Category Archives: Government workers and pensions

Uh, Oh, Another Bad Year for VRS Investments

by James A. Bacon

The Virginia Retirement System earned 1.4% on its $82 billion investment portfolio in fiscal year 2020, far below the long-term average of 6.75% the VRS Board of Trustees assumes that it will earn over the next 30 years, reports the Richmond Times-Dispatch

VRS investments have returned 5.2% over the past three years, and 4.8% over the past five years, but the 10-year record looks better at 8.1%.

One year’s poor results are not a cause for concern. Markets go up and down, and so do investment returns. The long-term picture is worrisome, however. The ten-year VRS record reflects investment results during one of the great bull markets in both stocks and bonds in U.S. history. Many analysts expect returns in future years to be lower as the Federal Reserve Bank pursues a near-zero interest rate policy to goose the U.S. economy through the COVID-19 crisis and aftermath. There is no chance that investment performance over the next 10 years will replicate that of the past 10 years. To the contrary, if inflation picks up, as the Fed is aiming for, that could depress stock market multiples and stock prices. Continue reading

The Democratic Party-Public Union Symbiosis

by James A. Bacon

It’s Labor Day today, so I suppose it’s appropriate that Richmond Mayor Levar Stoney has disseminated a fund-raising email calling for recipients to join him in “fighting for working people.” By that, he means giving a “voice” and a “seat at the able” to Virginia teachers, firefighters, and other public-sector workers.

“Virginia public-sector workers will soon have the freedom to form a union and bargain collectively for things such as fair pay, adequate staffing, and safe working conditions,” says Stoney. “Please join me in standing in solidarity with our workers here in the City of Richmond.” While you’re expressing your solidarity, donate here.

Put another way, a vote for Stoney is a vote for the Big Labor/Democratic Party political symbiosis that is strangling the fiscal life out of blue states across the country. Let us refresh ourselves on a few basic facts. Continue reading

So It’s Not “About the Children” After All

by James C. Sherlock

The Chesterfield Education Association (CEA), a local unit affiliated with the National Education Association, is pushing back hard against a plan to have school employees report to their schools in order to use school facilities and support systems to professionalize remote instruction to their students. (According to the CEA president, the organization currently represents between 28% and 30% of the school system’s teachers, counselors and principals.)

The school district wants to ensure that the failed experiment with remote instruction in the spring is not replicated this fall. In-school platforms for remote instruction guarantee supervision and technical support.

From the Chesterfield Observer August 6, 2020:

“(Chesterfield School Superintendent) Daugherty assured the Board of Supervisors last month that all Chesterfield teachers would be required to work from their school buildings when they return from summer break – unlike last spring, when many teachers struggled to facilitate delivery of a hastily crafted virtual curriculum while working remotely following Gov. Ralph Northam’s executive order closing all Virginia schools.

Since then, however, the School Board has received pushback from employees who don’t think they should have to work in school buildings if students aren’t present.

Last Friday, the Chesterfield Education Association recommended that all CCPS employees with documented health risks, those who have to provide supervision of their own children, and those who simply prefer to work remotely be given the option to do so.

Continue reading

Welcome to Illinois

by James C. Sherlock

The illegal but successful threats not to return to work by teachers associations in Fairfax County Virginia have forced Virginians to confront the issue of public employees’ willful refusals to perform the duties of their employment.

From the Washington Post, “Teachers in Fairfax revolt against fall plans, refusing to teach in-person,” June 26, 2020:

A day after one of the nation’s largest school systems announced its proposal for fall learning, teachers within Fairfax County Public Schools rose in revolt and refused to teach in-person, as the (previously announced by the school board) plan demands, until officials revise their strategy.

Though you would not know it from their actions, Fairfax County school teachers currently are not permitted to bargain collectively. Even when the laws change next year to permit bargaining at local option, such tactics will be illegal.

Code of Virginia, § 40.1-55, both now and in 2021, is titled “Employee striking terminates, and becomes temporarily ineligible for, public employment’.”   Continue reading

Stop the Problem Before It Starts

by Chris Braunlich

With the General Assembly taking up policing reform in this summer’s special session, there should be at least one bill stopping a problem before it begins.

Most big problems are created by a small number of people. The same is true of police officer transgressions. Most police officers are good police officers, but Derek Chauvin was a bad cop with 18 prior complaints in 19 years at the time he killed George Floyd. His partner, Tou Thao, has six complaints, including an open one at the point he was fired. The head of their police union, Lt. Bob Kroll, is the subject of at least 29 complaints.

Their continued presence was an insult to the more than 680,000 good law enforcement officers who are guardians of our safety, who took the job to serve the public and who put their lives on the line.

Yet, instead of eliminating a narrow source of major abuse, they were allowed to continue their abuse of Minneapolis citizenry. Why?

Increasingly, we can point to provisions commonly found in Collective Bargaining Agreements (CBAs) negotiated between governments and the police union as part of the contract process. The issue has never arisen in Virginia before, because collective bargaining was prohibited. But Governor Ralph Northam has signed into law legislation that could mean local governments and their police unions next year will negotiate the conditions of the disciplinary process against misbehavior by individual police officers. Continue reading

Our Gutsy Governor

By Peter Galuszka

On June 24, 2015, Nikki Haley, a Republican who was South Carolina’s first non-white governor, called for the removal of a Confederate flag that had been flying over the state’s capitol grounds for years.

“This flag, while an integral part of our past, does not represent the future of our great state,” she said. Her action came a few days after an avowed white supremacist walked into an African-American church and opened fire, killing church members attending a service.

I was watching the news on TV when she made her gutsy move. I was deeply impressed.

And now, Ralph Northam, a Democrat who is governor of Virginia, has taken a similarly gutsy move. He has ordered that the state-owned statue of Confederate General Robert E. Lee be removed from its stand on Monument Avenue in Richmond. It has been there for about 130 years, erected by white supremacists with deep sentiment for their romantic myths of Southern history.

“I believe in a Virginia that learns lessons from our past and we all know that our country needs that example right now,” Northam said. Continue reading

Why Northam Is Such An Important Governor

By Peter Galuszka

This is a bit like throwing chum at a school of sharks, but here is my latest in Style Weekly.

I wrote an assessment of Gov. Ralph Northam that is overall, quite positive. My take goes against much of the sentiment of other contributors on this blog.

They are entitled to their views but, to be honest, I find some of the essays shrill and not really fact based. If Northam wants to delay elective surgeries at hospitals for a week or so, some want to empanel a grand jury.

An acute care health facility in Henrico County becomes one of the most notorious hot spots for coronavirus deaths and it is immediately Northam’s fault even though the care center has had serious problems that long predated the governor’s term in office.

He’s a trained physician who served as an Army doctor in combat during the Iraq War yet he is vilified as being incompetent and incapable of understanding the COVID-19 pandemic.

It’s like the constant repetition of the “Sins of Hillary” on Breitbart and Fox News about emails and Benghazi.

Like him or not, Northam is bound to be one of the most consequential governors in Virginia history given the gigantic problem of the pandemic. He’s not a showboat salesman like Terry McAuliffe nor a smarmy, small-time crook like Robert F. McDonnell.

Anyway, here’s the piece.

New Northam Financial Directive Late, Clueless

By Steve Haner

When I’m wrong, I should rush to admit it. The concerns expressed by others on this blog that the Northam Administration was failing to recognize the financial aspects to the COVID-19 pandemic were valid. The person exhibiting wishful thinking was me, with my assumption they were already acting.

That’s because they just acted, with an executive order to state agencies to freeze hiring, tighten spending and otherwise batten down the fiscal hatches for a storm. “We can expect to enter a recession soon,” Chief of Staff Clark Mercer writes in a four-page memo quoted by the Richmond Times-Dispatch.   

Wrong. The economy has been in recession for a month. A month. The concern now is a depression.

Mercer said the state expects “significantly less revenue” than the most pessimistic forecast Northam’s economic and revenue advisory councils considered last fall and reduced cash balances at the end of this fiscal year that will carry into the next two-year budget and require cuts in spending.

“Our intention is not to cut the budget in the short term, but decisions will depend on how much revenue comes in,” he said.

Wrong again. The state will be slashing the budget as never before, and the Governor should have started the process weeks ago. One can only hope, and it may be a forlorn one, that agency financial managers saw the clouds and acted on their own. If the Governor’s people are only now getting serious about the amendments to the budget due in seven days, shame.  Continue reading

A Look at Richmond and COVID-19

By Peter Galuszka

Here is a roundup story I wrote for Style Weekly that was published today that explains the effects of COVID-19 on the Richmond area. Hopefully, BR readers will find it of interest.

It was a tough piece to report. The impacts of the deadly virus are very complicated and multi-faceted. An especially hard part was trying to keep with the fast-changing news, notably the number of new cases and deaths. We were updating right up until the story closed Monday afternoon. It was hard to talk to people with social-distancing and closings.

The experience shows the delicate balancing act between taking tough measures to stem the contagion and keeping the economy going. My view is that tough measures are needed because without them, it will all be much worse, particularly more illness and death as the experience in Italy has shown.

Incredibly, our utterly incompetent president, Donald Trump, now wants to focus on the economy more than taking necessary containment steps. It’s far too soon for that. Regrettably, a number of Bacon’s Rebellion commenters are sounding the same irresponsible tune in keeping with their big business and anti-regulation laud of free market capitalism. Continue reading

Bacon Bits: Quick Clips

5G rollout reaches Virginia. Outside of Crystal City and the Reagan National Airport, Hampton Roads is the first region in Virginia to enjoy 5G cellular access. Verizon has announced that its 5G Ultra Wideband mobility service is available in the Virginia Beach Oceanfront, downtown Norfolk, Newport News, Old Dominion University, Hampton, Chesapeake, and other high-traffic locations, reports Virginia Business. Said Governor Ralph Northam in a statement: “This technology will propel the industries that drive coastal Virginia — the military, advanced manufacturing, logistics, higher education, health care, tourism and more. We can’t wait to see new opportunities unfold for workers and innovators.” The service is available in 31 other cities.

Virginia unemployment still 2.6%. Virginia’s unemployment rate remained at 2.6% in November, even as the labor force expanded by 13,326, or 0.3%. Employment set a record of 4.4 million people, reports Virginia Business. While Virginia job creation has lagged the national pace, there is a bit of good news within the numbers: Job creation is market driven, not government-driven. Year over year, the private sector added 47,400 jobs while the public sector shed 7,300 jobs.

…But never fear, government is still creating some jobs. For example, the Virginia Department of Game and Inland Fisheries has hired a diversity and inclusion officer. The 450-person department, according to the Richmond Times-Dispatch has “struggled” with diversity: only 9% of employees earlier this year were “people of color,” compared with the average at Virginia agencies of 36%. Meanwhile, Virginia’s Office of the State Inspector General is conducting an audit of diversity and inclusion practices within state natural Resources agencies, including the Department of Conservation and Recreation and the Virginia Marine Resources Commission. Continue reading

Northam Asserts “Systemic Inequity” Exists in State Government, but Doesn’t Say Where

Janice Underwood (foreground). Photo credit; Washington Post

by James A. Bacon

Governor Ralph Northam has appointed Virginia’s first director of diversity, equity and inclusion.

In the new “senior-level position,” Janice Underwood, former director of diversity initiatives at Old Dominion University, will develop a “sustainable framework to promote inclusive practices across Virginia state government,” stated a press release from the governor’s office. As part of that job, she will implement a “measurable, strategic plan” to address systemic inequities in state government practices, and turn feedback from state employees, external stakeholders and community leaders into “concrete equity policy.”

Well, this  is quite the indictment of Virginia state government, including the tenure of Northam’s four gubernatorial predecessors, three of whom were fellow Democrats: Terry McAuliffe, who is rumored to be pondering running again for the governorship, as well as Virginia’s two U.S. Senators Mark Warner and Tim Kaine. Who knew that Democrats allowed inequities to persist so long?

Remarkably, Northam, who has vowed since his blackface controversy to dedicate himself to racial equity, provided no details regarding what “systemic inequities” exist in state government. The inequities must be pretty grievous if they are to be described as “systemic.” But he leaves citizens hanging as to what they might be. Remarkably, the Washington Post and Richmond Times-Dispatch, which normally are hyper-alert to evidence of racial injustice, neglected to inquire what Northam might have been referring to. (The Daily Press covered the story, too, but I could not get past the firewall.) What, oh, what could the governor mean? Continue reading

Bacon Bits: Black Diamonds, Tarnished Silver, Wilting Green

Free falling. As coal production declines, the economy of far Southwest Virginia is in free fall, with potentially dire fiscal consequences for local governments. “A sharp decline in coal production jeopardizes the fiscal health of local governments, degrading their capabilities to provide adequate public services and issue and serve debt,” finds a report by Columbia University’s Center on Global Energy Policy and the Brookings Institution. Between 2007 and 2017, Virginia coal production fell by 50% from 24.9 million short tons to 12.8 million. The study identifies Dickenson and Buchanan counties as the fifth and sixth most mining-dependent localities in the nation, with 17% and 16% respectively of the labor force engaged in the industry in 2015. The Virginia Mercury has the story here.

Tarnished silver. Phase One of the Washington Metro’s Silver Line to Tysons ran $220 million over budget and was completed six months later. Now Phase Two of the $5.8 billion project funded largely by commuters on the Dulles Toll Road, reports the Washington Post, is running late. The project, expected to be wrapped up next month, may not be completed until next spring or summer. The construction project has been plagued by cracks in concrete structures, defective rail ties, and faulty dimensions for a rail-yard platform. It is not clear yet if the problems will exceed the project’s $550 million contingency fund.

Why do today what you can put off until tomorrow? Bacon’s Rebellion has made much of Virginia’s $5.8 billion in unfunded pension liabilities. Now a new study, “The Sustainability of State and Local Government Pensions: A Public Finance Approach,” says there’s no reason for Virginia or any other state to panic. After “reverse engineering” future benefit cash flows of the pension plans, the authors find that pension benefit payments in the U.S., as a share of the economy, are currently at their peak level and will remain there for the next two decades. Thereafter, the reforms instituted by many plans will gradually cause benefit cash flows to decline significantly.”  Continue reading

VRS Hybrid Plan Drawing Even Fewer Contributions

Virginia Retirement System overall investment returns, all funds. Source: JLARC

The percentage of state employees making voluntary contributions to their own retirement pot, contributions which are matched with free money, has continued its rapid decline over the past year.  As of March 2019, fewer than half of state employees who should be investing in their own retirement are doing so, according to a Virginia Retirement System update Monday.

A year earlier, according to the comparable report given the Joint Legislative Audit and Review Commission and reported on Bacon’s Rebellion, 58 percent were contributing something and drawing in matching funds.  A year before that it was 79 percent.  Just how much money the 52 percent adding nothing this past year failed to invest, and how many matching dollars were therefore not captured, is not in the report.  Continue reading

Dumping, Again, on the Lowest-Paid Folks

A recent article in the Washington Post highlights an issue I alluded to in my recent post on government outsourcing  functions.  To summarize:  The Alexandria school superintendent’s budget proposal called for eliminating 30 custodian positions and outsourcing the jobs to a private company.  (The system already contracts with private companies for custodial services in many schools.  This proposal would have completed the outsourcing.)  The reason for the proposal was budget savings.  After a lot of blowback, the superintendent relented some, proposing that custodians who had worked for the school system for at least five years could keep their positions during the next school year.  That left 10 custodians facing the loss of their jobs.

This sort of outsourcing is common at all levels of government.  In Richmond, the custodians for state buildings are not state employees, but work for a company that has contracted with the state to clean the offices.  The same is true for security guards at the entrances to state buildings, with the exception of the Capitol Police. Continue reading

Bacon Bits: A Little Bit of This, a Little Bit of That

Safe hospitals. I’ve long maintained that the best thing you can do for your health is stay out of hospitals — 160,000 deaths occur annually across the country from avoidable medical errors monitored by the Leapfrog Hospital Safety Grade. Fortunately, Virginia hospitals are safer than most. The Old Dominion has the second highest percentage — 53% — of hospitals in the country of hospitals meriting Leapfrog’s A rating. In Maryland only 25% of hospital scored an A, and in Washington, D.C., there are no A-rated hospitals, reports the Richmond Times-Dispatch.

Expanding hospital. Speaking of  hospitals, Carilion Roanoke Memorial Hospital has just announced a $300 million expansion that includes a new tower to care for emergency and heart patients, a new behavioral health hospital across the street, a parking garage and a pedestrian skyway to connect it all. The expansion is part of Carilion’s plan to invest $1 billion over the next seven years, according to the Roanoke Times. Roanoke Memorial scored a B in Leapfrog’s ranking, incidentally. Roanokers might legitimately inquire if some of that $300 million could be better spent on preventing avoidable medical errors.

Bye, bye, Jeff, baby. The Commonwealth Transportation Board unanimously voted yesterday to allow Arlington County to change the name of Route 1 from Jefferson Davis Highway to Richmond Highway, reports the Washington Post. The United Daughters of the Confederacy had spearheaded the naming of the highway after the president of the Confederate States of America, as a “direct and antagonistic response” to the establishment of Lincoln Highway across the northern states, said Arlington Board Chair Christian Dorsey. Continue reading