Category Archives: News

Media reaction to Goodlatte’s 2018 Chesapeake Bay Amendment

Background: Republican Rep Bob Goodlatte (Va – 6th) has proposed an amendment to an appropriations package which would forbid the EPA from using federal funds to take action against bay states that fail to meet pollution-reduction targets set by the EPA and agreed-to by the states.  The amendment is to the 2019 Interior, Environment, Financial Services and General Appropriations Act.  The amended bill passed the U.S. House of Representatives 213 to 202.  The same bill (without the Goodlatte Amendment) was passed by the US Senate 92 to 6.

Goodlatte’s rationale. Rep Goodlatte previously explained his rationale for restricting the EPA’s authority over the Chesapeake Bay cleanup on his website.  You can view that explanation here and here. (Hat Tip: Jim Bacon). However, it should be noted that the first link was from 2014 and the second from 2016. One would think that Goodlatte’s most recent attempts to curtail the EPA’s enforcement of the TDML Blueprint would require an updated explanation of intent … especially in light of the continued success of the Bay cleanup effort since EPA enforcement began.

Media reaction to the 2018 amendment. In order to get the essence of the media reaction to Bob Goodlatte’s proposed amendment I performed an internet search with the argument “Goodlatte & Chesapeake Bay Cleanup.”  There were 42,800 results. Here are the top 10 written in 2018 pertaining to Goodlatte’s latest attempt to restrict the EPA from enforcing the TDML Blueprint:

  1. Measure to weaken EPA enforcement of bay cleanup is up for House vote – again (Daily Press)
  2.  US House again votes to restrict federal enforcement of Chesapeake Bay Cleanup (Baltimore Sun)
  3. Editorial: Goodlatte once again targets the bay cleanup (Fredricksburg.Com)
  4. Senators vow to fight stripping funds to enforce Chesapeake Bay cleanup (LA Times)
  5. Environmentalists claim measure will set back Chesapeake Bay (13 News Now)
  6. Virginia GOP Congressman Again Tries to Gut Accountability For Chesapeake Bay Cleanup (PA Environment Digest Blog)
  7. Goodbye and Good Riddance to Goodlatte (Bacon’s Rebellion) (LOL)
  8. Harris backs Bay cleanup (The Star Democrat)
  9. Bay Journal: Hogan urges US Senate to reject curb on EPA role in Bay cleanup (Maryland.gov)
  10. House Republicans Advance Bill that Would Derail Chesapeake Cleanup (NPR)

Methodology reminder. Bob Goodlatte has made many failed attempts over the years to prevent the EPA from regulating the Chesapeake Bay’s TDML Blueprint. Interspersed with articles relating to his most recent attempt were articles referencing his prior attempts. Those prior articles were omitted from this list.

Conclusion. Goodlatte seems to have very little support for his latest attempt to restrict the EPA’s authority over the Chesapeake Bay. Beyond the dearth of media articles in support of Goodlatte, seven of Virginia’s eleven U.S. House of Representative members voted against Goodlatte’s amendment. Both Virginia U.S. Senators committed to blocking the amendment in the Senate. Even Maryland’s Republican governor came out publicly against the Goodlatte amendment. I also quickly scanned the next 10 articles (numbers 11 – 20) on the sorted list of responses to my internet search. All were opposed to Goodlatte’s latest attempt to restrict EPA enforcement of the TDML Blueprint.

— Don Rippert

Dominion Files 10-Year Grid Modernization Plan

Dominion Energy today filed a plan with the State Corporation Commission outlining how it intends to comply with the Grid Modernization and Security Act of 2018. The filing asks the SCC to approve the programs and investments included in the first three years of a 10-year grid modernization initiative. The filing can be viewed here.

Features of the plan highlighted in a Dominion press release include:

  • $200 million in bill credits to customers, and $125 million in annual rate cuts due to tax relief;
  • Modernizing the energy grid to improve reliability, resiliency and the ability to integrate more renewable energy and emerging technology;
  • Significantly expanding the company’s renewable energy fleet in Virginia;
  • Future testing of wind turbines off the coast of Virginia Beach.

Dominion emphasizes that the improvements will not require any rate increases. Rather, the upgrades will be paid for through earnings over and above its normally allowed Return on Equity, which will be retained for the purposes of reinvestment in grid modernization. This particular provision, the most controversial aspect of the 2018 legislation, was criticized as a form of “double dipping” that allowed Dominion to earn money on its original investment and then to earn more money on the profits that otherwise would have been returned to rate payers. The legislation was said to have fixed the double-dipping issue, but it is not clear how that will work out in practice.

In the meantime, Virginians can look forward to aggressive investment in solar power, wind power, and energy efficiency. Dominion is committing to having 3,000 megawatts of wind and solar in operation by 2022, adding to what the company touts as the sixth largest solar fleet in the nation. (It’s not clear from the press release if that includes solar resources outside of Virginia.)

The plan asks the SCC to include the Coastal Virginia Offshore Wind (CVOC) project: two experimental turbines generating 12 megawatts of power in a federal lease area about 27 miles off the Virginia Beach coast. Experience and data gained from operating those turbines could pave the way for widespread deployment of wind turbines in the future.

Dominion also is asking to install 2.1 million smart meters at a cost of $450 million. These meters, in conjunction with a new customer information system, will enable customers to better manage their energy bills. Additionally, the utility is proposing to spend $870 million in energy efficiency programs over the next decade. The programs are “designed to help customers save energy and manage the demand on Virginia’s electric system.” At least 5% of these programs must benefit low-income, elderly or disabled individuals, “most likely through weatherization upgrades.”

Proposed new construction and material standards will improve grid resiliency by hardening infrastructure and protecting against cyber-attacks. The burial of outage-prone distribution lines and the deployment of intelligence devices and control systems will are meant to speed the re-establishment of electric service.

There is no mention in the Dominion press release of a much talked-about pumped-storage facility in Southwest Virginia, which previous legislation had declared to be in the public interest. The pumped-storage facility would use electricity in off-peak hours to pump water from a lower-elevation containment lake to an upper-elevation lake, and then generate electric power during peak hours.

The State Corporation Commission has been skeptical of some of these investments in the past, but the Grid Modernization Act declares them to be in the public interest. It’s not clear exactly how that assertion of General Assembly priorities will play out in the SCC decision-making process. The next few months should tell the tale.

Ratepayers Cover $760,000 Line for One Customer?

Highest cost projects from DEV underground line program phase three,with lifetime revenue requirement from ratepayers. Source: SCC pre-filed testimony.

The State Corporation Commission staff audit of Dominion Energy’s ongoing effort to place residential and small business electric service tap lines underground has turned up some expensive examples.  A handful of lines will cost ratepayers hundreds of thousands of dollars over time to serve a single residence.

The average cost for the first 18,000 customers getting new lines is about $50,000 each based on my own calculation.

Those are the all-in costs for planning and constructing the lines, then adding the interest cost or profit margin depending on how the utility financed it. The projection uses the current 9.2 percent return on equity. The money is collected over the estimated useful life of the new lines, about 40 years.  For phases one, two and three the total cost with financing is about $921 million, according to the SCC staff analysis.

The SCC staff compared the full capitalized cost of installing the highest-cost lines to home values.  “This means it is possible in some instances that the company could have purchased the customer’s homes at a lower cost than undergrounding their tap lines,” testified David J. Dalton of the SCC staff.

This program to expand underground lines is something else paid for with a specific monthly charge on everyone’s bill, a rate adjustment clause known as Rider U.  It is also something else that the General Assembly has deemed to be in the public interest and virtually off-limits to SCC challenge.

Photo: Dominion

The annual review of the program to adjust the billing charge is underway now and was the subject of a hearing at the SCC Tuesday. With big questions settled by the legislature, the discussion is focused on minor issues such as accounting changes or how the costs are allocated between various classes of customer.

The largest industrial customers are exempt but everybody else under the SCC’s jurisdiction pays, including the 600,000 customers who already have underground service (and paid for it themselves) and the unknown number who will never get underground service.  For that mythical average residential customer using 1,000 kwh per month, the current charge is 55 cents per month and Dominion is asking to raise it to $1.98 as of next February.

The legislature has authorized this to go until at least 2028, and Dominion expects to place 4,000 miles of lines underground in 12 phases at a direct cost of $2 billion and a fully-capitalized cost of almost $6 billion.  At that point the residential charge will be more like $5 per month.  The charge for commercial or small industrial customers was not reported.

Spending other people’s money is very popular.  The record on this case includes favorable comments from Senator Glen Sturtevant (R-Richmond), Delegate Vivian Watts (D-Fairfax) and several local officials where the program is active.  A spokesman for the American Red Cross attended Tuesday’s hearing in person to testify about that organization’s support, noting how wonderful it is not to have your power go out.  At the end he said his own house has already been upgraded under the program.

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Tax Act Impact on Virginia: 5,782 Jobs

The Tax Cuts and Jobs Act of 2018 will create 218,000 full-time equivalent jobs across the United States this year, asserts the center-right Tax Foundation, which specializes in analyzing the impact of tax policy on the U.S. economy.

Using its Taxes and Growth econometric model, the Tax Foundation provided a job-creation estimate for each of the 50 states and Washington, D.C. In Virginia, predicts the model, the economic stimulus of corporate and personal income tax reform will create 5,782 jobs.

That number compares to 20,100 total jobs created between Dec. 2017 and May 2018, according to U.S. Bureau of Labor Statistics data. Annualized, Virginia was on track for creating 48,200 jobs in 2018, suggesting that the tax cuts are accounting for about 12% of the state’s job growth.

The tax cuts’ impact on Virginia falls in the middling range compared to other states. The 5,872 jobs created in Virginia amounts to 678 jobs per 1 million population, according to Bacon’s Rebellion calculations. On a jobs-per-population basis, the impact ranges from 1,640 in Washington, D.C. to a mere 110 in Oklahoma, both of which appear to be anomalies. Excluding those two, the impact ranges from 564 jobs per million population in Mississippi to 824 in North Dakota.

 

Shrinking Community Colleges Looking to Pivot

Germanna Community College

Nothing like losing a quarter of your customers to get your attention.

That basically is what has happened to Virginia’s Community College System, with last term’s enrollment down 57,000 (actually only 22 percent) from its peak six years ago during the early days of the economic recovery. That drop exceeds the total enrollment at the 17 smaller campuses and has cost the institutions millions in revenue and forced personnel cuts.

Chancellor Glenn DuBois and two of the community college presidents shared that information and spent about an hour Tuesday with the State Council of Higher Education for Virginia laying out steps underway to attract more students, which will have to happen if Virginia is to meet the goals it has set for degrees and work certifications.

DuBois, who has served as chancellor since 2001, spoke again during the meeting at Richard Bland College of his vision of “a college graduate in every household” and of abolishing the phrase “first-generation student.”

One response has been only modest increases in VCCS tuition and fees for the coming year, at 2.5 percent below the official inflation rate and in stark contrast to the four year institutions. The annual cost for a full semester load is around $5,000, but DuBois noted that is still a great deal of money for many Virginians. Students in the community colleges are older, lower income, working part time. Fifteen of the 23 schools have food banks.

Like many of his predecessors, Governor Ralph Northam has made education and workforce development a high priority and Northam talked during his campaign about lowering or eliminating the cost of attending the public community colleges. About 20 states now have some version of a “promise program” where all or some high school graduates face no tuition bills at community colleges.

DuBois said that remains under discussion, which was confirmed a bit later in the meeting by the Governor’s Chief Workforce Advisor Megan Healy. But with a price tag in the hundreds of millions of dollars, “I don’t think that’s going to happen this year,” Healy said. In 2019 the General Assembly will be considering budget amendments, but the Governor doesn’t do his own full budget until 2020.

Absent a sudden commitment to free or almost free tuition, a VCCS task force responding to the situation focused heavily on marketing and process improvements. They are leaving the comfort zone, DuBois said, using words like “pivot” and “evolve.”

What if students didn’t have to apply to attend? The system is working on an open enrollment approach, but it isn’t there yet. It is making progress on reducing the paperwork and migrating the application process to smart phones. People should enroll in one day, “one and done,” said President Janet Gullickson of Germanna near Fredericksburg. “Believe it or not, that’s radical.”

The task force also said to make scheduling, degree planning, advising and even payment and financial aid compatible with the mobile environment. An early alert system can flag a struggling student, so a counselor reaches out to them rather than the other way around.

Do people understand how an associate degree or even a workforce certificate can boost their income? Better marketing may spread the word about the FastForward program which offers reimbursement grants on completion of a workforce credential. The grants “sold out” in their first two years and the General Assembly boosted the funding for this new budget, which may sell out again.

The target audience is no longer 18 to 24-year-olds. DuBois mentioned a Winchester man who lost his long-time job at a recycling center, came to the community college looking for his GED, but in 12 weeks earned a manufacturing technician certificate. He quickly landed a job with 40 percent more pay and, for the first time in his life, full benefits. He will be highlighted as the 10,000th FastForward graduate.

Another popular certificate program for forklift operations takes just four days. Before any of these programs is approved there is a demonstrated demand for the skills.

Gullickson mentioned a basic marketing problem she found at Germanna when she started – no one able to translate for Spanish students dealing with administrative matters. With the changing demographics in that region, the website needed a Spanish version, at an 8th grade reading level so the parents of potential students could understand it.

Work continues eliminating remaining barriers or duplicate requirements for students seeking to start at a community college and then transfer to a four-year institution. There are state grants for that process, too, which not long ago was getting the most attention as a new role for the community colleges. But based on comments Tuesday, the long-term response to the current challenge may be a system that looks more like its original 1960’s focus on workforce training.

Virginia Tuition Hikes Exceed Inflation Again

Cost of attending a four-year state college as a percent of household income. Click for interactive version. Sources: Penn and Vanderbilt

Tuition and mandatory fees at Virginia’s state colleges and universities are rising an average of 5.3 percent for the term starting next month, eighty percent faster than inflation.  The increase at the state’s community colleges for next term of 2.5 percent tracks well behind the current 12-month consumer price index (2.9 percent).

The report is contained in advance materials for the July 17 meeting of the State Council of Higher Education in Virginia. Director Peter Blake reports tuition and fees will increase by an average of $669 at four-year institutions and $113 at Virginia’s community colleges under charges set recently by the institutions’ governing boards. Increases range from $330 at Virginia State University to $1,100 at Christopher Newport University. “The systemwide increase is slightly higher than the increases in the previous two years,” he wrote.

2018 tuition and fee hikes. Source: SCHEV

Looking at tuition alone, the average increase is just under 6 percent, but smaller growth in mandatory fees softens that a bit.  Four years at the College of William and Mary will cost a new freshman paying the full freight almost $94,000 (before room and board), but at that school each incoming class’s in-state tuition rate is fixed for four years. A new in-state student at the University of Virginia will need at least $66,000 for four years but may face three more tuition hikes before graduation.

Christopher Newport University in Newport News had the largest overall increase on a percentage basis, 8.1 percent, and the new cost of four years there for new in-state students is $59,000 (again, with further increases likely.)

Out-of-state price compared to cost. Source: SCHEV

Out-of-state students pay substantially more in tuition than the cost of their education, according to another chart in the SCHEV data. It is more than double at some schools, and close to double at others. The pattern between Virginia and William and Mary reverses, with Virginia charging the higher premium for non-Virginia residents.

The state provides more than $2 billion annually from taxpayers as direct support for the schools or financial aid for individuals. The General Assembly increased General Fund support for the schools by more than $165 million in the new budget, but with most of the additional dollars in the second year of the budget starting July 2019. The increase for the coming school term for operations and aid was a modest $17 million. Much of the new money over the period is going to things unrelated to classroom instruction.

On Friday SCHEV sent out a news release focused on University of Pennsylvania data showing that Virginia’s higher education system faces lower risk than almost all other states. Whether that is because of Virginia’s strength or weaknesses in other states is unclear. It still warned Virginia’s population would not have the needed number of degree or certificate holders by 2025.

Virginia’s 4th graders were highly-ranked compared to other states on the National Association of Educational Performance but only 47 percent were proficient or better in mathematics, and 43 percent proficient or better in reading. By 8th grade those were down to 38 and 36 percent.  In four years those 8th graders are the college admission pool.

The Penn report ranked Virginia 41st on affordability. It included interactive charts comparing the affordability of state systems across the country by comparing costs to average household incomes. Cross-referencing the recent CNBC business network’s Best States for Business ranking, Virginia and Massachusetts had the highest costs on that basis among the top ten states, at 32 percent of household income. Five of the ten had costs at or below 25 percent of household income, with Florida the lowest at 20 percent.

Virginia’s community colleges, which are seeing significant enrollment declines, cost only 17 percent of average household income. That is right in line with most of the other top-ten states in CNBC’s list, with Colorado and Minnesota the most expensive for two-year degrees.

A debate continues to rage over whether rising school costs are driving away students, but the Virginia schools under the largest enrollment pressure, the community colleges and the two historically-black institutions, stand out in the SCHEV data lower overall costs, lower cost increases, and lower mark-ups for out of state students.

State Solicits Input from Solar, Wind Stakeholders

A nonprofit company specializing in addressing complex public policy issues has begun holding a series of meetings to solicit input from solar and wind energy stakeholders that will be used to formulate the Northam administration’s update to the Virginia Energy Plan.

Discussion topics will address community solar, corporate procurement of clean energy, state/local barriers to the deployment of renewable energy projects, and net metering (connecting rooftop solar panels to the electric grid).

The nonprofit, Washington, D.C.-based Meridian Institute is organizing the sessions under contract with Dominion Energy, as provided for under the Grid Transformation and Security Act enacted earlier this year. Meridian will publish a compilation of comments around the end of August. The feedback from this and other stakeholder groups addressing energy efficiency, electric vehicles and battery storage will provide input into the Northam administration’s development of the state’s energy plan. The previous plan, written by the McAuliffe administration, was published in 2014.

The inaugural session was not organized to collect input on the designated topics but to discuss the way Meridian had organized and framed the issues. Stakeholders will have a chance to make specific comments in hearings scheduled in July and August.

Given the preliminary nature of discussions, no strong points of contention emerged at the meeting, which was held at Virginia Commonwealth University in Richmond earlier today.

A few members of the roughly 60 people in attendance did wonder if Meridian might suffer from a conflict of interest due to its engagement by Dominion. Tim Mealey, a Meridian managing director, responded that his group is committed to openness, transparency, and reflecting the voices of all stakeholders. Meridian will not be issuing a report or making policy recommendations — its work product will be a summary of the participants’ views. Dominion will not review or approve the summary.

Several others questioned the way Meridian framed issues relating to the siting of solar and wind projects: What is Virginia doing right regarding the siting of renewable energy projects, and do stakeholders believe there are impediments to siting renewable energy projects in the Commonwealth?

Adam Gillenwater with the American Battlefield Trust said members of his group do not see the preservation of battlefields as an “impediment” to solar farms but rather as a competing good to be taken into consideration in siting decisions.

Others noted that the problems encountered by utility-scale solar and wind projects are different from the obstacles experienced by small power producers generating electricity at the rooftop level. Perhaps Meridian would consider conducting separate discussions for utility-scale and rooftop-scale issues, suggested Katharine Bond, Dominion senior policy adviser.

Mealey did not indicate what changes he might make to the discussion format. It is a “very unusual arrangement” to have an electric utility pay and contract for policy discussions mandated by a piece of legislation, he said. But he did not see that as a problem. His charge is to address the topics enumerated in the Grid Transformation and Security Act without being “unduly constrained” by the wording of the act.

SCC Examiner Rejects Dominion Tax Argument

A State Corporation Commission hearing examiner has rejected Dominion Energy Virginia’s arguments that it was correct to ignore a lower federal income tax rate in calculating transmission costs for 2018 and is recommending that the full commission give ratepayers the benefit of the lower tax rate immediately.

Chief Hearing Examiner Deborah V. Ellenberg’s ruling was issued July 9, following a June 29 hearing where Dominion employees said it had to use the 35 percent tax rate in calculating bills running into 2019, even though the federal corporate income tax rate had dropped to 21 percent effective January 1 of this year.  This was the subject of an earlier Bacon’s Rebellion post.

At issue is the rate adjustment clause (RAC) known at Rider T1, which passes along to customers the utility’s cost for transmission services.  It is one of several elements on monthly bills and the utility was seeking a substantial increase.  Dominion had put the higher monthly cost for a residential customer using 1,000 kilowatt hours at more than $4, with higher amounts hitting larger customers.

At the hearing Dominion argued that the T1 rate is driven by a formula approved by the Federal Energy Regulatory Commission (FERC) that includes as a factor the base federal rate, and it had to plug in the higher previous tax rate because it hadn’t consulted with stakeholders since the tax rate had changed.   Consumer advocates at the hearing said there was no prohibition on correcting the rates based on the new tax rate.   The hearing officer agreed.

“I find it disappointing that the Company has taken the position that the revenue requirement should include a 35% federal income tax rate that is no longer in effect rather than incorporate the significantly lower tax rate made effective even before the Company made its informational filing with the FERC in January 2018, and well before it filed this Application in May 2018,” she wrote. “It could, and should have, like other utilities, revised its annual filing to include the known and certain tax rate change. I recommend the Commission direct the Company to file a corrected annual filing with FERC effective January 1, 2018.”

The RAC tariff in question is due to be adjusted September 1 and stay in place 12 months.   Ellenberg suggested that the full commission adjust the new rate to reflect the lower taxes, saving consumers $71 million during the period.  She also suggested an additional reduction of $46 million to reflect the lower tax liability during the first eight months of 2018.  Dominion was arguing that consumers would have to wait until the true-up process in future cases to see rates adjusted to reflect the lower tax rates.

Ellenberg ruled against Dominion on a second point, involving a $13 million credit being paid to Dominion by the regional transmission organization PJM.  Dominion argued that payment was for generation services at its Yorktown plant, which is staying open longer than planned.  Ellenberg agreed with the SCC staff, the Attorney General and other consumer advocates that the payment was for transmission services and should reduce the revenue requirement for Rider T1.  The cost of operating Yorktown is fully recovered in base rates and the fuel charge.

If the full commission adopts her recommendations, Dominion’s request for $755 million for Rider T1 over the next 12 months will be reduced to $625 million, which is about the same as was approved a year ago.  That wipes out the 20 percent increase requested by the utility, with any increase in transmission costs being balanced by the lower taxes.

State Employees Not Funding Own Retirement

Source: VRS Report to JLARC

State and local employees, like many of their peers in the private sector, are declining in droves to contribute to their own retirement plans, despite the availability of matching funds, a.k.a. free money which compounds for decades.

The Virginia Retirement System has been putting new hires into a hybrid retirement plan that combines a defined benefit with a defined contribution plan which depends on employee contributions. More than 85,000 active workers are now part of the hybrid plan, but only 18 percent of those are socking away the maximum 4 percent of their pay, which is matched with another 2.5 percent by the state.

Of the rest, 42 percent are contributing nothing, and 36 percent are contributing  only one-half of one percent, or $50 per $10,000.  Most of those are apparently doing so because the state automatically escalated all contribution rates by one-half of one percent on January 1, 2017 and employees had to then intentionally opt out.

The information was part of the annual report on VRS to the Joint Legislative Audit and Review Commission Monday, covering all aspects of an operation vital to 700,000 participants or beneficiaries.  JLARC was presented with a brief oversight, a longer and more detailed overview, and the report of an outside actuary.

Since that first “automatic escalation” the participation has been dropping and it may continue to drop until a second auto-escalation is planned for 2020.  “Current low rates of voluntary contribution by hybrid plan members will result in lower retirement income,” the presentation slide states.   That’s a major understatement, but the hybrid plan and the low participation are saving the taxpayers a bundle in the short run and will save even more as the previous defined benefits plans fade away.

As of March 1, the overall year to date return was 9.9 percent, slightly behind the goal of 10.0.  No figure was given for the end of the fiscal year on June 30 and the last 90 days have been a trade fear-induced roller coaster.  The long-term return baked into VRS funding assumptions is 7 percent.  The five-year average has been 8.1 percent and the 25-year average 8.2, but as the saying goes, past results are not a guarantee.

The charts tracking the funding status of the various individual retirement plans were all inching up and the average overall is now about 77 percent.  Under current assumptions it will take 26 more years to get back to 100 percent funded, where the state was as recently as 2002.  The key phrase there is “current assumptions.”

“VRS is actuarially sound” concluded Lance Weiss of Gabriel, Roeder, Smith and Co. (GRS), the outside auditor.  He praised Virginia for setting that 7 percent target return a few years back, but then reported it is no longer a conservative assumption but merely a reasonable one.  Many of their clients are moving to 6.75 percent, he said.  A figure below 6.5 percent was hinted at.  With an aging workforce looking at starting benefits in the short term, there is even more reason for Virginia to rethink that 7 percent assumption on return.

The assumption on return is what drives the size of employer contributions.  In another report it was noted that if the two largest funds, those for teachers and for general state employees, moved to a 6.75 percent “discount rate” the state would need to increase its annual contribution by $182 million.  Changing that assumption also drives up the unfunded liability on both funds and pushes the 100 percent funded goal further out.

The reports today were merely accepted, with few hard (or easy) questions. It may take a longer period of market uneasiness to undermine the current return assumptions, but House Appropriations Chairman S. Chris Jones told reporters after the meeting he would consider it.

Senate Finance Co-Chair Thomas Norment did ask out loud if the hybrid plan was “worth keeping” but the question received no response.  The defined benefit plan is gone and unless participation patterns change future VRS retirees (86 percent of whom remain in Virginia) will not have the same comfortable income as current retirees.