For the third straight year — since Forbes started giving the honor — the magazine has named Virginia the best state for doing business.

W00t!

Quoth:

Virginia remains an excellent location for new or existing businesses. It has the best regulatory environment by our count, thanks to the second-best incentive programs in the country–as well as the fifth best tort atmosphere. Other high points include energy costs 30% below the national average and an educated labor force fueled by its proximity to Washington, D.C., and top colleges like (sic; should be "such as") the University of Virginia and William and Mary.

The rankings "measure states on six main areas of importance: business costs, labor supply, regulatory environment, current economic climate, growth prospects, and quality of life." ("Measure" is a strong word — most of those are subjective. But still.)

And now for a little schedenfreude:

Business costs are weighted the most, but low costs were not enough to keep Louisiana and  West Virginia from being the bottom two in our ranking.

Still, we can’t rest on our laurels. Our lead over #2 Utah is "razor thin." [Snarky rationale for Utah's high score deleted.] Plus, "Driven by higher labor costs, business costs in Virginia jumped, and are now approaching the national average."

And the big story, per Forbes, is Georgia, which has jumped from 15th to 5th place. Major lessons to be taken from those peach-eaters: Think international. Georgia has been doing it for a while, including opening an economic development office in Seoul 22 years ago. Result: Kia Motors is going to open a $1.2 billion car manufacturing facility in West Point, Ga. that will employ 2,500 people directly, "and another 5,000 or so workers will be needed for the numerous auto suppliers popping up around the Kia site."

Georgia has also opened offices in Beijing, Mexico City; Munich, São Paulo, and Tokyo.

In an amazing coincidence (really, it is), the next issue of Commonwealth magazine will focus on — wait for it — working with immigrants. Cool, huh?

It would appear that Gov. Kaine thinks so. (thanks to Richmond Sunlight for pointing out this article)

Kaine is proposing a statewide 25-cent increase in the grantors tax, which is now 10 cents per $100 of assessed value, that owners pay on the sale of a house.

First, the grantor’s tax is paid based on the sales price of the house, not (thanks, Danilo) or the assessed value (still not corrected five days after the original article was published).

Nuts and bolts - currently the median price in the Charlottesville area is about $275,000. Thus, the grantor’s tax paid by the seller on that particular transaction would be about $275 - and that’s a lot of money! If the tax is increased to 25 cents $687.50. Note also that this tax is paid only when a property sells (which is happening less and less frequently).

Make no mistake - Virginia’s (and the localities’) transportation systems need help; they need maintenance and they need new infrastructure - roads, bike paths, rail lines - but taxing only one segment of the population that uses the system is wrong. It is difficult to get hard, accurate data on what percentage of people in this area own their homes, but let’s assume it’s anywhere from sixty to seventy percent. Thirty to forty percent of people in the area won’t pay this tax, yet they will still use our roads, buses, etc. This is not a question of fair, but one of whether this is a reasonable proposal.

One reason that the grantor’s tax is proposed is because it is a bit of a hidden tax - it’s just another one of those fees that gets thrown together on the HUD-1 at closing. In the hot market, no one questioned the tax; now every nickel counts.

Why not a broad-based tax that everyone would pay (gas tax), other than lack of political and intestinal will and fortitude?

To target one segment of the population for a tax that needs to be focused on the entire population, regardless of the state of the housing market, is not right.

The best prediction from the Washington Post article goes to lobbyist Charlie Davis -

“At the end of the day, maybe putting a ‘lockbox’ on transportation funds, maybe a local taxing authority, but that is it. Give Kaine credit for pushing for something. The Republicans can be tagged as obstructionists but . . . Kaine came back with almost the identical plan that was shot down last year, so which is more foolhardy? But the session will provide ample opportunity for a lot of social interaction to discuss the presidential campaign and enjoy some wonderful cuisine at the Capitol snack bar.”

And he’s probably right.

Related posts -

Whom should we tax?

A few Transportation bills

Text of Governor Kaine’s speech to the General Assembly

Transportation talk revs up in Richmond

Too funny not to post - Copy of the Republican Transportation Plan

This week I received an e-mail from the Virginia Real Estate Board that, among other things, advised the schools that the requirement for CE and PLE instructors have changed. This is a good start, but we must do better…

Up to this point, schools submitted their classes to VREB for credit and included an instructor’s name and bio. There wasn’t much more required than a loose idea that the instructor could teach the topic. The new requirements state that the instructor must have three years experience in their area of instruction, letters of reference, etc… I am a fan of high quality instruction, but I am not sure that we’re attacking the issue of practitioner competency from the correct angle. I fully agree that it starts with the instructor. Not everyone who is teaching is effective. These requirements, although a bit cumbersome, will help.

Beneficial Changes?

There are other changes going on this year as well. Two significant changes are coming up as of July 1, 2008. The first is that licensed Brokers (Associate, Supervising and Principals) will be required to earn eight additional hours, on top of the limited services two hour requirements and the 16 hours of Continued Education. It’s obviously a good move to require those who carry the title of broker to get that higher level of training that most consumers perceive the broker as having. I’ve been surprised at the number of Associate Brokers who have balked at this requirement. I don’t even know what to say about that, other than the fact that it’s necessary and it’s only one extra day out of the 730 that you have between license renewals.

The other significant change is that VAR and VREB worked together to have legislation passed to require agents licensed after July 1, 2008 to obtain 30 hours of Post Licensing credit in the first 12 months of licensing. The theory, as I understand it, is that there are obvious failings in the pre-license program, as the 60 hour requirement does not typically carry information about the practical practice of real estate. There is so much theory and principle that things such as drafting a contract, short sales and marketing simply don’t find their way into the training.

I fully support the idea that the 30 hours should be “everything that we should have learned in pre-licensing and did not” but I think we’re going to see the nature of unintended consequences. Having sat as an association staffer now for the past few months and getting many daily phone calls from agents who find the relicensing program complicated, I have found that many (most) are taking the path of least resistance and simply taking an all inclusive on-line program. Many of these agents are very honest that the 30 hours can be gotten in 10 hours and they can do it while watching television.

Online Education Isn’t Cutting It

I’ve ventured through some of these online programs, and they can be done in far less time, than the “learner” is given credit for. At some point I have to ask: “Why do we even bother requiring CE or PL hours?” Almost all adult learning studies I’ve reviewed show that online learners have a much lower retention rate than those who learn in a classroom. The relicensing process for many is too complicated and frustrating to keep track of and they feel that there is no other option but these online classes. To compel the issue even further, most schools only have a limited number of these classes approved and don’t offer them often enough.

Learners have to take 30 hours, with 15 of them being in mandatory topics and the other 15 in a variety of electives. No one can get credit for taking any one class more than once. So, if I take “Short Sales” and get my three hours, but feel I need to take it again, I will not get an additional three hours, unless I take that topic through a different school.

How To Gauge The Retention

However, even aside all these issues, my real concern is that we never establish a mechanism by which to gauge the retention of the student. How do we know that the student really learned anything? What’s the point of requiring the student to meet certain criteria, if we’re not evaluating the student to see if they retained the information? I know that by suggesting that written evaluations be implemented I will become the least favorite person here, but really, how can we otherwise gauge our effectiveness? If the student is required to pass a written evaluation, then the instructor will be sure to deliver that material better and the learner will pay more attention.

Here are my suggestions:

First, we should consider requiring all mandatory PLE and CE classes be in a classroom setting, with a written evaluation. (Otherwise, what’s to stop an agent from reading a romance novel or comic book for the three hours I am supposed to be taking ethics?)

Second, electives can be taken in a classroom or online, but if they are taken online than it should require some mechanism to ensure that the learner is interacting at intervals that equal the clock time of the program. So, maybe you have to have mouse or keyboard activity every five minutes for the three hours, or you have to start all over. The technology is out there. All online training should require written evaluations at the end of the course.

Third, licensing and relicensing should be more relevant to the discipline of the practitioner. I am curious to see if anyone else thinks that Commercial, Residential and Property Management should have different licenses, with separate pre-licensing and separate post licensing requirements. There are a lot of different litigious pitfalls involved with these various types of practice and it seems that most all of pre-licensing and post licensing programs are directed to residential.

There are folks smarter than I am looking at the issues and overhauling as we go, but I just don’t feel our current structure is as effective as it can be. I am sure that there are some solid objections to these concerns, but if we’re all interested in improving the competency of agents than we need to find a better way to proceed in the future.

As tempted as I am to fire off a snappy (read: snippy) response to some of the misunderstandings contained in Frank LLosa’s recent post about RPAC, I’m reminded of Seth Godin’s admonition that miscommunication is almost always the fault of the communicator, not the recipient. So if Frank has his facts wrong about something VAR does…especially something so essential to his business as RPAC…it’s likely VAR’s fault for not communicating more thoroughly or frequently or clearly.

So, herewith, a primer on RPAC for them what want or need to know:

1. RPAC is the largest PAC in America. RPAC of Virginia is the biggest business PAC in Virginia. Big deal? Heck, yeah. When it comes to the funding of a Political Action Committee, size matters…at least it does to candidates and elected officials. The better funded your PAC, the more likely elected officials are to think twice before doing something that would negatively impact your real estate business, or more importantly your customers and clients. It’s the “carry a big stick” theory of politics, and it’s effective. That’s why we beg and plead with you to invest every year. Because it’s the only protection you’ve got against bad law and regulation. Sure, you can give individually to whomever you wish…but where’s the big stick? (And yes, that makes it all the more imperative that we consider and develop carefully our policy positions so that they’re about what’s good for Virginia, good for our communities, good for consumers…and not solely self serving).

2. RPAC of Virginia gives fairly evenly to Democrats and Republicans. National RPAC does, too. We’re not affiliated with a political party. We represent candidates who support private property rights and fair land use policies and housing opportunity and free enterprise. In the recent General Assembly election cycle here in Virginia, we supported more Republicans than Democrats…which makes sense, considering the Republicans were the party controlling both houses of the General Assembly at the time. With the Dems now in control in the Senate, I suspect it’ll be different next time around.

3. RPAC is governed by about 20 trustees who are REALTORS just like (most of) you. They run real estate businesses AND they’re active in state and local politics. So when funding decisions are made, do remember that they’re made by folks who do what you do for a living and understand the issues confronting your profession.

4. This is a biggy: RPAC funds can only be used for CANDIDATES. We’re prohibited by law from using it to lobby; we’re prohibited from using it in issues campaigns (say, to support or oppose a grantors tax increase). Lobbying and issues campaigns are funded with your dues dollars, not with RPAC funds. You invest in RPAC so that your association has funds to help elect candidates who support what’s best for your business and for homeownership in Virginia. That’s pretty much all that your RPAC money is used for. The vast majority of RPAC overhead costs — staff, recognition, brochures, etc — are paid for from your VAR dues dollars, not from the PAC.

5. Before the RPAC Trustees decide to support/endorse a candidate (which usually means we give them money or in-kind campaign support, but not always), we interview the candidates to determine which is best for your interests. We don’t pay attention to a candidate’s stand on social issues; instead, we ONLY look at his or her position on real estate issues. We almost always interview in races for an open seat. In races where an incumbent who has supported your issues is running, we’re less likely to interview; after all, such a candidate has a track record, and we can tell if he’s been for us or against us. On the other hand when an incumbent hasn’t supported us, we either stay out of the race, or we look for someone to challenge him/her in the election. Likewise, most local associations interview candidates before they make endorsements in local races.

6. Which reminds me: Of every dollar you invest in RPAC, 30 cents goes to NAR for use in federal (Congress and US Senate) races. The remaining 70 cents is used in Virginia for statewide and General Assembly races AND in local races (and the local portion is controlled by your local association, but their rules and process for candidate contributions are nearly identical to VAR’s)

7. There are serious limits to what National RPAC can give to Federal candidates (Congress and US Senate). I’ll spare you the gory details, but it totals $15,000 per candidate per election cycle. National RPAC does NOT get involved in the presidential race. In Virginia, however, there are no limits. Still, I think you’ll find the size of our contributions to be in line with those of other groups. There’s a limit, of course, to what the market will bear, and any contribution that seems larger than the market will put us in every newspaper in the state, and…let’s just say the coverage wont be flattering. You can find a record of all political contributions in Virginia at http://vpap.org.

8. Despite the conclusion one might draw from the National Home Builders Association’s recent decision to cease all funding of Congressional candidates until Congress does what the builders want, it’s not about buying votes. Sometimes I wish it was that easy, but I’m glad it’s not. What it’s about is electing thoughtful officials who’ll at least listen when we come to them with good, sound policy proposals. It’s an open door. But if we’re not fighting to elect that kind of candidate, there are plenty of other groups out there with different ideas from you who’ll fill the void with their brand of candidate, and you’ll be out in the cold. If we’re not engaged in political advocacy, we can’t effectively represent you. That’s what RPAC is for.

That’s enough for now. Three last things:

> You’ll find a really cool member-produced video about RPAC on VAR’s website. It’s short, it’s current, and it’s worth your time.

> Here’s a list of 2007 VAR legislative successes, powered by VAR’s first rate lobbying team and your support, but undergirded by the “big stick” that is RPAC. Do note how many of the issues we’re invlved in aren’t only about us, about REALTORS®; rather, they’re about better communities and moving Virginia forward.

> Lastly…I do apologize for being so pedantic. I understand that politics can be an unpleasant and divisive business. But to those REALTORS® who would recoil from it and refer to RPAC as something nasty and say that politics is distasteful and REALTORS should have no part of it, I say this: When they declare that ditch on your investment property a wetland, and they put a tax on your commissions, and they decide to fund the bulk of transportation infrastructure on the backs of homebuyers and sellers, and implement all manner of regulation that negatively impacts your bottom line, you’re going to want to say “Where was RPAC?” And I’ll have to bite my tongue to keep from replying, “Where were YOU?”