Virginia Small Businesses Lose Again?

To his credit, Governor McDonnell has said that making Virginia the best state for small business as well as the best state in which to do business is an important objective for his administration. 


In rhetoric then, Governor McDonnell is a step ahead of his predecessors, who, among other things, drafted economic development strategies with no small business representation (Governor Gilmore did that) and compromised the state's ability to coordinate services to small businesses by cutting the state funding match for the SBA funded small and women business centers across the state (Governor Warner did that). 

Unfortunately, though, two recent actions don't appear to match the Governor's rhetoric or advance Virginia in the direction of becoming the best state for small business:

1) The Governor's decision to use public funds to bring two Amazon distribution centers to Virginia while promising Amazon that it will continue to be exempt from collecting sales tax from Virginia customers; and

2) The Governor's decision to recommend the elimination of the Virginia Small Business Advisory Board while continuing the Small Business Commission.

Unfair Competition
The Amazon decision appears to continue the past practice of elevating the seduction of out of state businesses to come to Virginia over the interests of and support for existing Virginia businesses. Normally, any business with a physical presence in Virginia is required to collect and remit sales taxes for all sales.  According to the Virginian Pilot, however, the Governor has agreed to allow Amazon to avoid this obligation  by using separate corporations to set up the distribution centers:

... state officials said Thursday that Amazon won't have to pay sales taxes after it builds the new warehouses, either, because the facilities are being built and operated by a separate distribution company, not the actual retail business.  

"This was solely about jobs and economic development here," said McDonnell, calling the sales tax issue a discussion for "another time."

This means that while the Governor has been effusive in welcoming Amazon to the Virginia corporate family, the company will continue to have an unfair advantage over Virginia-based bricks and mortar retail businesses who have no choice but to collect sales taxes and have had to carry the additional burden of paying those taxes on an accelerated basis over the past few years.


According to the Washington Post, the Virginia Retail Federation, the Virginia Retail Merchants and the Alliance for Main Street Fairness have called on Amazon to collect and pay sales taxes whether legally required to or not:

“Every retailer should be playing by the same set of rules and let fair competition determine winners and losers in the marketplace,’’ the association said in a statement. “It is not appropriate for state and local tax dollars to be used as economic development incentives unless Amazon agrees to collect and remit state sales taxes. If they do not make this agreement, Virginia is likely to be a net job loser with this deal.”

Amazon was reported to have gotten $4 million in incentives as a part of the deal to bring 1350 jobs to Virginia.  The question is whether these jobs at this cost, which enhance Amazon's ability to compete in the region, are worth the continued loss of small business sector jobs among Virginia retailers who can't make up the difference customers perceive in the cost of goods because of the tax free internet sales, even though legally the customers are obligated to pay this tax as a use tax when they file their income taxes.


Silencing a Voice for Small Business Owners

The decision to eliminate the Virginia Small Business Advisory Board (VSBAB) is a decision to eliminate the only mechanism that assures Virginia small business owners a direct voice in advising the Governor and the administration on economic development and other policies that affect Virginia small businesses.  

The VSBAB is made up of 14 business owners (11 from each of the congressional districts and 3 at large) who volunteer their time and expertise to advise the Executive Branch regarding small business issues. The Board's members are appointed by the Governor for 4 year terms, and can only serve two terms.  These citizens, of which I am one, bring the real world experience of small business owners to bear on state policies affecting small business. 

The key statutory responsibilities of the VSBAB are to recommend to the Governor and the administration policies that will enhance the "growth of small business" and to be a resource to the Governor and others as they conduct the "economic development efforts of the Commonwealth."  As mentioned above, the lack of a strong small business voice in the administration led to the short-sighted cuts in the state budget  (under Warner in 1992) that ended the state role in guiding the small business centers across the state.  Over the last few years, the VSBAB has provided advice and recommendations to policy makers on the definition of "small business" for procurement and other purposes and successfully argued against the proposed merger of DMBE, DBA and VEDP as not helpful to small businesses.

In contrast, the Small Business Commission is a legislative branch agency made up of 10 legislators and 4 citizens. While the citizens are required to have demonstrated "small business expertise," none of them are required to be small business owners.  The citizen members of the Commission serve two year terms with no limit. The Commission's role is to "study, report and make recommendations on issues of concern to small businesses in the Commonwealth."  The Commission has had a history of meeting rarely or sporadically over the years.

If the Governor's purpose in eliminating the VSBAB is to save money, the fact is that the Small Business Commission costs the taxpayers more than the VSBAB.  Legislative members of the Commission receive compensation of $200 per day for attending meetings plus per diem for expenses ($169 for Senate, $135 for House). Citizen members of the Commission are authorized $50 a day plus expenses.  The Code says that VSBAB members serve without compensation, and members have for the last several years voluntarily refrained from seeking any reimbursement for expenses, unless extraordinary (like travel from far Southwest).

If the Governor's purpose is to enhance efficiency by eliminating duplication, it would make more sense to recommend that the Small Business Commission be eliminated than the VSBAB. The VSBAB is the only mechanism that allows small business owners a direct voice in advising the Governor and the administration on policy. Legislators serving on the Small Business Commission have other means to participate in policy development on committees and subcommittees of the House and Senate that meet regularly during Session and also between sessions.  Citizen members of the Commission are a small minority of the membership and do not have to be business owners.


Conclusion
It would seem, then, that both of these decisions can be seen as adverse to the interests of the small business community and the Governor's express goal of making Virginia the best state for small business.  Both deserve to be reviewed carefully by the Governor and by legislature during the 2012 session with an eye toward leveling the playing field and continuing to afford Virginia small businesses a direct voice in advising on state policies.


NOTE: I serve on the Virginia Small Business Advisory Board having been appointed and reappointed by Governor Kaine.  My current term expires in 2012 whether the Board is continued or not.

Lt. Governor Not a Member of the Senate; Can't Vote on Organization

The question whether the Lieutenant Governor can vote on the organization of the Senate is not a political question but is one of constitutional import.

The Lieutenant Governor is a member of the Executive Branch and is not an elected "member" of "the Senate" as defined in Article IV, Section 7 of the Virginia Constitution. Therefore, it is unconstitutional for him to participate in organizing the Senate since he is not one of the 40 elected Senators who make up "the Senate."

It would also be a violation of the separation of powers clause of the Virginia Constitution, Article III, for the Lieutenant Governor, who is a member of the executive branch of government pursuant to Article V, Section 13, to cast a deciding vote on the organization of a body of the legislature.  As a member of the executive branch, he is specifically prohibited from exercising "the powers properly belonging to the [legislative branch]."


The provision for the Lieutenant Governor to case a vote in the case of an "equal division" does not apply to the organization of the Senate as a legislative "house" since the constitution specifically reserves the organization of the Senate to the "body" and to its elected "members."

I've set forth the constitutional provisions below for information.

Article III
Division of Powers

Section 1. Departments to be distinct.
The legislative, executive, and judicial departments shall be separate and distinct, so that none exercise the powers properly belonging to the others, nor any person exercise the power of more than one of them at the same time; provided, however, administrative agencies may be created by the General Assembly with such authority and duties as the General Assembly may prescribe. Provisions may be made for judicial review of any finding, order, or judgment of such administrative agencies.

Article IV

Legislature

Section 1. Legislative power.

The legislative power of the Commonwealth shall be vested in a General Assembly, which shall consist of a Senate and House of Delegates.

Section 2. Senate.

The Senate shall consist of not more than forty and not less than thirty-three members, who shall be elected quadrennially by the voters of the several senatorial districts on the Tuesday succeeding the first Monday in November.

Section 7. Organization of General Assembly.

The House of Delegates shall choose its own Speaker; and, in the absence of the Lieutenant Governor, or when he shall exercise the office of Governor, the Senate shall choose from its own body a president pro tempore. Each house shall select its officers and settle its rules of procedure. The houses may jointly provide for legislative continuity between sessions occurring during the term for which members of the House of Delegates are elected. Each house may direct writs of election for supplying vacancies which may occur during a session of the General Assembly. If vacancies exist while the General Assembly is not in session, such writs may be issued by the Governor under such regulations as may be prescribed by law. Each house shall judge of the election, qualification, and returns of its members, may punish them for disorderly behavior, and, with the concurrence of two-thirds of its elected membership, may expel a member.

Article V

Executive

Section 13. Lieutenant Governor; election and qualifications.

A Lieutenant Governor shall be elected at the same time and for the same term as the Governor, and his qualifications and the manner and ascertainment of his election, in all respects, shall be the same, except that there shall be no limit on the terms of the Lieutenant Governor.

Section 14. Duties and compensation of Lieutenant Governor. 

The Lieutenant Governor shall be President of the Senate but shall have no vote except in case of an equal division. He shall receive for his services a compensation to be prescribed by law, which shall not be increased nor diminished during the period for which he shall have been elected.

2012 Virginia General Assembly Outlook -- Immigration Policy Issues

Virginia General Assembly

2012 Pre-Session Report

by Claire Guthrie Gastañaga

October 31, 2011

Virginia has a long history of passing legislation to identify and seek removal of unauthorized immigrants, beginning with a law enacted during the eugenics movement that required Virginian's mental health institutions to check immigration status on admission and report to the federal authorities anyone not in the country legally.  Beginning in 2003 and reaching a crescendo in 2008, legislation has been introduced in every session of the General Assembly that directly or indirectly affects Virginia's immigrant communities and those who serve. 

The number and scope of bills has varied depending on political and environmental factors.  The peak year to date, 2008 when over 130 bills were introduced, was driven by hotly contested legislative elections in certain legislative districts in which Democrats and Republicans, alike, made immigration related issues a key part of their campaign platforms and voter communication.  The 2011 election cycle has seen some of the same rhetoric we saw in the 2007 election cycle, and the tone reflects increasing national attention on enforcement only approaches to immigration reform and passage of draconian, wide-reaching legislation in Arizona, Alabama and Georgia.

Over the years, Virginia has enacted nearly 50 laws with direct effects on immigrants and aliens. While positive legislation has passed that deals with human trafficking and wage theft, most of the laws now on the books in Virginia are restrictions on the rights or benefits of "aliens" or immigrants, including the rights and benefits of persons lawfully present in the United States.

Here's a summary of key laws in effect in Virginia and the outlook for legislative action in the 2012 General Assembly Session:

I. Law Enforcement

There have been a series of bills enacted to increase the ability of law enforcement to identify and move toward deportation "criminal aliens" -- documented and undocumented immigrants charged with and/or convicted of criminal violations of Virginia law.  Prior to 2008, Virginia law required immigration status checks after conviction of a crime upon entry into a jail or prison and again as a condition of probation or parole.  Since 2008, Virginia law also requires that immigration inquiries be made of every person taken into custody on a criminal charge. In addition, Virginia is a statewide participant in the Secure Communities program that forwards fingerprints of those arrested to federal authorities for an immigration status check. Another law passed in 2008 establishes a presumption against bail for persons in the country without authority who are accused of committing certain serious criminal offenses.

Passage of legislation increasing the focus on determining the status of individuals taken into custody by police is seen as likely to deter people from coming forward to report crimes or to seek services if they are victims of crime. Legislation intended to mitigate this adverse effect by protecting victims and witnesses to crime has passed the Virginia Senate three times unanimously, but has been rejected in a committee of the House of Delegates. This legislation would have established a statewide policy against routine inquiries into the immigration status of individuals who are victims or witnesses to crime and are cooperating with authorities.

Outlook for 2012 General Assembly Session:

Legislation defeated in the past but likely to be introduced again:

1) bills that give line officers increased authority to take people into custody on minor offenses, including driving without a license;

2) legislation to require or permit immigration status checks whenever someone is stopped lawfully by the police (not enjoined by the Alabama Court); and

3) legislation to provide additional 287g authority at the state and local level.

New legislation likely to be copied from other states:

1) legislation to require that persons caught driving without a license be taken into custody if the police officer cannot confirm, have their status checked by a magistrate and, if found to be in the country without authority, be detained until trial or turned over to federal authorities (not enjoined by the Alabama Court); and

2) legislation to make it a state crime not to carry immigration documents (not enjoined by the Alabama Court).

II. Business and Employment

Demands continue to increase that the General Assembly impose sanctions on employers who hire persons in this country without the legal authorization to work.   To date, Virginia has enacted the following laws that affect Virginia employers and contractors:

1) a longstanding law making it a misdemeanor to hire an unauthorized worker (in effect since1977 but likely unconstitutional);

2) a  requirement that every state and local contractor sign an agreement to abide by federal  immigration laws;

3) authority for the State Corporation Commission to revoke the right of any employer to do business in Virginia if convicted of federal immigration law violations;

4) a requirement that state agencies use e-Verify to check new workers; and

5) a requirement that state contractors with more than 50 employees seeking contracts in excess of $50,000 use e-Verify to check new workers.

Outlook for 2012 General Assembly Session:

The following bills defeated in past sessions are likely to be reintroduced this year:

1) legislation to require all employers, all state and local contractors, and all state license holders (like doctors and lawyers) regardless of size of business to use e-Verify;

2) legislation to authorize private lawsuits or lawsuits by the Attorney General against employers who are alleged to have hired undocumented workers (currently enjoined from going into effect in Alabama);

3) legislation to limit the use of foreign languages in the workplace;

4) legislation to require proof of legal presence to get a business or professional license; and

5) anti-harboring legislation that makes it a state crime to transport or conceal a person who is in the country without authority (currently enjoined from going into effect in Alabama).

New proposals likely to be copied from other states:

1) A bill to establish a state crime applicable to immigrants soliciting work or working without legal authority (an anti-day laborer bill) (currently enjoined from going into effect in Alabama);

2) legislation to prohibit tax deductions for wages paid to an unauthorized immigrant (currently enjoined from going into effect in Alabama);

3) legislation to ban enforcement in court of any contract made with an unauthorized immigrant (with limited exceptions for medical care, food) (not enjoined by the Alabama Court); and

4) legislation to make it a crime to enter into a business transaction with an unauthorized immigrant (not enjoined by the Alabama Court).

III. Social and Medical Services

Virginia passed a law in 2005 requiring proof of legal presence for state welfare and medical benefits.  Other legislation to limit access to services by undocumented immigrants has been unsuccessful, but remains a perennial topic of legislators.

For the first time in the 2011 legislative session, there was interest on the part of some legislators, immigrant advocates and health care providers in closing the loophole that disqualifies legal immigrants for Medicaid until after 5 years of residence.   Preliminary studies show that investing in preventive care, particularly for pregnant women, can reduce long term costs imposed on the health care system.

Outlook for the 2012 General Assembly Session

Bills considered in past sessions and likely to be reintroduced this year include:

1) legislation to require all recipients of state and local funds to insure no services paid for with such funds were made available to anyone not lawfully present;

2) legislation to restrict the ability of state and local agencies to offer services or print materials in languages other than English, potentially driving up the cost for service providers that are recipients of federal assistance required to provide language access;

3) anti-harboring legislation that would impact the ability of charities to offer food, shelter or transportation to anyone in the country without authority (currently enjoined from going into effect in Alabama);

4) "anti-sanctuary" laws that authorize individual state and local employees to report alleged immigration law violations and prohibit interference in such private action by state or local officials; and

5) positive legislation to expand eligibility for Medicaid benefits for some legally present immigrants.

IV. Education

Virginia has long had in place strict domicile requirements that make it impossible for undocumented students to qualify for in-state tuition at Virginia colleges.  All of the four year institutions currently have policies against admitting students who are undocumented, even as out of state students.

Efforts to pass legislation prohibiting admission to public post-secondary education and to codify prohibitions on in-state tuition have been introduced year after year and defeated.

Similarly, legislation to require local school divisions to count students who are foreign born and to require proof of legal presence has been defeated.

A state level "Dream Act" passed the Senate with bi-partisan support but died in the House.  This legislation would have offered tax-paying undocumented Virginia residents who graduate from Virginia schools the chance to be eligible for in-state tuition if they are in the process of adjusting their status.  It would not have overridden policies at the state institutions against admission of such students, however. 

There has been enhanced recognition that there is a need for increased state support for programs to help immigrants along the path to citizenship and full civic engagement, and for additional resources to help local school divisions address limited English proficiency both among school age children and adults.  Ongoing budget shortfalls have crushed hopes for passage or funding of such initiatives but there is continued interest among legislators from impacted localities across Virginia.

Outlook for the 2012 General Assembly Session:

Legislation introduced and defeated in the past likely to be reintroduced includes:

1) legislation to ban attendance at Virginia public colleges by undocumented students;

2) legislation to prohibit undocumented students from qualifying for in-state tuition;  

3) legislation to require local school divisions to ascertain the citizenship or immigration status of all students and to make reports to state authorities regarding the number of undocumented students, the number of foreign born students and the number of students needing English as a second language courses (not enjoined by the court in Alabama); and

4) possibly, the state level "Dream Act," although the negative focus during the 2011 elections on the votes of legislators who previously supported the state level "Dream Act" make it highly improbable such a bill would pass the Senate in the 2012 Session.  There continues to be no chance it would get out of committee in the House of Delegates, even if it were to pass the Senate.

V. Housing

In past legislative session, lawmakers, particularly those from Northern Virginia, have focused significant legislative efforts on measures to "crack down on" those who violate overcrowding ordinances, including giving enhanced enforcement tools to zoning administrators, increasing fines for violators and enacting new limits on the number of unrelated persons who may live in a single family home.

Little thought has been given to the precedent set in each of these areas, the probability of disparate enforcement or the likely long term adverse effect on the availability of affordable housing of such measures. As the availability of affordable housing continues to atrophy, there are quality of life implications that have not been carefully considered in the emotionally charged atmosphere that continues to permeate this discussion.

Outlook for the 2012 General Assembly Session

Legislation copied from other states likely to be introduced this session:

1) restrictions on contracting by or with undocumented persons that would make unenforceable contracts for sale or lease of real estate (not enjoined by Alabama court); and

2) legal presence requirements for real estate sales or leases.

Was Columbus Really a Jewish Nobleman?

Columbus Day and the Jewish high holy days are just behind us.  Got me thinking about a note I posted to Facebook last year, and I decided it was worth republishing in my blog this year. 


Here it is:


I just finished reading a Da Vinci Code type book about Columbus, Codex 632, by Jose Rodriques Dos Santos, translated from Portuguese. While not a great book and a sometimes tedious read, the book, reviewed in the Post here, posits the theory that Columbus was a Portuguese nobleman with Jewish heritage who was forced to hide his real identity.

But there were some historic facts to learn along the way. Among other things, the book taught me something that I didn't know before ... that Columbus' voyage to America was launched at the same time Jews were expelled from the Iberian peninsula by the Spanish monarchs. His diary of the voyage to discover American begins: "In the same month in which their Majesties [Ferdinand and Isabella] issued the edict that all Jews should be driven out of the kingdom and its territories, in the same month they gave me the order to undertake with sufficient men my expedition of discovery to the Indies."

The Spanish expulsion order of 1492, forced 200,000 Jews to leave the Iberian peninsula or convert (or pretend to convert) to Christianity (hence the term New Christians used to descibe some Jews remaining in Portugal in the 15th century).

Once again it becomes clear that religious intolerance and persecution is not a sometime thing. Nor is it a fault of one religion. So, even bad fiction can open your eyes to new learning that provides additional perspective from which to view current events.

Steve Jobs: How to live before you die | Video on TED.com

Steve Jobs commencement speech at Stanford. Worth watching. A man of keen insight, vision and a strong, integrated sense of self.
Steve Jobs: How to live before you die Video on TED.com