July 02, 2015

Many Virginia State Agencies Don't Track Federal Grants

Investigative reporter Kathryn Watson of Watchdog.org's Virginia Bureau reported last week on an audit by Virginia's Auditor of Public Account (VAPA) that shows (HT Townhall.com):

"Virginia does a haphazard job of monitoring federal tax dollars it passes along to local groups, and the state auditor’s office says that needs to change."

Watson continues her reporting, writing:

"Each year, about $2.5 billion federal tax dollars travel through Virginia state coffers and into the hands of local governments, nonprofit organizations and even some for-profit organizations.

"That amounts to somewhere around $300 for every man, woman and child in the commonwealth, but it’s hard to say where all of it’s going, or if it’s being used properly. It’s the middleman — the state agencies — that are responsible for tracking the audits of those dollars, and some aren’t doing their job, according to a new audit from Virginia’s Auditor of Public Accounts.

"Of the 16 middleman state agencies studied, three haven’t kept any tabs on the final recipients of federal tax dollars. Only three checked the federal award amounts against audited statements.

“The commonwealth of Virginia is not fulfilling all of its responsibilities as a pass-through entity,” the report found. “There were several sub-recipients who unknowing to the commonwealth did not appear to meet the audit requirements…”

"Comprehensive Services for At-Risk Youth and Families, the Virginia Department of Veterans Services, and Virginia Information Technologies Agency all failed to track federal dollars they handed off, the audit finds. State auditors didn’t study where the dollars went, so it’s impossible to tell whether they were used properly."

Watson also reported the responses of state agencies to the VAPA audit as well as another VAPA audit, which "pointed out the General Assembly has done nothing in 15 years to hold accountable the hundreds of local government-created “supervisory” entities that control hundreds of millions of taxpayer dollars." Read the remainder of her report here.

One wonders if any of the current members of Arlington County's delegation in the Virginia General Assembly have patroned legislation to hold those "local government-created 'supervisory' entities accountable for the millions of taxpayer monies entrusted to them, as described in the previous paragraph, rather than patroning legislation to satisfy special interests. Members of Arlington's delegation are:

Senate of Virginia

  • 30th District -- Adam P. Ebbin (D)
  • 31st District -- Barbara A. Favola (D
  • 32nd District -- Janet D. Howell (D)

House of Delegates

  • 45th District -- Rob Krupicka (D)
  • 47th District -- Patrick A. Hope (D)
  • 48th District -- R. C. “Rip” Sullivan (D)
  • 49th District -- Alfonso H. Lopez (D)

Growls readers are urged to communicate their concerns with members of the Arlington delegation. Contact information for members of the General Assembly can be found here  -- use one of the "quick links" to locate the senator and delegate who represent your district. And tell them ACTA sent you!

Kudos to the Franklin Center for Government & Public Integrity for its support of Watchdog.org. The Franklin Center is a non-profit organization that promotes a well-informed electorate and a more transparent government.

June 30, 2015

A Thought on the Politics of Delusion

"Exchanges established by the federal government are exchanges established by the state. Rachel Dolezal is black. Iran will honor an agreement not to develop nuclear weapons. ISIS is a JV team. There’s an epidemic of sexual assaults on college campuses. Michael Brown had his hands up and pleaded “don’t shoot.” Caitlyn Jenner is a woman. Obamacare is working. 2+2 doesn’t necessarily equal 4. The polar ice caps are disappearing. The IRS is doing a decent job. The border is secure.We’ve ended two wars responsibly. Hillary Clinton turned over all work-related e-mails. An $18,200,000,000,000 debt can grow without mention. People who burn down buildings and overturn cars aren’t thugs. The OPM hack is manageable. We’ve reset relations with Russia. Entitlement reform can be kicked down the road. We’re more respected around the world.

"When a nation engages in mass delusion in an era of worldwide terrorism, intense competition, and nuclear proliferation, things are unlikely to end well."

~ Peter Kirsanow

Source: His June 26, 2015, post at National Review's blog, The Corner (HT Thomas Lifson, American Thinker). Lifson would add another item to the list -- lower GDP is really a sign of a better economy).

June 28, 2015

Of Repeal of the Affordable Care Act and Federal Deficits

Last Thursday's U.S. Supreme Court decision to uphold that part of the Affordable Care Act (ACA) upholding health insurance subsidies to qualifying Americans received most of the media's news involving the ACA the past week or so. (see this in-depth Washington Post article).

Less attention, however, was paid to a report, dated June 19, 2015, from the Congressional Budget Office (CBO) about the budgetary and economic effects of repealing the ACA. In a nutshell, CBO said, "repealing the ACA would increase federal budget deficits by $137 billion over the 2016–2025 period." But CBO also said:

"For many reasons, the budgetary and economic effects of repealing the ACA could differ substantially in either direction from the central estimates presented in this report. The uncertainty is sufficiently great that repealing the ACA could reduce deficits over the 2016–2025 period—or could increase deficits by a substantially larger margin than the agencies have estimated. However, CBO and JCT’s best estimate is that repealing the ACA would increase federal budget deficits by $137 billion over that 10-year period."

CBS News' MoneyWatch column did cover the news of the CBO report here while the very liberal Politico reported the story here. National Public Radio (NPR), aka government radio, also covered the CBO report here. And in a Tuesday, June 23, 2015, column for Forbes magazine, Howard Gleckman began by writiing :

"This is what the Congressional Budget office really said about the budgetary and economic effects of repealing the Affordable Care Act: It has no idea.

"That, of course, it not what the political partisans are saying in the wake of CBO’s Friday release of a report on this exceedingly controversial topic.

"Backers of the law gleefully embraced CBO’s projection that repealing the ACA would increase the federal debt by $137 billion from 2016-2025 including macroeconomic effects, or by $353 billion under traditional scoring. ACA critics, by contrast, highlighted CBO’s projection that repealing the health law would increase economic output over the period. This is proof, they said, that the ACA is a millstone around the economy’s neck.

"But in reality, as CBO candidly admitted, it doesn’t really know whether repealing the ACA would increase the deficit or cut it, or boost the economy or hurt it."

So let's turn to Charles Blahous, a senior research fellow at George Mason University's Mercatus Center and public trustee for Social Security and Medicare. In an article published at both the Manhattan Institute's free-market economics think tank Economics21 and at the Mercatus Center, Blahous concludes:

"Again, CBO's latest does not provide enough detail for us to know how much repealing the ACA would lower federal deficits. But we can be highly confident that it would. In my 2012 paper on the fiscal consequences of the ACA I found that through 2021, only a little more than one-third of the Medicare savings credited to the ACA under the scorekeeping convention was actually new savings relative to prior law. Through 2025 we would expect the proportion to be still less.

"Thus, although the scorekeeping conventions require CBO to find that repealing the ACA would increase Medicare spending by roughly $800 billion, the actual figure is almost certainly below $250 billion--or, at least $550 billion lower than the directed score. Given that this total score shows repeal adding either $353 billion or $137 billion to the deficit, depending on whether economic feedback effects are included, the actual change in law under repeal would clearly reduce the deficit.

"All this can be verified by cross-checking CBO publications against one another (or by consulting other sources such as CRFB) to confirm that its scorekeeping conventions, as required by lawmakers, deviate significantly from actual law. Given the importance of these deviations with respect to Medicare spending, CBO should consider disclosing these realities more directly in future evaluations of the ACA, such as the one it may need to issue after King v. Burwell.

"In the meantime, however, we have yet another report showing the ACA's finances turning out worse than previous projections and, properly understood, also showing that repeal--whatever its other policy virtues or drawbacks--would improve the fiscal outlook."

So, If you suspect the mainstream media is spinning the news, it's worth asking whether those reporters and editors are acting, as Forbes' contributor Howard Gleckman warns, as political partisans. If so, it's worth turning to a free-market or libertarian think tank for an alternative opinion.

June 27, 2015

Another Month, Another 'Porker of the Month

Porker of the Month is a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.

Citizens Against Government Waste (CAGW), which grew out of President Reagan's Grace Commission, has "named Rep. Randy Forbes (R-Virginia) its June Porker of the Month "for his absurd attempt to submerge the cost of a submarine program."

CAGW justified their selection of Rep. Forbes, who represents Virginia's 4th Congressional District (see map), this way (emphases in the original):

"The Navy’s Ohio-class submarines transport 70 percent of America’s nuclear arsenal.  They were first built in the 1970s and are rapidly approaching retirement age.  In April 2014, the Navy released specifications for 12 new subs at an estimated total cost of $58.8 billion, or $4.9 billion per sub.  But in December 2014, the Congressional Budget Office estimated that the total cost would exceed $90 billion; $12.4 billion for the first sub and $6.6 billion for each additional one, or an average of $7.5 billion per sub, which is 53 percent higher than the original estimate.

"While the need for the new subs is not in dispute, Congress usually provides such funds through the acquisition and procurement account in the defense authorization and appropriations bills.  But in 2014, Rep. Forbes sponsored a new “National Sea-Based Deterrence Fund,” which would run afoul of the standard budget process and keep the new sub program off-budget.  Rep. Forbes claimed in a June 2015 Politico article that the subs require this off-budget account because their cost could overwhelm the Navy’s budget and crowd out other procurement programs.  This includes Forbes’s own district, which according to his website encompasses “our nation’s most important military assets and installations,” which “directly employ 34,168 active duty members and civilian jobs.”

"Faced with a similar national security need to modernize outdated equipment in 2002, another member of Congress attempted to be equally creative in keeping a major procurement program off budget.  Then-Sen. Ted Stevens (R-Alaska) tried to set up a $21 billion off-budget lease to procure new Air Force refueling tankers to replace an aging fleet.  After this concept was roundly criticized by groups like CAGW and members of Congress, led by Sen. John McCain (R-Ariz.), the tanker procurement was put back into the Air Force’s normal budget.

"Apparently, Rep. Forbes has ignored the outcome of this prior attempt to undermine the budget process.  He has argued that the submarine project “is a very big lift, and it has to get done.”  Therein lies the trouble with budget gimmickry: “It has to get done” can be used to justify off-budget spending for virtually any program, for any purpose, on either side of the political aisle.  Rep. Forbes would have Congress meander down a slippery slope to fiscal disorder, where the taxpayers’ money would be frittered away through furtive funding schemes with limited oversight and accountability.

"In order to enable the Department of Defense to spend the taxpayers’ money more effectively, Sen. McCain has proposed changes in defense acquisition that would devolve procurement authority from the Office of the Under Secretary of Defense to the acquisition executives of the individual services.  The plan also provides incentives for containing cost overruns and institutes penalties for reckless spending on programs.

"CAGW President Tom Schatz said, “Rep. Forbes’s attempt to circumvent the normal process does a disservice to taxpayers and should be quashed.  In order to pay for essential programs, less critical programs should be set aside and waste, fraud, abuse, and mismanagement should be eliminated.  Budget gimmicks should never be the solution.”

Kudos to Citizens Against Government Waste (CAGW) for their continuing efforts on behalf of America's taxpayers.

We urge Growls readers to ask their members of Congress what they are doing to bring fiscal sanity to federal spending. Contact information is available at Thomas (use left-hand column). Taxpayers living in Virginia's Arlington County, can contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response, and tell them ACTA sent you.

June 26, 2015

Arlington County Board Chair's 'State of the County' Speech

In a speech on Wednesday, June 24, the Chairman of the Arlington County Board gave what was billed as her "State of the County" speech to the Arlington Chamber of Commerce. As reported yesterday by Scott McCaffrey for the Arlington Sun Gazette, Board Chairman Mary Hynes told those attending the Chamber event that "Arlington must confront ‘multi-dimensional’ challenges."

McCaffrey began his reporting of the "State of the County" speech, writing:

"Prioritizing economic development while keeping focus on issues ranging from affordable housing to siting of public facilities – and not losing sight of community input – are the challenges for current and future Arlington leaders, County Board Chairman Mary Hynes told the business community on June 24.

"“We have decades of strategic investment to build on,” Hynes said at the annual “State of the County” address, sponsored by the Arlington Chamber of Commerce and held at the DoubleTree by Hilton Crystal City.

"The goal for current and future leaders is to develop “the second generation of smart-growth – learn from what we did before and apply it to new circumstances,” Hynes said.

“Our challenges are real and they are multi-dimensional,” Hynes said. “Those incredible ‘ups’ that we had [during the years when development around Metro stations brought major growth] are not going to come Arlington’s way again.”

"Facing record-setting office-vacancy rates that top 20 percent countywide and surpass 30 percent in some corridors, the county government has put additional resources into economic-development efforts.

“The team [at Arlington Economic Development] is out there,” Hynes said, noting recent forays to conventions featuring retailers and entrepreneurs. She added that the county government, which for years offered little in the way of financial incentives for businesses to relocate in the county, has re-evaluated that policy – although it remains a work in progress, she said."

We growled about the challenges of economic development faced by county government in an extensive Growls on March 13, 2015. We growled after the county's new chief of economic development proposed a costly "Way Forward" plan. That Growls eventually became the basis of a report on Arlington Economic Development, which the Arlington County Civic Federation's Revenues & Expenditures committee presented to Civic Federation delegates at the June 2, 2015 monthly meeting. (the report has not yet been posted to the Federation's webpage; see the Growls update below if it has).

Arlington economic development was the topic of the June 10, 2015 meeting of the Arlington Committee of 100 (but the You Tube video of the meeting has not been posted).

The county's spinmeisters also released a press release yesterday, and included three bullet points:

  • A fundamental questioning of ourselves”
  • Opportunity to be leading edge of 2nd generation Smart Growth
  • Must honor the values that have guided us for decades

The entire press release is worth reading, especially the paragraph that talks of Arlington's "good bones," i.e.:

"What Hynes called the County’s “bones” — its location on the doorstep of the nation’s capital, its airport, the Pentagon, its excellent public schools, its “smart, thoughtful, strategic-thinking residents,”  and its transportation networks “continue to be incredibly strong,” she said. 'We have decades of strategic investment to build on.'"

While so-called Smart Growth may have benefited Arlington's economic development in the past, that is no assurance it will do so in the future, and, unfortunately, there seems to be no indication it will be studied to ensure it's the proper path to the future. Nor is there any indication the new course forward will include an annual evaluation of economic development, as suggested in R&E's AED paper, which could possibly have identified a rising commercial/office vacancy rate much sooner.

Instead, the County Board should be looking at streamlining taxes to incentivize developers and entrepreneurs as well as eliminating some of the environmental demands placed on developers, e.g., questionable LEED standards. The Board should also look to streamline the bureaucracy to reduce the time needed to obtain permits and site plans. For example, in our June 23, 2015 Growls, we noted the site plan for a renovated Ballston mall has now been sitting in the "belly of the bureaucracy" for 11 months rather than a more normal 60 days.

Growls readers are urged to contact the Arlington County Board if you have comments or concerns about Arlington County's 'state of the union." You can reach the Board by clicking-on the link below, or call them:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

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Items in Growls are written by individual ACTA members and do not necessarily represent the views of the Arlington County Taxpayers Association, Inc. Please send comments about Growls to The Growl Meister