The recent events in Charlottesville to protest the removal of the Robert E. Lee statue morphed into a shocking display of anti-Semitism. The pictures of torch-bearing protesters chanting “Jews will not replace us” resembled 1930s marches in Nuremberg, Germany. The current leader of the Republican Party, Donald Trump, could not bring himself to decisively separate himself from this outrage. His comment that both sides had good and bad people implied support of those who created the greatest horror of the 20th century.
This type of bigotry is on the rise. The so-called Alt-Right now seems to form a significant portion of the base of the Republican Party. One consequence is the resurgence of The Forward, which was originally published in Yiddish in the early 20th Century. The paper was on the verge of disbanding itself in the 1990’s but in recent years resurrected itself in English as a magazine covering the rise in anti-Semitic incidents and tracking bigoted web sites.
In a recent opinion piece Princeton Economics Nobel Laureate Paul Krugman examined the campaign of Trumpian nominee Ed Gillespie. By standing tall against the removal Confederate statues, this Trump surrogate has politicized an issue that will attract the Alt-Right base of his party. Ed has also run ads implying that the Democratic nominee supports immigrant gangs and sanctuary cities for them to hide in. Neither charge appears to be true. But it plays well with the Alt-Right fear of immigrants.
Next Tuesday’s results will reverberate beyond Capitol Square.
Posted in Politics, Race and race relations
SCHEV proposal would fund more for faculty recruitment and retention, financial aid, and building maintenance, among other priorities.
The State Council of Higher Education for Virginia (SCHEV) voted today to recommend a $352.4 million increase in state support for higher education in the next two years. Almost half the increase would be designated to faculty recruitment and retention, a top priority of Virginia’s higher-ed sector. Another $55 million would go to financial aid and student support programs.
To leaven the request, the council also recommended a tighter cap on student fee increases from 5% yearly to 3% yearly as well as a new mechanism to build up an institutional reserve fund.
“This is not a random request for more money,” said Marge Connelly, chair of SCHEV’s resources and planning committee. The budget is aligned with the strategic goals of the Virginia Plan for Higher Education, a blueprint for Virginia to attain the goal of best educated state in the nation by 2030.
The plan calls for extra funding of $112.9 million in fiscal 2018-19 and $186.2 million in fiscal 2020. Key spending categories include:
To address volatile state support, which is subject to cuts to offset budget shortfalls, some higher-ed officials had called for creation of something equivalent to the state’s “rainy day” fund that could be tapped to level spending. With the recommendations adopted today, SCHEV proposes allowing colleges and universities to create “institutional reserve funds” into which they could put unexpended appropriations. A SCHEV handout provides the justification:
By establishing an institutional reserve fund, an institution will be able to promote more efficient resource utilization, reduce sudden spikes in tuition, and foster more long-term planning, thereby increasing affordability for Virginia’s families.
SCHEV also urged the General Assembly to stick to its two-year budgets. In recent years, says the SCHEV handout, the “biennial budget exists in name only.”
A return to a two-year budget cycle could provide, at least minimally, for a more stable and predictable planning cycle for our public institutions. There is a clear and strong relationship between predictable state support and lower tuition increases. Affordable access to Virginia public higher education would be improved by returning to such a policy.
The only note of dissent during the budget discussions came from council members Minnis Ridenour and Stephen Moret. Ridenour said the measure would restrict the authority of boards of trustees. Moret suggested that the cap could lead to unintended consequences. Connelly defended the measure as needed to establish some “balance” against the council’s aggressive funding request.
Update: Michael Martz with the Richmond Times-Dispatch covered the SCHEV meeting as well, and his reporting contains detail that my posts did not.
Posted in Education (higher ed)
If Virginia’s colleges and universities want to make inroads with the General Assembly, they might consider being more friendly to Republicans on campus, renowned University of Virginia political scientist Larry Sabato told the State Council of Higher Education for Virginia (SCHEV) today.
The United States is as polarized today as it was in the 1960s and 1970s, said Sabato, arguably the best known political scientist in the country, who had been invited to speak on any topic he chose. The difference is that in the ’60s and ’70s, the nation was polarized over issues such as Civil Rights and the Vietnam War. Today the country is divided by partisan loyalty. In the past the political parties allowed for a diversity of viewpoints on issues such as gun control. Today, he said, “You can’t find a Democrat who isn’t in favor of gun control and a Republican who is.”
Pew Research Center research has found that the divisiveness is driven largely by negative emotions, Sabato said. “People hate the other party more than they like their own.” And hardly anyone is immune to the phenomenon. Scratch an independent, and the odds are he or she votes for either Democrats or Republicans ninety percent of the time.
Traditionally, higher education enjoyed the consensus support of Democrats and Republicans. Everyone bought into the goal of making college affordable and accessible. Then colleges got sucked into the culture wars. College employees tend to vote for and donate to Democrats in much larger numbers. Some college campuses became hostile to conservative speakers. In today’s polarized climate said Sabato, “Democrats support what they think is the prevailing ideology in higher ed and Republicans oppose what they think is the prevailing ideology.”
Republicans feel increasingly alienated from the higher ed community, he said. They feel universities are a “bulwark” of the Democratic Party. “You can’t have liberal after liberal after liberal as graduation speaker and be perceived as fair to both sides.” Universities should continue “speaking truth to power,” he said. But if they want a friendlier response in state legislatures, they should “reach out to the party that is not as represented.”
It doesn’t take much to reach out to Republican legislators, he said. Encourage more diverse perspectives on campus. Invite them to speak. He even invited Senator Ted Cruz to address his class, he said. “We’re not Berkeley.”
Posted in Education (higher ed)
W. Taylor Reveley IV addressing SCHEV.
Longwood’s Taylor Reveley IV says Virginia’s elite universities should consider generating more revenue by admitting more out-of-state students.
The Commonwealth of Virginia faces chronic budget pressures — the growth of Medicaid, pension liabilities, and more — that will make it difficult for the General Assembly to bolster state support for higher education. W. Taylor Reveley IV, president of Longwood University, delivered those cautionary words to the State Council of Higher Education for Virginia (SCHEV) this morning shortly before it endorsed a committee recommendation to increase higher-ed spending by $350 million over the next two-year budget.
Perhaps it’s time for the state to consider another “restructuring” of the higher-ed system, Reveley suggested: Give leading universities more freedom to admit out-of-state students paying higher tuition, reduce state support for those institutions, and let the savings flow back to the other colleges and universities.
A legislative deal in 2005 gave Virginia universities more autonomy over procurement, IT, human resources, and other business processes in exchange for more accountability for achieving state goals. The legislation created three levels of autonomy, depending upon each college or university’s institutional capacity, Tier 1, Tier 2, and Tier 3. Only four institutions — the University of Virginia, the College of William & Mary, Virginia Tech, and Virginia Commonwealth University — have attained Tier 3 status with the most autonomy.
Reveley’s restructuring idea would create a “Tier 4” exempt from the state requirement that no institution enroll more than 25% of out-of-state students in their undergraduate student body. The percentage of out-of-state students at Virginia’s elite universities is a political football between the institutions and politicians. Universities like out-of-state students because they pay, on average, 163% of the tuition of in-state students, yielding more revenue. But General Assembly members are sensitive to constituent complaint of their children being displaced by out-of-state students.
Percentages based upon 206-2017 academic year numbers. (Click for more legible image.)
Admitting more out-of-state students could yield a “nine-figure” sum to reinvest in the higher-ed system, Reveley said. Rather than redistribute that sum between the other colleges and universities, the state could consider dedicating the funds an “investment pool” to advance a strategic aim such as advancing university research & development or (mentioned in a side chat with Bacon’s Rebellion) improving the graduation rate. Not only would reducing the number of college drop-outs prevent personal tragedies for students who spend thousands of dollars and drop out without receiving a degree or certification that would allow them to earn more and pay off the debt, it would enable colleges to award more degrees without the need to expand capacity at great public expense.
Most college presidents invited to address SCHEV council meetings use the opportunity to plug their institutions. Reveley took the opportunity instead to talk about the issue he says is “front and center” in higher education today — cost. Even adjusted for inflation, college is far more expensive today than it was in the 1960s and 1970s. “That same trend cannot repeat itself over the next two generations.”
Reveley drove home two other key points:
Personnel reform. Pore through university budgets, and you’ll find that 75% to 80% of the cost is tied to personnel, Reveley said. To some degree, he attributes higher-ed inflation to the phenomenon of “cost disease,” an affliction of labor-intensive economic sectors requiring lots of human interaction such as dentistry, teaching or the arts. It takes just as many people to play Beethoven’s 9th Symphony today as it did 100 years ago, he said. “I think that’s a lot of what’s driving the cost issue in higher ed.”
But it’s not the only thing. Virginia’s public higher-ed system operates according to civil service-like rules that were put into place to give government employees protections against wholesale replacement by new governors. Pork barrel politics is not an issue for colleges and universities. But the protections make it difficult to fire, reward and motivate employees, Reveley said. “It’s tough to exhort the troops when you can’t reward the ones who have worked their hearts out.”
Over and above the civil service rules, colleges and universities have a “dozen different flavors of employee.” These classifications creates conflict and hinder the ability to move people within the organization. While Reveley did not identify specific reforms, he said he would like to see a personnel system that resembled large not-for-profit organizations in the private sector.
Career prep. Reveley has been an outspoken voice in Virginia defending the virtue of a liberal arts education over career-prep degrees. Colleges play a critical role in preserving democracy and building civil society by teaching students how to engage with ideas and participate in organizations, he said. A liberal arts education “is not just a luxury good,” he told SCHEV. If career-prep is the goal, there may be less expensive ways to achieve the goal than sending students to four-year colleges.
Reveley is not the only person in Virginia to suggest another round of higher-ed restructuring. SCHEV staff had suggested the idea of increasing out-of-state enrollment to raise revenue and redirect state support to other institutions. Minnis Ridenour, a former Virginia Tech COO and a SCHEV board member, told the council he has discussed the idea with senior people at Tier 3 institutions, and that they are thinking it over. But Reveley is the first university president (to my knowledge) to publicly endorse the idea. He also is the first to suggest dedicating the freed-up revenue to a specific strategic goal rather than parceling it out among all the colleges and universities.
If higher-ed institutions want to run with the idea, they had better move quickly, said SCHEV chairman Heywood Fralin. There is little time to work out the details of any enabling legislation before the General Assembly session starts in January.
Posted in Education (higher ed)
I’m just back from the meeting of the State Council of Higher Education for Virginia (SCHEV), and I had to share this tongue-in-cheek observation by W. Taylor Reveley IV, president of Longwood University, which he made during a presentation to the council. I couldn’t transcribe fast enough to provide exact quotes, but it went something like this:
In Virginia, we’re blessed with the greatest system of higher education in the country. The United States is widely acknowledged to have the best system of higher ed in the world. And there is no known extra-terrestrial life. Ergo, Virginia has the best system of higher education in the universe!
I don’t know if such a claim is backed by the data, but I like the way Reveley thinks.
Posted in Education (higher ed)
Percent of students with financial need receiving a Virginia Student Financial Assistance Program award. (Click for more legible image.)
The State Council of Higher Education for Virginia (SCHEV) has set a goal of making Virginia the best educated state in the country, but getting there could be an uphill climb. While the in-migration of educated people has boosted Virginia to a 6th-place rank nationally in educational attainment, the attainment of high school grads is only 11th. Increasingly, the state’s college-bound population consists of minority-race households with lower income who face greater academic and financial challenges attending college.
To address the problem, SCHEV staff recommends significant spending boosts in the next biennial budget to help recruit and retain “first generation” students who are the first in their family to attend college. Highlights include:
The Council will consider these and other budget proposals in its October board meeting tomorrow. The entire two-year package of higher-ed recommendations enumerated by SCHEV staff total $240 million in General Fund spending and $126 million in nongeneral funds. If approved, the recommendations will be forwarded to the McAuliffe administration and to legislators working on the fiscal 2018-2020 budget. Higher-ed priorities will face stiff competition from Medicaid, K-12 education, transportation, and public safety, among other priorities.
Postsecondary access resources. A July 2017 SCHEV-commissioned study, “Landscape of Postsecondary Access Resources in Virginia,” found that 30% of Virginia school districts need additional resources to counsel middle and high school students about college careers. The need is particularly acute among lower-income students.
The staff presentation by Finance Policy Director Dan Hix did not specify what the $2.5 million in “postsecondary-preparatory planning and capacity-building efforts” would be spent on. But the July report suggests “SAT/ACT test preparation, the financial aid application process and/or financial literacy, and opportunities for student exposure to postsecondary institutions, especially those beyond the local area.”
Graduation rate. Another priority is bolstering the graduation rate. Schools have experimented with an array of programs to improve student retention, from one-stop shopping for tutoring, mentoring, and guidance counseling; family orientation programs to get parents more engaged; living-learning dormitories that house students with similar interests; and the use of predictive analytics to spot dropout risks.
The $10 million for such programs, states the Hix presentation, should be tied to graduation rates and other success metrics.
Financial aid. The federal government provides extensive financial aid to lower-income students in the form of Pell grants and loans. Public universities also run scholarship programs funded by donations and tuition. (Virginia higher-ed institutions are using approximately 5% of in-state tuition revenue for financial aid for in-state students.)
The Virginia Student Financial Assistance Program (VSFAP) is a third source of financial assistance. In 2016 Governor Terry McAuliffe and the General Assembly put an extra $24.1 million into VSFAP, the largest increase in the program’s history.
Yet from fiscal 2013 to 2016, states the Hix presentation, combined enrollment across all public Virginia institutions dropped by 11,200 students (mostly at community colleges). Students demonstrating financial need declined by 13,000. The loss was concentrated among students in the $0-to-$50,000 income group, which declined by nearly 17,000 (14.8%).
The VSAP program must balance two criteria: helping more students and making larger awards. Virginia universities have been awarding money to more students, but the awards have not kept up with students’ needs. The results, says Hix, are unfortunate. He cites a Joint Legislative Audit and Review Commission (JLARC) report suggesting that a $1,000 boost to financial aid is associated with a three- to five-percent point increase in college attendance. Presumably the converse is true: a $1,000 cut in financial aid is associated with a three- to five-percent drop in attendance. The practice of spreading the gravy might be contributing to a higher dropout rate. SCHEV’s solution: Put more funding into the program.
Bacon’s bottom line: Hix’s analysis makes perfect sense if you accept the proposition that more lower-income students need to attend college. The aspiration certainly makes sense to colleges, which need more lower-income students paying tuition to maintain their revenue streams. It make sense to the business community, which wants a skilled and educated workforce without bearing the expense of training or apprenticeships. And it makes sense to social justice advocates who think it unjust that some Americans are stuck in lower-paying jobs because of a lack of educational opportunity. But the aspiration may not make sense to lower-income Americans themselves.
A four-year college education can be a ticket to the middle class, or even riches for a fortunate few. But attending college is a lottery. If you are a first-generation college student, there is a good chance that you will struggle academically, have a hard time paying the bills even with financial aid, and drop out saddled with tens of thousands of dollars in student debt. There is a good chance that you’ll fall behind in your loans, your credit will be wrecked, and your life will be worse than if you never went to college. How many millions of Americans have had that experience? How many students in the same social milieu have heard the cautionary tales? And how much will it cost to overcome their resistance?
Posted in Education (higher ed)
The Richmond Times-Dispatch ran a striking chart in its Sunday edition contrasting the growth rate for different metropolitan statistical regions in Virginia. The main thrust of the article was to show that the Richmond region, after years of sub-par job creation, is growing smartly these days, creating almost as many jobs over the past 12 months as Northern Virginia. Indeed, if you adjust for the fact that Northern Virginia has roughly twice the population, Richmond’s performance is all the more remarkable.
(If you infer that Richmond has an inferiority complex regarding Northern Virginia, you’re right. As a Richmonder, I confess that it feels really good to sport a stronger economy, even if only for a brief moment in time.)
While the Times-Dispatch did not dwell on the point, the chart reinforces a post I made a couple of months ago pointing out that Hampton Roads is the main drag on Virginia’s economy this year.
As is my wont, I began playing with the numbers. I wondered how non-metropolitan Virginia was faring. By non-metropolitan Virginia, I’m referring to the mill towns and truly rural counties where the economy is thought of as moribund. Non-metro Virginia appears in the gray hatched area below — mostly Southside Virginia, the far Southwest, the western mountains, and the Chesapeake Bay.
I started with the fact that, according to the data in the chart, Virginia created a net 34,000 jobs between September 2016 and Sept. 2017. I netted out the job gains and losses for the metropolitan areas shown in the chart and got a gain of 14,800 jobs that could be attributed to non-metro Virginia. That number suggests, in defiance of all anecdotal evidence to the contrary, that Virginia’s small towns and rural areas are experiencing the biggest job-creation boom of all.
Either the anecdotal evidence is deceiving or the data is wrong. I think the data is wrong, or perhaps missing vital context. The Times-Dispatch attributed the information to the Virginia Chamber Foundation, and I have no doubt that the reporter transcribed the information accurately. Unfortunately, in the time available to me, I could not track down the original source on the Chamber website, so I hit a dead end.
I went to the federal Bureau of Labor Statistics, the most authoritative labor market source I could find. These numbers reflect 12-month job growth from August 2016 to August 2017 — one month earlier than the Chamber data.
These data confirm that Hampton Roads is a drag on the economy. But the region’s economy is in slow-growth mode, not shrinkage mode, which is some consolation. It also confirms that, for a brief shining moment, Richmond is leading the pace in Virginia job creation. Hoo ah! Unfortunately, the Washington data from this source is for the metropolitan area as a whole, not just Northern Virginia, so the job-creation rate should be regarded as only a rough proxy.
Regarding the Washington/Northern Virginia economy, it is natural to assume that tight federal spending is to blame. And perhaps it is. But there’s more to the story. Northern Virginia has an extremely low unemployment rate. In fact, in certain sectors, there is a labor shortage. Consider this Virginia Employment Commission data on where the job openings are (based on online advertising):
Fairfax County — 40,605 Richmond — 11,850 Arlington — 9,899 Loudoun — 8,898 Norfolk — 5,595 Virginia Beach — 5,439 Alexandria — 5,187 Henrico — 4,441 Prince William — 4,014 Albemarle — 3,410
Obviously, there’s a strong correlation between total jobs advertised and the population of the locality. But the numbers indicate that Northern Virginia has nearly 70,000 job openings right now. A worker shortage could be the main constraint on growth, not a weak economy. The data also show that the City of Richmond is cooking with gas — the city and the larger region lost a decade reinventing itself, but the efforts finally seem to be paying off. Finally, for all of Hampton Roads’ job woes, Norfolk and Virginia Beach are still hiring.
Posted in Business and Economy
Thanks to the intrusion of outsiders bent upon confrontation, Charlottesville has become synonymous in the public discourse with hate and discord. It’s a bum rap. In a recent survey of the happiest metros in the United States, C-ville ranked third, behind Boulder, Colo., and Santa Cruz, Calif.
The study by National Geographic and the Gallup organization established 15 metrics—from healthy eating and learning something new every day to civic engagement, financial security, vacation time, and even dental checkups—that signal happiness. The National Geographic Gallup Special/Blue Zones Index draws on nearly 250,000 interviews conducted with adults from 2014 to 2015 in 190 metropolitan areas across the U.S.
In happier places, locals smile and laugh more often, socialize several hours a day, have access to green spaces, and feel that they are making purposeful progress toward achieving life goals, writes the National Geographic’s George Stone. The happiness index tracked factors that are statistically associated with doing well and feeling well, including feeling secure, taking vacations, and having enough money to cover basic needs.
The National Geographic article is frustratingly short on specifics about what makes Charlottesville happy, noting no more than the following in its photo cutline: “Along the foothills of the Blue Ridge Mountains, Charlottesville, Virginia, has ample opportunities for getting outdoors between visits to Monticello and the University of Virginia—both listed as World Heritage sites.”
I’d like to know what makes Charlottesville such a happy place, but the details aren’t available anywhere online that I could find. It also would be helpful to know if the data is drawn from just the city of Charlottesville, from Charlottesville and Albemarle County, or from the Charlottesville metropolitan area, which includes the outlying counties of Fluvanna, Greene and Nelson.
The photograph above, taken from the National Geographic article, shows Charlottesville’s downtown mall, which is an enjoyable place to spend time. And Cville is, of course, home to the University of Virginia, with all the assets that it has to offer. Those two iconic features, along with Monticello, are the first to come to mind when people think “Charlottesville” (well, when they aren’t thinking about white supremacist rallies). But Nelson County, which is part of the metro area, is the location of the Wintergreen resort community, which is a fabulous place in its own right.
All this is a long way of saying, yeah, it’s cool that Charlottesville is ranked No.3 in the National Geographic’s happiness index, but the published data doesn’t give us public policy wonks much to work with in teasing out what makes Cville residents happy and what lessons might be gleaned for other Virginians.
One of my goals at Bacon’s Rebellion is to divine how colleges and universities function as business enterprises. What are the key drivers of revenues and costs? How well are they performing? Is their position in the marketplace improving or losing ground? This is not easy, as higher-ed institutions do not present their data in ways that lend it to outside analysis.
In pursuit of a keener understanding, I have been dabbling in a State Council of Higher Education for Virginia (SCHEV) database that tracks the number of applications, admissions, and enrollments for Virginia’s public universities.
These are critical metrics for assessing an institution’s health. It is a positive sign when the number of students applying for admission increases, a bad sign when applications drop. It is a sign of exclusivity — the ability to pick and choose students — when an institution accepts a low percentage of applicants and rejects a high percentage. Conversely, it is a sign of desperation when an institution accepts all comers. Finally, it is useful to track how students who, once admitted, decide to enroll and how many choose to attend a different institution.
The chart above shows admission data for Virginia’s flagship institution, the University of Virginia. As can be readily seen, the number of applications has surged — up 105% over the eleven years between the 2005-06 school year (when SCHEV data begins) and the 2016-17 year. Part of that increase reflects the fact that students are applying to more colleges than in the past. But in UVa’s case, the deluge in applications also reflect an increasing interest in the school. For all the controversies UVa has endured in recent years, it outperformed other public colleges by a wide margin. The average increase in applications for Virginia’s other fourteen public four-year institutions was 29%.
With skyrocketing applications, UVa could afford to be selective. In a sign of increasing selectivity, the university’s acceptance rate declined from 37.7% to 30.4%. That performance was all the more impressive compared to other Virginia institutions. Every other four-year college and university became less selective over the same 11-year period, some more so than others, as can be seen in the charts below. (A downward sloping lines indicates increasing selectivity.)
Speaking generally, Virginia’s most selective institutions tended to hold their own over the decade when measured by this indicator, while the least selective institutions lost ground, as seen by the upward sloping lines.
That brings us to a third metric, the “yield rate,” or the percentage of students granted admission who decide to enroll. Generally speaking, a higher yield rate indicates that an institution is in greater demand. A lower yield rate suggests that more students are saying, thanks, but no thanks.
As seen in the charts below, yields declined almost universally through the eleven-year period — VMI was the sole institution to buck the downward trend. (I deleted Norfolk State from this series because it was an outlier that rendered meaningless results.) The negative yield-rate trend likely reflects an increasing proclivity of students to apply to more colleges and nail down more acceptances in order to increase their choices, so declining percentages are not necessarily a reason for alarm. That said, the decline was downright precipitous for some institutions. Particularly alarming: Only one in five students accepted to the University of Mary Washington and Virginia State University wound up enrolling.
Admission, acceptance and yield trend-lines are especially worth watching for institutions that have increased tuition aggressively. There is widespread evidence that families are showing increased resistance to the high cost of attendance, particularly among institutions that lack a prestigious reputation. Some institutions have priced themselves out of the market.
For example, Mary Washington University could be running into price resistance.
Mary Wash’s yield rate is low — slightly fewer than 20% of accepted students choose to enroll. Even though applications have increased in recent years, the university has had to accept a higher percentage of applicants in order to maintain its enrollment goal. That means Mary Wash has been dipping deeper into the applicant pool and showing less selectivity. As long as it can increase the number of applications — through more aggressive marketing, perhaps — the Fredericksburg university can maintain its enrollment numbers. But the trends are worrisome.
The SCHEV data allows us to drill a little deeper, viewing the trend lines for both in-state and out-of-state students. Applications and enrollment have held up for in-state students, but enrollment has stumbled badly for out-of-state. That’s critical because out-of-staters pay a $14,600 tuition premium to attend (not including adjustments for financial aid). Out-of-state enrollment, which stood at 323 in 2005-06, fell by two-thirds to 102 in 2016-17. While Mary Wash accepted 86.7% of out-of-state applicants, a mere 9.9% of those accepted chose to enroll — down from 25% eleven years before. Given the out-of-state tuition premium, the out-of-state enrollment decline represents a loss of $3.2 million in tuition revenue.
That revelation sent me running to the most recent Mary Wash annual report: In fiscal 2015, the university lost $39.5 million in its net position (equivalent to net equity), and in 2016 saw a rebound of only $4.1 million. With $168.6 million in noncurrent liabilities (long-term debt) and $358 million in assets, the school is, in business parlance, fairly highly leveraged. Hopefully, more recent enrollment and financial trends have been more positive. But if I served on the Board of Visitors, I’d be asking a lot of questions.
University board members are unlikely to ever see this data from their college and university presidents. They would be well advised to acquaint themselves with it on their own initiative.
Posted in Education (higher ed)
Beth Bortz, CEO of the Virginia Center for Health Innovation
A big reason the healthcare debate in Washington has gone nowhere is that it’s all about who pays for healthcare, not how to create better outcomes at lower cost. For every winner, there’s a loser, and that’s a recipe for gridlock. Meanwhile, medical costs continue climbing. Ultimately, everyone loses.
The business of figuring out how to improve outcomes and reduce costs gets a tiny fraction of the media attention, but if there’s ever going to be a solution to the healthcare crisis, it will come from stretching healthcare dollars, not redistributing them. As it happens, Virginia is taking the lead in an initiative that may help “bend the cost curve.”
Five Virginia health plans are taking part in a pilot program funded by private foundations and led by the Catalyst for Payment Reform (CPR), a nonprofit group that seeks to measure “which strategies are having the desired impact in the market,” reports Virginia Business magazine. Virginia will be one of only three states selected to participate, says Beth Bortz, CEO of the Virginia Center for Health Innovation, which coaxed Virginia’s five insurance companies into sharing their data. (Two other insurers have yet to commit.)
Each of the participating companies — Aetna, Anthem, Optima, UnitedHealthcare and Virginia Premier — possesses vast quantities of data on healthcare expenditures and outcomes. But data residing in five silos isn’t as valuable for analytical purposes as a database encompassing all five. Reports Virginia Business:
The key goal is to identify health-care payments in commercial and Medicaid sectors that are “value oriented,” which CPR defines as effective treatments combined with a reduction in unnecessary spending. That means the project’s intent isn’t just to find effective treatment. “We’ve been about advancing value,” Bortz says. “It’s not quality at any cost.” …
Involvement with CPR will help a project VHCI has already begun. It is a data-based measurement of health care called the Virginia Health Value Dashboard. Its purpose “is to prompt action for improving the value of health-care services,” says VHCI.
Examples of “low-value” care that the dashboard project is targeting include: avoidable emergency-room visits, hospital readmissions and the use of high-cost service sites when less expensive options are available. The “high-value” care examples include: up-to-date vaccinations, smoking cessation programs, better screening for cancer and improved management of chronic conditions such as diabetes.
The goal is to have in place by January a dashboard tool for groups that provide, buy or fund health-care services to use in evaluating various costs. Being part of the CPR’s project is a big step toward that goal. “It costs money to get good data,” Bortz says.
Bacon’s bottom line: It would be great if Virginia could bend the cost curve. Households could find some relief from the relentless squeeze on their pocketbooks. More people could afford afford insurance coverage. And, to the extent that healthcare is a big chunk of employee compensation, Virginia businesses could gain a competitive advantage.
There is a gap, however, between knowing what the best practices are and actually putting them into place. The political economy of healthcare in Virginia is riddled with special interests that benefit from laws and regulations that stifle change. Many regulations — mandated benefits, medical licensure, the Certificate of Public Need process — create incentives for perverse behavior. The best data in the world won’t do much good if health care providers don’t do anything with it. So, while the CPR initiative is a positive development, Virginia has much work ahead to create the conditions where healthcare insights will be acted upon.
Both Virginia Commonwealth University and I have fallen down on our pledges to promote the Virginia-focused public policy work of the university’s Center for Urban and Regional Analysis (CURA). Since last I highlighted one of CURA’s studies on Bacon’s Rebellion, the center has published five more without any notice on this blog. Hopefully, we have rectified the breakdown in communications, and I will provide access to future studies on a timely basis.
To make partial amends, I would like to alert Virginia’s policy wonk community to those five studies published over the past year or so.
Evaluation of the Virginia Enterprise Zone Program (December 2016)
Analysis of the impacts of the program on employment and real-estate values, the features of the program that work well, and determination of how enterprise-zone performance can be enhanced. (Prepared for the Virginia Department of Housing and Community Development.)
The Impact of Heritage Tourism on the Virginia Economy (February 2017)
Estimates the quantitative impact of heritage tourism on the state’s economy, and provides a qualitative picture of the role of heritage tourism in community development in Southwest Virginia, Northern Virginia, and on the Eastern Shore. (Prepared for Preservation Virginia.)
Downtown Hopewell Space Feasibility Study (August 2017)
Studied the community demand for potential uses of a 14,000-square-foot building, located in downtown Hopewell. The study looked at successful kitchen incubators and makerspace facilities in other states, conducting a business survey, and presenting a cash flow analysis of five scenarios for potential uses of the space. (Prepared for Hopewell Downtown Partnership.)
Understanding the Jobs-Affordable Housing Balance in the Richmond Region (July 2017)
This report maps and describes the geographic relationship of affordable housing and low-wage jobs in the Richmond region through two different spatial models: a Thiessen polygon-based approach and a gravity-based approach. The report also examines housing value and crime data in neighborhoods around six different affordable housing developments to identify any impacts the developments had on topics of concern to neighbors of affordable housing. (Prepared with the support of the Community Foundation.)
Second Annual MetroView Development Tracker (July 2017)
MetroView Development Tracker provides a snapshot of land use, property value, development footprint, and jobs-housing balance as of 2014-2015 for 15 counties, 6 independent cities, and one town comprising the greater Richmond metropolitan area. Detailed land use profiles for the RRPDC and Crater PDC boundaries and for individual county/city are also included in the report.
Posted in Blogs and blog administration
Simulated view of Rocky Forge wind project.
The developer of what could be Virginia’s first commercial wind farm has lined up all the regulatory permits it needs, but it hasn’t started site work yet because it can’t find a buyer for the electricity. Apex Energy will not start construction by the end of this year, as planned, on the Rocky Forge project in Botetourt County, reports the Roanoke Times.
“We’re working to find the right partner to commercialize Rocky Forge,” said Apex spokeswoman Brooke Beaver wrote. “We do not yet have a specific date for the start of construction, but are working steadfastly toward that goal.”
On the positive side, Beaver said a later start date would allow Apex to take advantage of “even newer technology that will make the project even more competitive.”
Project critic Steve Neas told the Roanoke Times that he believes the wind farm’s 75-megawatt capacity is not enough to make it attractive to either a power company shopping for renewable energy or investors willing to commit to the project. “My guess is that they’re having a hard time lining up people to buy their power.”
Apex contended in its statement that with the latest delay, the company has “the opportunity to utilize newer turbine technology, making Rocky Forge even more competitive in the market and further decreasing the cost of the energy it can produce.”
“Virginia has experienced tremendous growth in solar energy in the past year, and we look forward to adding wind energy to the generation mix.”
Tagged James A. Bacon, Wind power
Real racism: The Short Pump Middle School has shut down its football team after circulation of a Snapchat video showing white players pinning down black players and simulating anal rape while making racist slurs. The only saving grace to this reprehensible episode is that members of the school community are universally disgusted by the boys’ behavior. Henrico County Public Schools convened a meeting last night, attended by 400 people, to discuss how the community should respond. (The Richmond Times-Dispatch has the story here.)
Fake racism: Democratic candidate for governor Ralph Northam stands by his characterization of Republican rival Ed Gillespie as in league with white supremacists. As the Times-Dispatch describes the slander, Northam issued a mail piece that “superimposes images of Trump and Gillespie over a photo of torch-wielding white nationalists marching in Charlottesville in August. The message says Virginia voters have a chance to ‘stand up to hate’ in the Nov. 7 election.” On the back of the mailer, another message urges voters to “stand up to Trump, Gillespie and hate.”
While Northam did not explicitly call Gillespie a racist or white supremacist, the message was clear. But in actuality, Gillespie had denounced the white supremacist rally, even before it turned violent. “Having a right to spew vile hate does not make it right,” said Gillespie at the time. “These displays have no place in our commonwealth, and the mentality on display is rejected by the decent, thoughtful and compassionate fellow Virginians I see every day.”
(It’s only fair to point out that Gillespie is not an innocent when it comes to slanderous campaign ads. His ads have depicted Northam as a sympathizer of the violent Salvadoran street gang MS-13.)
Sadly, when given a chance to distance himself from the Northam campaign’s slander, Governor Terry McAuliffe responded, in effect, that one vile mischaracterization deserves another: “I think the hatred and bigotry that we saw — and I personally saw firsthand — of the hatred, the white supremacists, the KKK, the ‘alt-right,’ is the same divisive Trump politics that Ed Gillespie is doing in his ads today. There is no difference. They are bringing hatred, fear, bigotry to our state.”
Both candidates need to apologize to the other. The fact that neither is willing to do so is what turns people off to politics today. (I would note that one candidate, Libertarian Cliff Hyra, has taken the high road by refraining from such inflamed rhetoric.)
More fake racism: A self-described “peoples tribunal” will assemble this weekend in Charlottesville to address “environmental racism impacts of fracked-gas pipelines.” A panel of three human rights and environmental pollution experts will preside as judges at a daylong tribunal examining the multiple social and racial injustices afflicted by the Mountain Valley and Atlantic Coast pipelines.
The proposed Atlantic Coast Pipeline route will traverse through varied populations: mostly white but also African-American and Native American. Focusing on the impact of African-American and Native American communities, pipeline foes have leveled charges of environmental racism.
According to the Federal Energy Regulatory Commission (FERC) environmental impact statement, minority communities will be exposed to temporary increases in construction dust and longer-term exposure to combustion emissions from compressor stations, though within permissable air-quality limits. States the EIS: “No disproportionately high and adverse impacts on environmental justice populations as a result of other resources impacts would be expected.”
It’s hard to show that the ACP route as a whole disproportionately impacts one group over another. The trick is to adjust the frame of reference as needed. Thus, critics argue that about 30,000, or 13 percent, of the people who live within one mile of the proposed route of the pipeline in North Carolina are Native American, even though Native Americans represent only 1.2 percent of the state’s total population. In this case, critics have narrowed the frame of reference to the section of the pipeline in North Carolina. In Virginia pipeline foes have narrowed the frame of reference to African-Americans living near a compressor station in Buckingham County.
If living within a mile of construction noise and dust is sufficient to characterize a project as environmentally racist in the case of a pipeline, then every construction project near a minority population is racist because any project that requires clearing land and digging will generate dust. This logic is a recipe for shutting down all construction near minority populations, effectively creating economic no-go zones… which sounds pretty racist itself.
Of course, pipeline critics have no desire to shut down all construction everywhere. They just want to shut down the pipeline. Now, there are respectable reasons for wanting to block the pipeline — you can read them in this blog. But tarring the project as environmentally racist is not a respectable reason.
Bacon’s bottom line: As the Short Pump Middle School episode shows, racist words and behavior are not the exclusive domain of torch-bearing white supremacists. What happened at Short Pump was shocking and the community needs to express its outrage, as in fact it appears to be doing. But communities’ efforts to enforce acceptable codes of behavior is undermined when anyone and everyone is being called a “racist” or a “hater” these days. Ralph Northam loses all moral authority to talk about racism when he ties Ed Gillespie to white supremacists. Social Justice Warriors lose all moral authority to talk about environmental racism when they cherry pick their data to heap onus upon a pipeline project they don’t like.
The public discourse has so debased the meaning of the word “racist” that many people distrust the dominant narrative. I would bet that some Henrico citizens, like the villagers who ignored the boy who cried wolf, don’t trust the media and county authorities to provide a fair and accurate account of what happened at Short Pump. And that’s not a result that any thinking or caring person should desire.
Posted in Race and race relations
Tagged Atlantic Coast Pipeline, James A. Bacon
This chart shows the dramatic drop in Dominion’s solar energy output during the recent solar eclipse.
Is Thomas Edison’s electric grid ready for the future? In some ways yes, and in other ways not yet. So says Kevin Curtis, vice president-technical solutions for Dominion Energy Virginia.
The challenges of integrating renewable energy sources and protecting against cyber-threats have created the need for a smarter, modernized grid, Curtis said today in a Northern Virginia Technology Council forum on the topic of powering Northern Virginia’s high-tech economy.
“Grid modernization means a smarter grid, a self-healing grid, with fewer disruptions and fewer customers impacted,” Curtis said. The reliability and quality of electric service is especially critical to technology companies, which not only need to maintain uninterruptible service but keep voltage and electric frequency within a tight range.
In 2015 Dominion had only one megawatt of solar power on its system. Today the number is 744 megawatts online or under development, and the company expects to add 5,000 megawatts over the next couple of decades. The transmission grid of high-voltage electric lines is designed for electricity to flow bidirectionally, which means it can readily accommodate large utility-scale solar farms. But the distribution system of lower-voltage lines that deliver electricity to homes and businesses was designed for one-way electricity flow. Dominion has taken a go-slow approach to rooftop and other small-scale solar as it has learned more about their impact on the distribution system.
Rapid variations in solar output can create fluctuations in voltage and frequency that can damage customers’ machinery and equipment, said Curtis. “It’s not a deal breaker, but we have to be sure we understand the interactions.”
During the solar eclipse, output dropped to 10% of normal solar rating and then jumped back to normal, all within a few minutes. Power companies had to keep supply and load in balance on local circuits or risk adverse consequences. Said Curtis: “It’s an operational challenge.”
A modern grid provides more real-time information of what’s happening on the system, more intelligence about voltage and frequency, and the ability to predict problems before they occur. A smart grid also provides customers more information and control over their energy usage.
While Curtis spoke about the necessity of building a smarter grid, he did not say what upgrades Dominion has planned for its system or how much they might cost.
The other challenge is grid security, both physical and cyber. The “marquis moment” for Dominion came in April 2013 when unidentified saboteurs launched a coordinated attack on a Pacific Gas & Electric substation serving Silicon Valley, knocking it out of service and causing PG&E to reroute flows of electricity.
“The very next day, Dominion began to rethink our system,” said Curtis. Everyone from terrorists to hostile nation states are probing the grid. “We know it’s happening. It’s on the forefront of our minds. We have a team of people at Dominion specifically focused on these issues.”
There is no one approach to securing the grid. Dominion is assessing its vulnerabilities, hardening its facilities, and bolstering surveillance of the system, he said. “We recently completed a brand-new, state-of-the-art transmission center north of Richmond that is protected against electro-magnetic pulses and has armed protection,” he said.
State Secretary of Technology Karen Jackson said that the demand for reliable service is “at an all-time high” and is a growing concern in the state’s effort to recruit data centers. Two key infrastructure considerations for data centers are bandwidth and electricity. “We have to have the infrastructure that can keep pace, while also being respectful to the environment.”
Conversations like the one taking place between Dominion and the Northern Virginia technology community are vitally important, she said.
Tagged Dominion, James A. Bacon
Cities and counties across the United States are experiencing chronic fiscal stress, and the reason has nothing to do with Republicans or Democrats and everything to do with what Chuck Marohn calls the “growth Ponzi scheme.”
“Why are cities going broke?” he asked at a forum hosted by the Partnership for Smarter Growth, Coalition for Hanover’s Future, and the Virginia Conservation Network at Randolph-Macon College last night. “We can’t we keep the grass in the parks mowed? Why can’t we keep the library open past 5 o’clock?”
After World War II, the United States embarked upon a massive, society-changing experiment that departed from the accumulated wisdom of millennia of experience of building cities. That experiment, commonly referred to as suburban sprawl, changed the growth paradigm from building places with a pedestrian orientation to building places with an automobile orientation. Over the course of just two or three decades new zoning codes and highway construction transformed the character of cities across the country. Initially, that experiment seemed to work out well. Now the fiscal flaws are evident for all to see, and the system is on the verge of collapse.
In the post-World War II era, developers and government struck a deal: Developers would build a subdivision or shopping center, including roads and utilities, and then would turn over the infrastructure for local government to maintain. Early on, the arrangement seemed like a great deal for government. Taxes on the houses and commercial buildings generated loads of cash flow while the infrastructure cost almost nothing to maintain. In a typical cul de sac development in the mid-1990s, infrastructure would cost the builder $6,600 per development. Less visibly, localities had to spend thousands more on infrastructure outside the subdivision, such as arterial roads and highway interchanges. Everyone ignored the fact that it would take, say, 37 years to recoup the cost of all that infrastructure through property tax revenues. Because infrastructure costs little to maintain when it’s new, new subdivisions proved to be revenue gushers. But over time, roads required more and more maintenance and subdivisions began operating tax-wise at a net loss.
What was the solution? Build more new subdivisions and use the surplus revenues to cover deficits from the old subdivisions. Use good money to cover bad, like a Ponzi scheme. But at some point it’s impossible to build enough new subdivisions (strip malls, office parks, etc.) to cover the deficits. That’s where the nation is now, said Marohn. For thirty years, local governments enjoyed the “illusion of growth.” Now they’re facing the reality of chronic fiscal stress. Absent changed policies, they’ll follow Detroit into the abyss. For many, it is too late.
“We need growth so bad today that we’ll do all sorts of crazy stuff,” Marohn said. “We’re lending money to people we know can’t pay it back. We’re desperate for growth. We have to have it or everything falls apart.”
The United States is hitting the limits of its ability to fund more growth. There is no rabbit to pull out of the hat to rescue the nation from its predicament.
As an example, Marohn cited Lafayette, La., a city that is reasonably well run administratively yet experiences chronic fiscal stress. An in-depth analysis of its development patterns revealed that its downtown and older neighborhoods, which are compact and densely developed, net out fiscally positive but that the majority of the city, especially newer areas built according to suburban zoning codes, net out negatively. The median family in Lafayette makes $45,000 a year and pays $1,500 in local taxes. To cover the cost of the its growing infrastructure liability, the city would have to raise taxes to $9,000. “That will never happen,” he said. “Lafayette will have to make some very hard decisions about what to maintain and what to let go.”
Not all cities are in equally bad shape. Some grew more slowly and built less hop-scotch, low-density sprawl that inflated the expense-to-revenue ratio of its neighborhoods. Some have more flexible zoning codes that allow more adaptive reuse. And some are more willing to change than others.
“We should not accept decline as normal,” Marohn said. The answer is not some top-down Marshall plan. It’s the opposite — a bottom-up approach that emphasizes small, low-risk, high-return investments based on intimate local knowledge. Over time, small incremental improvements — bike lanes, cross walks, tree plantings, sidewalk widenings — can go a long way to rebuilding the tax base. The highest-return investments, he suggests, are those that enhance pedestrian and bicycle mobility. They make places feel safe and inviting. Their scale is a single block or intersection at a time.
The advantage of making small, safe bets is that if nothing gets better, you haven’t squandered much money. You haven’t mortgaged the farm, so to speak. But if the small bets do work out, you learn from experience and replicate the successes. In every community, Marohn says, there is a abundance of “pennies, nickels and dimes laying on the ground.” Over time, small improvements, leveraged by private investment, can create enormous value. “This is how we build wealth: slowly and incrementally.”
Marohn also abhors the rigidity of zoning codes and preaches the virtue of flexibility. Municipal planners suffer from the illusion that they can divine the future and anticipate the proper mix and location of residential, commercial and industrial property for the foreseeable future. But markets are too dynamic for anyone to predict long-term demand for different categories of real estate with consistent accuracy. A resilient city, he says, is flexible. A big-box building surrounded by a huge parking lot, typical of suburban development, is difficult to recycle into a different use. A single building set in a downtown street grid is very easy to switch from one use to another. Flexible development patterns like those found in downtown areas will prove more resilient in times of change than inflexible patterns. “Zoning codes are some of the most destructive things we have,” he said. “We need to rethink them.”
Thirdly, Marohn suggests that cities need to make it easier for entrepreneurs to bootstrap new businesses. While some 240 cities and regions across North America decided to chase the Amazon second headquarters, the economic-development deal of the decade, only one can win. Will Amazon HQ2 be a net gain to a community after a realistic accounting of costs and tax revenues and adjustments for incentives? Color him skeptical. It is more prudent, he says, to foster new business formation, which can be helped through a prudent relaxation of building codes, zoning codes and other regulations.
“If we play the Wall Street game, if we play the Washington game, we’ll get wiped out,” he said. By embracing new fiscal analytics, relaxing zoning codes, and embracing a philosophy of making small, low-risk, high-return public investments, America’s cities and towns can prosper.
Posted in Infrastructure, Land use & development
Tagged Boomergeddon, James A. Bacon
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