDATE: Actually, it’s worse than I thought!)

SB987 has been wormed into both budget bills (House and Senate). Norm at TQ has the gory details:

The Senate passed a bill to bring back the pre-payment of sales taxes last week. There was some hope the House wouldn’t go along.

Fat chance:

Though they take different approaches, the House Appropriations and Senate Finance committees rely on a one-time burst of $100 million that would come through stepped-up collections of sales tax from the biggest retailers.

It’s a tax hike only politicians can love. Plus, it has a bipartisan stamp of approval!

Still, there was one bit of humor in it all (Richmond Times-Dispatch):

Senate Minority Leader Walter A. Stosch, R-Henrico, criticized that feature as “borrowing money against the future.”

This would be the same Walter Stosch who voted for the very same “feature” - not once (LIS VA), but twice (LIS VA).

Humor aside, it looks like only two people can stop this now: Bill Howell and Bob McDonnell.  If either of them publicly came out against it, it would instantly lose Republican support.  Sure, Howell would have to undercut his own Appropriations Committee Chairman, but that’s the price to pay for fixing a mistake.

UPDATE: It took me a while to get to the differing versions of this for each chamber.  The Senate Finance Committee simply grafted SB987 into the Budget (Senate Finance Committee: Resources Subcommittee).  However, the House plan is actually worse.  Here’s why.

The House plan (House Appropriations Subcommittee on Technology Oversight and Government Activities) demands large retailers go to a bimonthly payment system.  This forces them to make one additional payment in June, much like the SB987 – except that it’s only for the actual amount accrued in the first half of June, not a projected June total like SB987.

However, it is still and extra tax payment forced upon retailers in the first year.  Thus it is still a tax increase, albeit a smaller one.

Or at least it would be a smalller one if the House had held to the same threshhold as the Senate.  Under SB987, this pre-payment scheme didn’t hit a retailer unless and until sales hit $50 million.  The House lowered the threshhold to $20 million.

Last but certainly not least, the House capped the tax collection discount for retailers at $800 per month; no such cap exists in the Senate version.  Thus, the House version actually wrings more money out of businesses than the Senate version does (over $11 million more).

Again, either Bill Howell has to reverse the course set by the Appropriations Committee, or Bob McDonnell must publicly oppose it (Bill Bolling could, too, but I don’t think he would have the impact McDonnell would).  The retail discount cap clinches it, this is a tax increase, and it must be stopped.

SB 987 – A one-time tax hike is still a tax hike (UPDATED)

SB987, in its current form (LIS Virginia), seems innocuous enough: a shift in the deadline for retailers to pay sales taxes from July to June.  However, the innocent appearance is a deception: it’s a one-time tax increase on Virginia business.

The exact term for SB987 is “pre-payment of state sales taxes.”  Norm over at Tertium Quids details the history of this little farce (emphasis added).

A couple of years ago, TQ helped lead an effort to end the pre-payment of state sales taxes. Here’s how we framed the argument:

To balance the budget for fiscal year 2002 (which ended in June), the state government required businesses to make two payments of their sales and use taxes (the monthly payment due in June, plus an advanced payment for July). It was supposed to be a one-time event, but the following year, the legislature made this prepayment an annual event.

This is like your mortgage company telling you it wants two payments this month because it is having trouble balancing its books. Your mortgage company is not allowed to pull this trick, and the state government should not be allowed to do it either.

Well here we are, just two years later, and what does the Senate want to do? Bring back sales tax pre-payments.

What one must realize is this: the pre-payment would come before the end of the fiscal year (in June) rather than after it (in July).  While that may seem like just a month’s movement, in reality it shifts every tax payment up one fiscal year – and turns FY09 into a two-tax-payment year (UPDATE: thirteen-tax-payment year, this tax is collected monthly, not annually; mea culpa).

In other words, Virginia retail business are getting hit with a one-time “revenue enhancer” – the politicians’ code words for a tax hike.

In a move reminiscent of the bad old days, Senate Republicans split like a ripe melon (LIS VA), with half of them voting in favor of this (including all but one of them on the Senate Finance Committee - LIS VA).

Norm ends with an ominous question:

Will it pass the House? Keep an eye on SB 987. It could be the tax hike some have feared Republicans will embrace.

Mr. Speaker, if you happen to be reading this, please make sure this bill dies a quick death.  If you’re worried about the reaction in the other chamber, take another look at the votes: Emmett Hanger voted against it twice.  If Emmett Hanger can’t bring himself to vote for a tax increase, it has no business anywhere in the 804 area code.

Rasmussen poll: great news for McDonnell, terrible news for Deeds

Back in December, when the first Rasmussen poll on Election 2009 was released, I expressed some caution about Bob McDonnell’s position, due mainly to Tim Kaine and Creigh Deeds’ favorability ratings.

Two months later, Kaine favorability ratings have risen, but McDonnell has improved across the board (Rasmussen):

McDonnell, who announced this week that he will step down from his post on February 20 to campaign full-time for governor, bested only one of the three Democrats in early December.

Now, the latest Rasmussen Reports telephone survey shows the lone Republican gubernatorial candidate topping his best-known opponent, Terry McAuliffe, by seven points, 42% to 35%. In December, he held a five-point edge over McAuliffe, a longtime Clinton confidant, major Democratic fund-raiser and former national party chairman.

McDonnell is even further ahead of Rep. R. Creigh Deeds of Bath County – 39% to 30%. The two men were tied two months ago.

Brian J. Moran, a former state delegate from Alexandria, led McDonnell by four points in the earlier survey but now trails by three, 39% to 36%.

With the 4.5% margin of error, Moran and McDonnell are statistically tied, but McDonnell’s on the upside of the MOE, up from the down side in December.

Interestingly, Deeds favorable-unfavorable difference went from +13 to +1 (Too Conservative).  Moran’s also “slipped,” but his movement was within the MOE.  Stunningly, Terry McAuliffe also slipped here despite being the only guy who has television ads out.

So what do the numbers tell us?  Sure, it’s early, but one “surprising” thing comes through: the “swing” region is Northern Virginia.

In a “normal” election, Deeds would have the advantage because of his rural, western roots, whereas Moran and McAuliffe would need to branch out beyond the NoVa base.  Trouble is, Northern Virginia has never been the solid base the Democrats think it is.  They’ve just benefited from a slew of Republicans ill-equipped to do well there (Earley, Bush, Kilgore, and Allen – Bush obviously benefited from a strong performance downstate to win a anyway).  John McCain, by contrast, ran into an anti-Republican buzzsaw that likely had more to do with Lehman Brothers and his reaction to it than anything else (more on Election 2008 in a later post).

Now, with the Virginia GOP bereft of tax increases for the first time in nine years, things are looking up for the party and its nominee – including in Northern Virginia, where voters are clearly willing to look at McDonnell.  It’s the only explanation for why both NoVa Dems are doing better against him than Deeds.

However, if Northern Virginia has become a battleground, than that means McDonnell has to deal with the ghost of HB3202.  If Moran or Deeds wins the nomination, this won’t look like a huge problem: both of them voted initially for a statewide tax increase in 2007, and both also supported Kaine’s version of the monstrosity – the version tossed out by the State Supreme Court.  However, it could still depress the Republican base and turn away the social-liberal/economic-conservative voters that are concentrated in the suburbs of Washington, DC (and the Hampton Roads area).

However, if Terry Mac wins the nod, we can expect to hear the number 3202 often enough for pre-schoolers to substitute it for 4 in their counting exercises.  Terry is no fool; and only a fool would have missed how HB3202 was the millstone that drowned Republicans in NoVa and HR.

McDonnell needs to be ready for this.  He needs to disavow HB3202 and adopt HB1579 (the Oder bill) as his preferred transportation alternative.  The Supreme Court gave Virginia Republicans a heaven-sent opportunity to correct their mistake.  Bob McDonnell is one of the very few Republicans who hasn’t taken that opportunity yet.  If he does take it (and if the General Assembly Republicans hold firm against tax increases), he’ll win.

If he doesn’t, it will add unnecessary drama into this race (if the GA GOP caves on taxes – which I admit is unlikely now – McDonnell is in real trouble).

Let’s not forget, Jerry Kilgore had a lead in February, too.  Nine months later, Tim Kaine played him like a violin on the tax issue (a painful irony given Kaine’s recent addiction to tobacco taxes), romped to victory, and nearly dragged Deeds across the finish line on his coattails.

McDonnell should remember that, and act accordingly.

Also blogging on this: Bearing Drift and Write Side

What if you held a tax revolt and EVERYBODY came?

Lynn Mitchell (a.k.a. SWAC Girl) is in the eye of the storm.  She has become a leader in Virginia’s first tax revolt in a dozen years.

Augusta Citizens Against Unjust Assessments (ACAUA) brought overflow crowds to their inaugural meeting Tuesday night (Lynn has her account here, with pictures here, here, here, and here).  The next Board of Supervisors meeting (March 11) is sure to be a barnburner.

Up to this point, I was of the belief that a simple equalized tax rate would go a long way to solving the problem.  Then I read this from the Waynesboro News-Virginian:

The weary process of assessing almost 39,000 properties in Augusta County began in summer 2007 and stretched to the end of last year, extending over periods of buoyancy and bust in the local real estate market.

In other words, more than a few of Augusta’s assessments are more than a year and a half old and date back to the days when the housing bubble was still intact.  This isn’t an assessment, it’s a statistical museum piece.

Here in Spotsylvania, which has over 50% more people in it than Augusta, we do our assessments every two years.  Augusta does them every four.  That has to change.

From what I can tell (thanks to WVN), the only penalty Augusta would face from suspending assessments one year would be $38,000 in lost dividend payments from Alcoholic Beverage Control.  Given that the state shouldn’t be in the hard liquor business anyway, the Augusta BOS can chalk that up to the price of free-market principles, suspend all assessments, and find a firm that doesn’t take a year and a half to determine property values.  From there, do assessments every two years, rather than four.

The above plan would thus have everyone assessed at the same temporal point in the market, and the new cycle would prevent things like this from having a lasting impact.  As it is, the poor souls who had their property checked in the summer of 2007 would be stuck with a laughable assessment until 2013.

The question is, will the Board of Supervisors (especially the four Republicans who make up the majority) join with the lone Democrat – Tracy Pyles, who continues to make my late grandfather proud - and do what is right?  Or are they blinded by the revenue windfall?

We will see.  We will all see.  As I’ve mentioned before, Augusta is a test case.  If a county this Republican gets whacked with a tax hike, counties and cities all around the Commonwealth will use it as an example to browbeat their taxpaying constituents into submission.

That cannot be allowed to happen.

The American people are souring on the “stimulus”

For the first time, more American oppose the Obamnibus than support it (Rasmussen):

For the first time, a plurality of voters nationwide oppose the $800-billion-plus plan.

The latest Rasmussen Reports national telephone survey found that 37% favor the legislation, 43% are opposed, and 20% are not sure.

On top of that, 50% of Americans now think the “stimulus” could make things worse (Rasmussen again).

Sixteen years ago, a new Democrat in the White House ran the Ship of State aground (politically) on a stimulus package run amok.  It was the harbinger of two brutal years for the Democrats – resulting in the end of their four-decade control of the House of Representatives.

The president might want to bring in his SecState for a little walk down memory lane.  If he’s not careful, history could repeat itself.