How to survive raising taxes

The three incumbents running for Williamsburg City Council were all re-elected Tuesday, despite the fact that next Thursday they will almost certainly approve a budget that increases taxes, possibly multiple taxes.

When City Manager Jack Tuttle proposed a budget two months ago that included increases in the real estate tax rate, personal property tax rate, cigarette tax and in EMS fees, I wrote that he'd "thrown the three incumbents up for re-election a live hand grenade."

When it became apparent that only one challenger would run, with three seats up for grabs, there seemed to be a good chance that Mayor Clyde Haulman, Vice Mayor Paul Freiling and City Councilwoman Judy Knudson would end up in a game of hot potato with that grenade, with whoever got caught holding it getting an unpleasant surprise.

Challenger Ginger Crapse, though in her own words "a rank amateur" as a politician, latched on to the tax increase issue with laser-like focus and showed message discipline worthy of Jim "No Car Tax" Gilmore or George "Liberal, Lenient, Parole System" Allen.

Crapse even got some odd "good luck" on the campaign's final weekend. She was out campaigning door to door when she saw a house on fire and ran into it to alert the residents. While Crapse may have dramatized her role in the incident a little -- some published reports had her "kicking in the door," which didn't happen, and the residents said they already knew there was a fire -- the fact remains that Crapse saw a burning building and ran into it to try to help people. She ran to the sound of the guns. A lot of people would not have done that.

But neither anti-tax fervor nor firefighting helped Crapse much on Election Day. In a very low turnout election, she finished nearly 300 votes behind Knudson, 400 behind Haulman and Freiling.

And it wasn't really a surprise.

As the campaign played out, two things were obvious -- that Williamsburg didn't care too much about this election and that Crapse had failed to spark a tax revolt.

The lack of enthusiasm for the election was likely because for the first time in five election cycles there was no candidate from the College of William & Mary. The presence of student candidates had boosted participation in Council elections by students (who wanted to elect one of their own) and by townies (who, by and large, wanted to prevent that from happening). When then-student Scott Foster broke through in 2010, leading the ticket and amassing more votes for Council than anyone has in the last ten years, the urgency went out of that effort.

So turnout dropped to under 15%. That could have helped Crapse. But it ended up making no difference.

Why didn't her anti-tax message resonate more with Williamsburg voters?

Some of the reasons are peculiar to Williamsburg. The city has a very low 54 cents per $100 real estate tax rate. It's lower than either of the adjacent counties. That may be a situation that's unique in Virginia. The reason Williamsburg has such a low rate is that it relies much less on the real estate tax to fund government than other Virginia localities. For years, tourism-related taxes, principally the hotel room tax and the meals tax, have provided more than half of the city's budget. That percentage has fallen some during the Great Recession, but Williamsburg still depends less on the real estate tax than most localities.

A second uniquely Williamsburg factor is that city voters are spoiled. For their Yugo level of real estate taxes they've enjoyed a Cadillac level of government services over the years, with tourists footing the bill. They don't want to lose those services.

As an example, in most localities in Virginia, and probably in most in the United States, garbage pickup is once a week. You pay a fee for it and you have to pull your can out to the street. Until two years ago, Williamsburg had two garbage pickups a week, for no fee and the garbage men would go around to the side or the back of your house to get the trash and then take the empty cans back.

When the city cut back to one pickup a week two years ago, still with no fee and still without requiring residents to pull the cans to the street, many residents reacted as if the world would end. It didn't and the city saved about $800,000.

So, I think it's fair to note that Williamsburg voters are more predisposed to favor increased taxes to reduced services than most across the state.

Still there are some lessons from Williamsburg that could be applicable to other local government or even the state when tax increases are needed. And, yes, sometimes they are needed.

1. Don't make a tax increase the first option - It certainly wasn't in Williamsburg, which last raised taxes more than 20 years ago. City Council has cut the budget in four of the past five years to deal with the recession. They've cut services. They've cut personnel. They've cut back on employee benefits. As a result the proposed Fiscal Year 2013 budget, even with the tax increase, is smaller than the FY 2009 budget.

2. Explain why it's necessary -- In Williamsburg a tax increase was needed because the city got hit with a perfect storm of forced expenditures and reduced revenues at the same time. State-mandated increases in VRS contributions from city employees and for school teachers hit the same year that the city's percentage of children in the Williamsburg-James City County school system went up for the first time in 20 years, likely because the recession left some folks who would have bought houses in one of the counties renting in the city. The city's costs for employee healthcare were also up. In addition the city's real estate revenues were off because of reduced assessments. And the room, sales and meals taxes, while recovering, have yet to regain pre-recession levels. The end result was a hole in the budget of about $900,000, which the tax increases and further cuts in expenditures would fill.

3. If you have to raise taxes make it as little as possible - Taking a page out of the General Assembly's book, the current Council asked Tuttle and Finance Director Phil Serra to come back with more optimistic projections for room and meals tax revenue, which would cut about $300,000 out of the hole to be filled. That's possible because, as Crapse rightly noted in the campaign, for years Tuttle and Serra have lowballed those revenue estimates. That's a conservative form of budgeting that has led to the city generally outperforming the budget and guaranteed that any end-of-the-fiscal-year surprises were good ones. Council may yet regret this decision.

4.  All taxes are not created equal - The proposed budget include a 3-cent increases in the real estate tax, a 50-cent hike in the personal property tax and a nickel increase in the current 25-cents per pack city cigarette tax. To the extent that any organized opposition has been raised to the increases, the jumps on the personal property tax and the cigarette tax have been most strongly opposed. Businesses in the city feel that the personal property tax hike hits them disproportionately because they pay the tax on more categories of property than private citizens. Freiling, at least, has publicly agreed with this and might favor a larger real estate increase and smaller personal property tax increase. One city convenience store has said the cigarette tax already put them at a competitive disadvantage to stores in the counties, which can't levy such a tax. They fear an increase would put them at a bigger disadvantage. As a smoker who spends a lot of time in the area, I'd be surprised if people are price shopping for cigarettes. Especially since it's almost impossible to remember exactly where the city stops and the counties start. Look at Williamsburg on a map some time; it's shaped like an amoeba.

5. Play your cards close to the vest - Although all three incumbents made it clear they "weren't necessarily opposed to a tax increase," none of them exactly jumped out in front and led the parade for it. Haulman at one point said, "This isn't our budget, it's the city manager's budget." All three said it was "too early to tell" about the tax increase because of lingering uncertainty about the state budget and the school system's budget. Freiling probably came the closest to advocating the tax increase when he said the hole in the budget was so large that he couldn't see how the city could fill it "without some increases in revenue."
The bottom line was that the three incumbents knew the election was on May 1 and they didn't have to go on the record voting for a tax increase until May 10.

Is there a Senate deal that would help both sides?

With the opening of the Virginia General Assembly upon us in two days and with chaos threatening to reign in the Senate, is there a quasi-power sharing agreement that would satisfy by both sides and avoid a lot of aggravation?

There very well might be.

Democrats are claiming that Lt. Gov. Bill Bolling can't vote on organizing the Senate. Republicans claim that vote gives them the majority. Ironically, the two parties are taking the opposite positions that they took the last time the Senate was deadlocked 20-20, in 1996. At that time the lieutenant governor was a Democrat, Don Beyer.

A judge refused to grant an injunction against Bolling casting the tie-breaking vote because the issue was not "ripe," since he hadn't yet done so. The lawsuit filed by Democratic Caucus Chairman Sen. Donald McEachin is still in front of the court. If, really when, Bolling casts his tie-breaking vote, the Democrats could go back to court. Of course, that would require them to walk off the floor, denying a quorum in the Senate until the issue could be resolved. And that's complicated by the fact that Bolling, like the governor or a member of the legislature can't be compelled to answer to a civil suit during the General Assembly session.

So chaos could ensue.

But it's not necessary. Because there could be a deal that gives both sides part of what they want.

Bolling put out a well-reasoned memo dealing with what issues he believes he can cast a tie-breaking vote on and which he cannot. He believes that he can vote on organization, but not on issuing debt, constitutional amendments or final passage of the state budget. I think his analysis is right.

Which could cause problems for Republicans, as well as Democrats. They now need consensus with Democrats on the budget and they are unlikely to get it if Democrats feel that Republicans are trying to grab power they didn't win at the polls.

But there would seem to be a deal out there.

In recognition of their victory at the polls and Bolling's tie-breaking vote, Republicans would be recognized as the majority and control the floor. Sen. Tommy Norment would be the Majority Leader and Republicans would chair every committee.

But, reflecting what each side earned in November, instead of the 10-6 majorities Norment has talked about on committees, each side would have an equal number of seats on committees. This would allow Democrats to kill some bad social issues bills coming over from the House in committee, which probably wouldn't really make Norment, Bolling or Gov. Bob McDonnell -- who could avoid having to sign nutty social issues legislation while auditioning for the vice presidential nomination -- unhappy either.

Democrats would probably also want a pledge that Norment will not, as he's threatened, "revisit" last year's legislative redistricting. From a good public policy perspective, that's a good thing. Redistricting shouldn't be on the line in every election, to be engaged in whenever the majority changes.

In return, Democrats could probably agree to pass the incumbent protection Congressional redistricting plan that all the incumbent representatives signed off on last year. True some think that would lock in the current 8-3 Republican edge. I don't, because that edge isn't natural anyway. Virginia's not a 75% Republican state so there's no way the GOP will hold that kind of advantage long term. In the incumbent protection plan the 2nd District and, to a lesser extent, the 5th would remain "swingy." The 10th would also probably become a swing district once Rep. Frank Wolf retires. The Democrats could probably get a better deal out of the federal courts. They might still have that opportunity. Just because the "incumbent protection" plan passes the legislature doesn't mean it will clear the Obama Justice Department, which could very well prefer the Democratic plan which offered the possibility of electing another African-American to the U.S. House.
This is a deal that could satisfy both sides. Nobody gets everything they want. Nobody gives up everything. That's sort of the point of a "power sharing" agreement. And it's the best both sides can probably get and still get on with the people's business. Democrats will have to recognize that they have lost the majority. And Republicans will have to recognize that 20 seats in a 40-member body don't justify 63% of the committee seats.

Both sides will have to recognize that they will have to compromise and cooperate to handle the range of complex issues, from the budget to uranium mining to highway funding to support for public and higher education that constitute the real work of the 2012 legislative session.

Republicans take some of the fun out of 2012

 The fact that Newt Gingrich is leading the polls in the Virginia Republican Primary but didn't gather enough signatures to get on the ballot sort of sums up his presidential campaign so far in a nutshell.

But Gingrich wasn't the only candidate who failed to make the ballot. Texas Gov. Rick Perry, whose campaign thus far had seemed to be deficient in brainpower, charisma and debating skills, but not in money or organizational expertise, also failed to turn in enough signatures to qualify.

Michele Bachmann, John Huntsman and Rick Santorum didn't bother to turn in any signatures. Not much of a surprise for the latter two. They've just been hanging around. Neither has gotten a bump as the Republican's "flavor of the month" to be the Not-Mitt Romney candidate. Hell, even Donald Trump got a bump and he never got in.

In fact, only Romney and septuagenarian Libertarian Ron Paul made the ballot. The first is the definition of the smooth, well organized, Establishment Republican. Lt. Gov. Bill Bolling heads his campaign in Virginia and there wasn't much chance he wouldn't get the necessary signatures. The second is a cult figure who has never won much besides straw polls, but his Paulistas can managed a signature gathering campaign.

While Gingrich and, to a lesser extent, Perry and Bachmann have been whining about how tough Virginia's ballot access laws are -- they require 10,000 signatures, including 400 from each of the state's 11 congressional districts -- the fact is everyone knew what the rules were from the jump.

And how hard can it be? In 2008 Democratic candidates like Al Sharpton and Dennis Kucinich, neither of whom were exactly at the crest of a rising tide, made it onto Virginia's ballot.

They had help though. The Democratic Party of Virginia gathered signatures for all of the candidates at various events. The Republican Party of Virginia didn't make that kind of effort this year. They aren't required to, of course, but it might have helped.

Republican incompetency has taken a good deal of fun out of what could have been a very exciting year in politics here.

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Things we learned from last week's election

It's so much easier to wax profound over an election once it's over.

For honesty's sake, I think I'm on record at various places online predicting that the Republicans would take control of the Senate, 21-19, that Del. Robin Abbott would win a squeaker in the 93rd House District and that Sen. John Miller would beat Republican Mickey Chohany in the 1st District -- and unlike some other people in my newsroom, I expected that 1st District race to be close.

It was and Miller won. Abbott lost a squeaker to Republican Mike Watson instead of winning one. In a higher turn out year, like a gubernatorial election, she probably would have won. And Republicans only forged a tie in the Senate at 20-20, although they are going to use Lt. Gov. Bill Bolling's tie-breaking vote to act like they are in the majority. More on that later.

So what did we learn from the 2011 election?

A few things:

1. It's possible to hold an election where nobody wins.
Obviously the Democrats didn't win, they're down to 32 seats in the House of Delegates and lost the majority in the Senate, their last hold on power at the state level. But you can' t really say the Republicans won. They didn't capture a majority in the Senate, although they were widely expected to. In the weeks leading up to the election I heard and read Republicans predicting that they'd take 25 or 26 seats. There was a Tea Party group set up called "Beyond 21." But they didn't even get to 21.  In fact, of the 24 Senate races contested between the two parties (some of those contests being token opposition), Democrats won 16 and Republicans won only 8. Republicans were able to forge a tie in the Senate because they knocked off two incumbents, without any of their own incumbents being threatened, and because they won two open seats. But it's hard to say they won in the Senate when they lost 2/3 of the contested races.

2. Democrats in the House are in big trouble. For a long time.
While Democrats held their own or better in the Senate, the House races, which got far less attention, were a debacle. They're left with 32 seats. In contested House races, Republicans won 21-6-1 (Del. Lacey Putney, I-Bedford, the longest serving member of the House in history beat both a Democrat and a Republican to win re-election).  It's scandalous that only 28 out of 100 House seats were contested between the parties and, again, some of those were token challenges. Democrats in the House suffered from a huge failure by the leadership, amplified by the Republican redistricting plan. They failed in recruitment so badly that no Republican incumbent member of the House was seriously challenged for re-election. Former House Minority Leader Ward Armstrong paid the prices for the "defense only" strategy. He lost. So did the other two targeted Democratic incumbents, Abbott and Del. Bill Barlow (D-64th). You can't win playing defense. It allowed the Republicans to take money they would otherwise have had to spend on incumbents and use it to win challenge and open seats. In the normal course of events, because Virginia is not a 68% Republican state, you'd expect the Democrats to start winning those seats back at the rate of 2-4 per election cycle. Problem is, that still leaves them in the minority when the next redistricting comes around and Republicans get to draw them back to square one. The best chance for a majority in the House Democrats have for the next 30 years is a Democratic landslide for governor. That hasn't happened in more than 25 years. After 30 years, demographic trends might give Democrats the majority back despite themselves.

3. 2011 was not 2010, so there's no reason to suppose that 2012 will be.
Republicans were predicting bigger gains than they got because they were fighting the last war. They were expecting the kind of Tea Party-fueled wave election that swept Republicans back into power in the House of Representatives last year. It didn't happen. One reason may have been that the Republicans in Congress have managed to damage the brand. While 2010's results were largely blamed on the unpopularity of President Barack Obama, the Republican House of Representatives is currently less popular than Obama. That suggests that Tea Party wave may have lost its momentum. So does current polling for the U.S. Senate race in Virginia in 2012, which shows former Gov. Tim Kaine, one of the president's staunchest allies, tied with former governor and Senator George Allen.

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Ten things that are plucking my last nerve

On Facebook, I usually call this "Things I Hate." But I'll try to confine myself to political topics here and we'll just say these are things that are on my nerves, as the 2011 campaign rushes to a close and the 2012 presidential election kicks into gear.

1. The assertion, generally by Republicans, that a requirement to bring photo ID to the polls has something to do with curbing "voter fraud."  One candidate even said in debate the other night that voter fraud was on the rise in Virginia. When asked to provide an example he, of course, could not. Look, you don't steal an election where the votes are cast, you steal it where the votes are counted. Anybody who gave this issue about ten seconds of thought would realize you can't fix an election by voting fake voters. It's too cumbersome, requires too many people to be in on the scheme. It's a silly idea. We've had three presidential elections in this country that might have been stolen -- 1880, 1960 and 2000. If they were, they were all stolen after the polls closed. So, when Republicans get serious about voting machines with computer software that can't be easily hacked and paper trails to allow an accurate recount, I'll believe they care about "voter fraud." Until then, they're just trying to suppress the vote.

2. Stupid campaign charges. I've got to call out Sen. John Miller's campaign on this one. Miller (D-1st), who's been accused of having a conflict of interest for taking a job with a local aviation company after voting for a bill that gave them a tax break, accused his Republican opponent Mickey Chohany of having a bigger conflict. The issue? That Chohany twice voted for street improvements on the street where his restaurant is located. Look, I've been in that business, I understand "Deny, deny and make counter accusations," but make them sensible. The street improvements were included in packages of citywide street projects that were recommended by the city administration, not Chohany. It's like saying a City Council member has a conflict because he votes to repave every street in the city, including the one he lives one. For the record, the allegation against Miller is more serious. I don't think it rises to the Phil Hamilton level of a violation of the conflict of interest laws that needs to be prosecuted. There's no evidence of quid pro quo. At the same time, it looks bad and -- if in my opinion -- he shouldn't have done it.

3. Republican presidential debates. The only person more exhausted than I am by the multitude of debates is apparently Rick Perry. I might join him in his resolve to ignore some of them. Of course that won't have the consequences for me that it will for him. If you can't win a debate against Rick Santorum and Michele Bachmann, you aren't going to stand much of a chance against Barack Obama.

4. The way some people who cheered on the Tea Party rallies last year, mock the Occupy Wall Street rallies this year. And, I suppose, vice versa. Before the Tea Party got co-opted by the Republican Party, it expressed a lot of the same populist outrage that Occupy Wall Street does. In my view, this is a country long in need of a little healthy populist outrage. The nightmare of the powers-that-be is that the Occupy Wall Street folks and the Tea Partiers might realize that they're mad at some of the same people. That graphic going around the Internet isn't a total joke; there is an intersection of interest between the Tea Party and Occupy Wall Street around the too chummy relationship between government and business.

5. Michele Bachmann. Voice like a razor blade, crazy eyes and crazier ideas. Come back, Sarah Palin, all is forgiven.

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The end of Republicans as we have known them?

Former Williamsburg City Councilman Mickey Chohany is facing off against incumbent Democratic Senator John Miller for the 1st District seat in this fall's elections.

There are a lot of things you can say about Chohany as a candidate. Based on recent debate performances, you might say he's not ready for prime time. You might say he's a stalking horse for Sen. Tommy Norment (R-3rd) and that if he's elected Norment will effectively have two votes in the Senate. (Although if we were going to give a Republican senator two votes, I'd argue that Norment -- who at least understands the importance of governance -- isn't a bad choice. I'd rather he had two votes than Sen. Steve Newman.).

But the odd thing that some people are saying about Chohany is that he's RINO (Republican In Name Only).

I'm not sure on what basis anybody is saying this. Is it guilt by association because he's an ally of Norment, who has also been called a RINO?

Because, on the issues, Chohany seems to meet all the Republican litmus tests. He's pro-life, pro-gun and anti-tax. He's tried a straddle on gay rights, but it's the same straddle that Virginia Republicans, and voters, let Gov. Bob McDonnell get away with.

Are guns or abortion what got Chohany (or Norment) into politics? No. But that doesn't mean they aren't Republicans.

This stupidity has gone so far that some in the right-wing blogosphere are calling for a write-in campaign for Tricia Stall. In case you don't remember Ms. Stall, she's a right-wing Republican who took out another "RINO", Sen. Marty Williams in a primary in 2007 only to lose to Miller in the general election. She lost that election in a 1st District that was far more Republican than the current configuration. Tricia Stall not only has no chance to win as a write-in, she couldn't win if she was on the ballot. She couldn't come close. A vote for her is a vote for John Miller.

Chohany might win. More likely, given the nature of the district now, he won't  But at least he stands a chance.

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Governor going after state employees ...again.

[Note:  Yes, I know I've been a little slack in updating the blog. Chalk it up to selling a house (sort of), buying a house, sloth, an earthquake, a hurricane and other writing projects. I promise to be more diligent. Until I'm not.]

Virginia Governor Bob McDonnell announced this week that state employee retirement benefits might need to be cut, because the system has $18 billion in unfunded liabilities.

He's right about the unfunded liability. Over the next 75 years it does total $18 billion.

But that's not the state employees' fault.

McDonnell has done little to endear himself to state employees. Last year he pushed a measure to require them to pick up part of their own retirement costs.

That doesn't sound unreasonable on the face of it. Why shouldn't they pick up part of the cost? But the way McDonnell structured his proposal, it would have cut the take home pay of every state employee. The General Assembly intervened and gave state employees a pay raise sufficient to offset the retirement contribution. That was in line with the original deal which led to the state picking up the employees' contribution -- it was done in lieu of a raise.

The legislature showed much better common sense and a greater sense of justice than the governor on this issue.

It's odd that McDonnell, who doesn't have the reflexive anti-government instincts of a lot of Republicans -- former governors George Allen and Jim Gilmore for instance -- would be taking another swing at state employees.

Maybe McDonnell, recently chosen to lead the Republican Governor's Association, feels he need to do it to have some street cred with his peers. From Scott Walker in Wisconsin to Rick Scott in Florida to Chris Christie in New Jersey, it seems like wherever you have a new Republican governor these days, he's at war with his state employees.

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