Results of the first 40 months paying unemployment benefits to military spouses leaving Virginia jobs due to family transfer. Source: VEC
Virginia’s unemployment insurance (UI) trust fund continues to show improved balances despite dropping tax rates, reflecting a strengthening economy. The most recent semi-annual report, released at a legislative meeting yesterday, projects half as many initial claims during 2018 as there were five years ago: 134,000 this year versus the earlier 276,000.
It the trend holds that would be a 45-year low, the Daily Press reported, quoting Virginia Employment Commissioner Ellen Marie Hess.
The trust fund balance probably peaked at $1.35 billion June 30, with slight declines expected in coming months. With the lower unemployment and higher workforce participation rates, the system is working as designed. More than 68 percent of the almost 215,000 Virginia employers paying into the fund pay at the lowest possible tax rate, which works out to $88 per employee.
The tax rates go up with a history of layoffs or other successful claims and are higher on new employers or employers based outside of Virginia. In general Virginia has some of the lowest taxes in the region, in part because it also has less generous payments.
The various charts track many other signs of economic improvement: More employers registered with the system, fewer of them paying elevated taxes due to past layoffs, lower general unemployment rates, and a labor force participation rate (66.2 percent) higher than the national average.
The report also tracks the impact of a controversial recent change in the system, allowing unemployment benefit payments to the spouses of military personnel who get reassigned outside Virginia. Prior to 2015 that was considered a voluntary termination, not a layoff, and thus not eligible for benefits.
Over the first 40 months 766 people have claimed benefits costing about $2.3 million.
Business groups, including the Virginia Chamber of Commerce, opposed giving this benefit to so-called “trailing spouses” because of fear it would be a major drain on the fund. The employer ultimately responsible for the move, the Department of Defense, pays zero into the state UI fund, but taxes are collected from whatever employer had the departing spouse on the payroll.
So far, the number of claimants has been so small there has been no measurable effect on the fund balance or tax rates. The military spouse benefit was passed with a sunset clause and has two more years to run before the General Assembly must end or extend it. It was advocated as another way to demonstrate Virginia’s commitment to the military, for economic as much as patriotic reasons.
Having the benefit may give Virginia some positive points should there ever be another round of base closures, but if there is and Virginia is on the losing end, the number of claims under this provision would spike.
Somebody Must Think We’re Stupid
This is usually the figure at the heart of the occasional stories about the amount spent by an individual company, or the gross amount spent on lobbying by all who file these forms. But in practice almost nobody reports in full what they are paid, and they of course do things other than lobbying with their time. So they pro-rate their fee and salary and report only a portion of it.
Who draws the line? Who picks the formula for pro-rating the time? The lobbyist or the principal do so for themselves and are never asked to report their rationale. That’s why comparisons are impossible – some report 5 percent and some 100. Partly there is the natural reluctance everybody has to reveal their income, but there is also a reluctance to stand out as a big spender on charts like those produced by VPAP or in a news story.
A Peek Inside the Process
Years ago, one of the best lobbyists I ever worked with, a fine lawyer, instructed me that only the time I spent talking or writing to a legislative or executive branch official about a specific bill or vote was lobbying. The time I spent researching the issue, drafting legislation or talking points, driving to the meeting, sitting in the anteroom – none of those hours, the bulk of the time, constituted lobbying. The ten or fifteen minutes in the room, that was the only actual lobbying.
This all flows back to the very narrow definition of lobbying in Virginia law, which does not get into indirect lobbying or grassroots lobbying or lobbying preparation, all things that come up when companies are deciding what is and isn’t lobbying for federal tax compliance purposes. This situation is too ridiculous to be accident or oversight, and extremely convenient for both the lobbyists and the lobbied.
Compensation is not that relevant. What matters far more, the real glaring gap in the reports, are the details about what specific subject matters, bills, budget amendments, gubernatorial appointments or procurement decisions are being influenced. The shameful gaps in the reports include loopholes that allow expensive dinners, gifts or entertainment to be given with no recipients named, or money to shuffle between various entities under the guise of some unregistered coalition.
Also, the full extent of grassroots or indirect efforts needs to be revealed. More and more issues now spark television, direct mail, phone bank and other campaign style communications efforts, and every dime spent on those should be just as transparent as if they were being spent on a candidate.
One area where compensation should be reported in full is when the client is the government. Beyond that, we need to focus on those other more important failings in the current non-disclosure disclosure regime, although this contribution by VPAP is useful in demonstrating that somebody out there thinks we’re stupid.
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Posted in Commentary, General Assembly, Open Government, Transparency
Tagged Stephen D. Haner