Collective bargaining would give parents less control over Virginia schools

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Allowing collective bargaining will put yet another special interest ahead of the parents who simply want a say in what is best for their children.

Virginia parents soon could lose even more control over their children’s education.

Parents frustrated with school curriculum and other education issues throughout the state have earned national attention. But as that frustration boils over into school board recall petitions and the race for governor, one policy change that could limit parental and voter choice is being overlooked: public sector collective bargaining.

new law in Virginia gives local governments and school boards the power to permit government unions to have a monopoly on representing public employees. If school boards pass the law, they will be forced to negotiate with these union officials.

This will put an extra, unaccountable unelected layer of bureaucracy between parents, teachers and schools.

No limits to bargaining

The state law puts almost no limits on what these government unions can bargain over. Aside from a few issues protected by state law, almost any issue is on the table. Meaning that there is nothing preventing government unions from bargaining over the curriculum taught in Virginia’s public schools, let alone increasing their power and influence over school policy.

Monopoly on teacher representation
School boards that pass collective bargaining would also give unions a monopoly on representing all teachers in a school, even those that disagree with the union.

Teachers are quitting because of disagreement over curriculum, and allowing the unions to have this monopoly would further marginalize teachers who feel they are being forced to teach offensive subjects.

Inserting partisan politics into local school boards

National teacher unions already promote a political agenda that many Virginia parents disagree with.

The Wall Street Journal writes “union leaders claim that parents who oppose [the union political agenda] are motivated by hate and are assaulting free speech.”

Members of Congress have also voiced concern over the union’s influence on federal agencies. In a May 2021 letter to Education Secretary Miguel Cardona, ranking member of the House Education and Labor Committee Rep. Virginia Foxx, R-North Carolina, and Rep. Burgess Owens, R-Utah, wrote “It is entirely inexcusable for teachers unions to sway official guidance on school reopenings that flies in the face of students’ educational and mental health needs.”

They continued that “If the [American Federation of Teachers] has this much influence with the CDC, it raises significant concerns about the influence the organization wielded over the Department of Education in the development of its guidance and handbook.”

That is at the larger national level, imagine what that influence would be at a school district level in Virginia.

The letter was spurred by a New York Post report about February 2021 emails the paper obtained showing AFT put a “full-court press” on the CDC regarding school reopening policy. At the same time the report and letter were released, AFT itself published a poll finding “overwhelming” support for full school reopening in the fall – with 73% of parents saying they would be comfortable with full in-person learning.

Regardless of whether they agree or disagree with teachers’ unions on any particular issue, Virginia parents need to know that by allowing collective bargaining in their schools they are emboldening a powerful lobby that is not accountable to them and by law will have strong influence over what their children learn in school.

As is already being shown throughout the state, school boards are disregarding concerned parents.

Allowing collective bargaining will put yet another special interest ahead of the parents who simply want a say in what is best for their children.

A version of this commentary originally appeared in the online blog VirginiaWorks on October 15, 2021. F. Vincent Vernuccio is a senior fellow at Virginia Works and a Visiting Fellow with the Thomas Jefferson Institute for Public Policy.

Posted in Education, Local Government, Politics | Leave a comment

Virginia’s Anemic Growth Has Policy Roots In Richmond and Washington

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“Virginia’s economic recovery continues to outpace the nation…Our unemployment rate remains well below the national average and has fallen consistently every month for the past fifteen months…I’m proud of our roaring economic growth…”

So claimed Governor Ralph Northam (D) in a September 17 news release.

It  came just after Virginia’s economy showed especially anemic results in August employment data, capping a period of poor performance effectively described in a recent Bacon’s Rebellion post by Richmond economist A. Fletcher Mangum.  Virginia’s job growth this spring and summer has trailed the vast majority of other states, with the August data placing us at a shameful 47th out of 50.  Simply achieving the national average growth rate that month would have meant 75,000 more jobs.

The anemic performance has causes, many a matter of government policy.  One factor tied to government policy is federal contract spending, and while that proved a stable anchor during the recent COVID storm, in the period before and since it has provided little growth.  Years of rhetoric about weaning the state off that dependence have produced little real change.

The path away from that dependence is private investment and growth.  Compared to just a few years ago, is Virginia a better or a worse place to locate a new business or increase investment in an existing one?  Has Virginia shown what is called in the business world “continuous improvement?” No.

Virtually all policy decisions in recent years have shown Virginia’s legislative and executive majority want to regulate and tax businesses more, empower organized labor and earn its gratitude, place an automatic escalator on the minimum wage, and unleash a flood of successful litigation on employers accused of any possible grievance an employee might raise.

Virginia’s Right to Work law is indeed an inch away from disappearing, and every business leader in the United States knows it. This election decides it. The major roadblock in the past two years has been a single senior Democratic senator and committee chair, Richard Saslaw of Fairfax, who is now widely believed to be retiring after this term.  His power has already dissipated with that report.

In preparation, the legislature has authorized the establishment of public employee union contracts at the local level, which must inevitably spread to state workers.  It has imposed Davis-Bacon prevailing wage controls to drive up labor costs on public contracts and made the project labor agreement model the preferred approach, in both state and local projects.  Right to Work is one standing wall of a collapsed house, masking a now very pro-union climate, a thin screen which business leaders around the nation see past.

The Tax Foundation has a tax climate ranking which is well-regarded by the business community, even if dismissed by those who favor higher taxes.  Until recently Virginia was routinely in the top 20 for overall business taxes and top ten for corporate tax policy, but the 2021 ranking put us number 16 in corporate tax policy and in the bottom half (number 26) on overall business tax climate.

Faced with the opportunity to reap windfall state revenue from the 2017 federal tax changes, Virginia’s 2019 General Assembly offered modest tax relief to individuals and zero tax relief to corporations. Faced with a similar opportunity after Congress flooded businesses with COVID-related grants, the 2021 legislators got out their harvesters again and reaped more bounty.

Corporate income tax collections rose 83 percent in four years.  The Tax Foundation noticed and ranked accordingly.  It certainly has also noted the ongoing effort to impose mandatory unitary combined reporting rules on multistate companies doing business here.  Multistate companies have the easiest time leaving. The 2022 General Assembly may add a new reason.

The Atlantic Coast Pipeline is dead. A modest regional expansion of an existing natural gas line also serving Hampton Roads is dead, killing one and maybe two planned power plants. The Mountain Valley Pipeline which will bring more energy to Western Virginia customers remains embattled.  Virginia’s existing government is openly and gleefully hostile to fossil fuels in all forms, when just a couple of states over they celebrate and market their abundant gas supply.

Business leaders in the entire United States have noticed Virginia is now an anti-natural gas state, even at the local level.  What energy is allowed is about to get expensive, Northeastern United States-level expensive, even Germany-level expensive.  All of the projections show heavier price rises for commercial and industrial users than for homeowners, by design, but these will obviously be passed on.  Energy costs for the poor will be subsidized by a new energy tax hitting the biggest users the hardest.

Most of the new investments allowed will be in solar and wind.  Business leaders have seen what has going on in solar and wind-reliant Texas, California, and now much of Europe.  If energy reliability and costs really matter to a prospect, Virginia will lose the bid.

Sure, the CNBC network’s ranking put Virginia in first place again, but as explained before one new category saved the state from a downgrade and kept us above our rival North Carolina, the newly created “Life, Health and Inclusion.”  The business climate headwinds described above may or may not hurt a future CNBC ranking, but they have filtered into the rooms where investment decisions are made.  That is what matters.

Posted in Economy, Government Reform, State Government | Leave a comment

Yes Terry, Tax Hikes Grew the State Surplus

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Senate Finance Committee data illustrated the expected state revenue boost caused by 2017 federal changes. Predicted and seen in 2019 and 2020, it carried over into 2021.

At the September 28 debate Democratic gubernatorial nominee Terry McAuliffe dismissed the 2021 $2.6 billion general fund revenue surplus as entirely due to extra federal COVID relief funds, which is absurd on its face. By definition, every dollar is General Fund state tax revenue. It came from some form of state tax.

Why do Virginia Democrats continue to deny that recent state tax law changes are in part responsible for almost-embarrassing large cash surpluses recently announced? At the time the deeds were done, nobody was denying the big revenue impacts. The really big hit was a totally bipartisan decision, so Democrats can share the credit or blame.

Federal money flows in and out of a separate category known as non-general funding. Is there another part of the surplus lurking out there, left-over non-general funds raised during fiscal year 2021 but not spent in that period? Was it indeed made fatter by unspent federal dollars? Yes. It is just not included in the big reports shared and discussed in the public meeting of the legislative money committees.

One non-general fund surplus that was reported is in the state’s transportation funds, where federal funds do mix in. Add it to the general fund surplus, and the total is now about $3 billion. It is 100% certain that the 2020 transportation tax increases contributed substantially to that surplus. The gas tax went up a nickel per gallon in some parts of Virginia, 12.6 cents per gallon in all other parts of the state, and an entirely new statewide highway user fee (tax) was imposed on annual vehicle registrations, all July 1, 2020.

The largest element of the $2.6 billion general fund surplus can be traced back to the decisions made by the 2019 General Assembly to keep most of the state revenue windfall generated by the 2017 federal tax code changes. Republicans then ran the committees that made those decisions and fought like COVID-ridden kittens to protect us from that coming state tax hike.

But nobody hid the financial impact. State Secretary of Finance Aubrey Layne (now out of office so let’s admit, a Republican) invested in some excellent financial modeling that showed a revenue surge coming, and then later on confirmed the models were proving fairly accurate. All of these developments were reported on in my column in Bacon’s Rebellion far more than anywhere else.

The impact of the state’s failure to adjust its rates or standard deduction to match congressional actions had the greatest impact on business taxpayers using the corporate income tax. Revenue in the fiscal year just ended rose more than 80% over four years prior.

Two years ago, Layne was quite open about how the federal “tax conformity” windfall also ballooned the state’s 2019 surplus. Now the standard line is, what tax conformity windfall?

The other major contributor to the general fund surplus (and somewhat to the transportation surplus) was sales taxes collected on remote sales through the Internet, hard to collect from the seller prior to a court decision. That was a good policy decision. But people pay more tax after it passed, and it fattened the surpluses.

All the signs are this explosion of state revenue is just getting started (the September reports will be telling). The fiscal year we are now in will reflect the second part of the gas tax increase, the new tax on electric bills tied to the Regional Greenhouse Gas Initiative, and another round of state taxes on Payroll Protection Program (PPP) grants and a similar state grant program helping employers maintain staffing during the recession.

That is the one part of the recent surpluses where McAuliffe’s claim that federal funds are responsible has some truth. Had there not been billions flowing into Virginia for PPP grants and loans, Virginia would not have been able to skim its 6 percent off the top with its income tax. The General Assembly could have made another decision, not to tax, and the failure to do so was – again – disappointingly bipartisan.

The argument over the explanation for the surplus is a sideshow to the real campaign debate, which is whether some tax cuts in compensation are called for. To his credit, Republican nominee Glen Youngkin has routinely recognized that tax hikes built the surplus and tax cuts of some form are called for. The elements of his proposed tax cuts line up well to partially reverse the recent increases.

Search in vain for tax cuts promised by McAuliffe, even those sought by liberal allies who complain (with justification) that Virginia taxes lower income workers too heavily. Youngkin’s idea to eliminate the sales tax on groceries, in particular, was pulled straight off their wish list.

Would there still have been a revenue surplus had the state fully adjusted to prevent a “tax conformity” windfall, or failed to adopt the Wayfair sales tax rules, or skipped some other changes? Perhaps. The COVID federal funds did stimulate personal spending and maintain jobs. But absent those changes the excess revenue would have been far, far smaller.

Posted in Economy, Government Reform, State Government, Taxes | Leave a comment

VIDEO: Watch “Confessions of a Union Negotiator”

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Watch a replay of “Confessions of a Union Negotiator…What to expect if public sector bargaining passes in your county.” Frank Ricci, a former firefighter union negotiator details the tactics and strategies used by government unions during collective bargaining.
Counties, cities towns, and school boards in Virginia now have the ability to allow government unions to collectively bargain on behalf of all public employees. While there is no obligation to allow such monopoly union contracts, local governments and School Boards who wish to consider public sector bargaining should go into it clear-eyed about what it entails.
Mr. Ricci talked about how the process works in the real world of collective bargaining. He shared the pitfalls of public sector bargaining he learned while being on the union side of the bargaining table in Connecticut.
Mr. Ricci was joined by Thomas Jefferson Institute Visiting Fellow F. Vincent Vernuccio, detailed specifics on the law passed last year in Richmond allowing government union to bargain and what localities are doing now.

Posted in Government Reform, Labor | Leave a comment

Richmond City May Cancel Gas Service For Its Citizens, Henrico and Chesterfield

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BE IT FURTHER RESOLVED: That the (Richmond) Council hereby commits to working with the City’s Administration on an equitable plan to phase out reliance on gas and shift to accelerated investment in City-owned renewable energy and hereby recognizes that the continued operation of the City’s gas utility is an obstacle to the City’s goal of Net-Zero emissions in accordance Resolution No. 2020-R024, adopted June 8, 2020.

Translation:  The Richmond Gas Works, a municipal owned public service utility, is targeted for closure.   Council sees its continued operation as “an obstacle.”  The 117,600 customers (as of 2018) may soon need to run their lives and businesses without natural gas.  Those customers are not confined to the city itself but are also located in Henrico and Chesterfield counties. (Disclosure:  I am one of their Henrico customers.)

The city probably has a legal (and enforceable) obligation to continue service under current law. Every candidate for the legislature in Richmond, Henrico and Chesterfield needs to tell the voters whether they will let this stand or oppose this effort to kill natural gas options.  It will end up before the General Assembly or the State Corporation Commission or the courts or all three.  The resolution itself contemplates needing legislation to accomplish its goals.

Here is a map of the current service territory. The city is probably less than half the full area.  Think of all the industries around the Richmond airport and south of town along Interstate 95.  Be prepared to say goodbye to some of them.

Incumbent candidates who voted for the Virginia Clean Economy Act and the similar bills in 2020 and 2021 should further explain if they understood this to be the ultimate goal.  When you talk about an economy that is 100 percent carbon free, in all aspects, that basically means no natural gas.  Period.

The council resolution (full text here) was adopted unanimously during the September 15 council meeting, having been introduced by Second District Councilwoman Katherine Jordan back in July.  The only place I saw the action reported was on Twitter, with green activists all excited.  They are dead serious about this happening.

The city gas company serves homes, small businesses, churches, and huge industrial operations.  Those big firms with an industrial process tied to natural gas will simply consider relocating.  Restaurants will need to dump gas ovens.  Residential customers, of course, will need to convert to electric heat pumps and stoves at a substantial cost already outlined in a previous Jefferson Policy Journal post.

That earlier post and the report it was based on were dismissed by some as not credible.  Richmond City Council just moved it from hard to believe into the “consider this fair warning” category.

According to a 2018 city annual report on its utility operations, the gas operation had gross revenue of about $155 million in 2018 and gross operating profits of $20 million.  After debt payments and other adjustments, the net profit was $10 million.  On top of that, of course, the city also collects consumer use taxes directly from the consumers of the gas. It makes money both ways.

The financial benefits to the city would largely continue, of course, if the intent is to simply let a private entity buy the assets (actual capital value unknown) and operate as public service companies do elsewhere in Virginia.  But that is not the intent.  That does not advance the city and the state (and national) goal of net zero or zero emissions.

I have no idea what bonds or other debts support that gas system, but that is a further complication that could affect the city’s bond rating.  Another provision of the resolution calls for the city to stop dealing with any banks that invest in fossil fuels in any way.  In other words, to stop working with banks investing in the City of Richmond itself, since it owns and profits off a gas company.  Which get dumped first, banks or the gas company?

As to the idea of city-owned renewable energy assets to instead serve those customers, again, that is not possible under current law.  The existing electricity monopoly belongs to Dominion Energy Virginia, and it is already planning more wind and solar than we will ever use.

There is a check box on the resolution form noting whether or not a fiscal impact statement was prepared.  You get one guess which of the two boxes was checked, yes or no.

These are not serious people.  They should not be allowed to handle money or manage large complex operations.  Even if this particular effort fails, the gas operation now needs to move to safer private hands.  But this outcome was predictable and predicted, and other progressive-dominated local governments share exactly the same goals.  This is your seven a.m. wake-up call (most having ignored the wake ups at six and six thirty.)

Posted in Energy | Leave a comment