Securing Workplace Freedom and Rights: Ideas for the New General Assembly

Posted on January 7, 2022 by F. Vincent Vernuccio
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In 2020 the Virginia Assembly changed a decades-old law and allowed local governments to collectively bargain with most public employees. The law went into effect on May 1, 2021 and gives “a county, city, or town… [which includes] any local school board” the ability to adopt a local ordinance or resolution to allow them to bargain with government unions.

As a result, multiple counties, cities and school districts debated and are passing ordinances giving government unions a monopoly on representing public employees. Many of these verge on violating Virginia law or the rights protected by the United State Constitution.  They also put special interests ahead of individual public employees and taxpayers.

While the law may and should eventually be repealed in Richmond, there are steps that law makers and the Youngkin administration can take to protect the rights of public servants.

Recommendation: Protect Public Employees First Amendment Rights and paychecks

The first is to protect the constitutional rights of public employees across the Commonwealth.

Several ordinances allowing government unions to collectively bargain also require public employers to deduct union dues from public employees’ paychecks. There are no provisions informing public employees about their rights before agreeing to pay dues, which is being permitted without even a physical signature. Worse those employees can be locked into paying union dues for up to a year.

Public Employees in Virginia have both a statutory right to choose to pay union fees or not through the state’s right to work law and, like all public employees across the country, a First Amendment Right thanks to the Supreme Court’s decision in Janus v. AFSCME.

Right-to-work simply means that a union cannot get a worker fired for not paying them. Further, Janus held that everything government unions do is political, and because of that, public employees have a First Amendment Right to decide for themselves whether or not to pay union dues or fees.

Virginia could pass a law requiring localities to inform and respect the rights of public employees. Additionally, since it is already a constitutional right, executive action or leadership could also direct localities to respect the rights of their employees.

These actions should require public employers to inform public employees about their First Amendment right to choose to pay dues and should ensure proper bookkeeping by having the public employee opt-in to having union dues deduced from their paychecks directly to their employer. Unions should not be allowed to submit dues deduction authorization cards or a list of employees to the employer. Instead, employees should be safeguarded by having them submit a signed dues authorization card directly to their employer. Finally, voice authorizations, which most of the local ordinances already passed permit, cannot be used by unions to take money from a public employee’s paycheck.

Further, to prevent fraud or misunderstanding, the employer should affirm the wish of the employee by confirming with the employee through email or other means that he or she wishes to have dues taken out of his paycheck.

On the West Coast there are multiple examples of unions forging workers’ signatures on dues authorization forms. The Freedom Foundation of Washington has several lawsuits challenging these forms.

This will help prevent fraud or signatures forged on dues authorization cards which is the subject of several West Coast lawsuits.

To ensure that public employees wish to continue this deduction, this authorization should be renewed annually but public employees should not be limited when they can opt-out of the union and opt-out of paying dues or fees. Local ordinances or state law should be specific that employees can opt-out of the union at any time without paying any more dues. Workers should have the right to leave a union, and to stop paying union dues at any time.  Some ordinances already enacted limit that right.

Recommendation: Union democracy should be protected. 

Public employees should have the right to regularly vote on the union that represents them at the workplace. No local ordinance that has been enacted or proposed includes this right.

For this reason, every two years public employees should have the right to vote to keep the union that has a monopoly representing them at their job, to remove it, or change to another union. Several states have passed laws protecting the right of public employees to regularly recertify the union at their workplace.

When a union is up for recertification the union would need affirmative votes from a majority of all employees in the unit (not just union members) and the election should be conducted by secret ballot as required by Virginia law; however, for recertification elections the votes may be electronic, by phone, or other means that protect the secrecy and accuracy of the election.

Union recertification empowers public employees to choose the representation at their workplace and prevents unions from becoming an heirloom, where employees vote once and the union stays for a generation or longer. In other states with older public sector collective bargaining laws but without union recertification, the vast majority of public employees were hired without ever having a say about which union represents them.

The cost for the electronic elections is also economical, according to a 2015 study by John Wright, a former labor policy researcher at the Show Me Institute in Missouri. Wisconsin’s annual recertification process averages just $1.50 per vote and the cost is paid mostly by union filing fees.

Recertification should also not prohibit the ability of employees to petition to remove the union at their workplace. Again, both certification and decertification procedures are required by Virginia’s collective bargaining law and will be necessary in any ordinance or resolution. Decertification should follow the same guidelines as initial certification where 30 percent of employees sign a showing of interest petition to remove a union and there is a secret ballot vote. Some of the local collective bargaining ordinances already enacted make it much easier to certify a union then to remove one. These ordinances allow unions to organize with a majority of those voting in an organizing election but removing the union requires a higher threshold by a majority of everyone the union represents.

Additionally, employers should also be allowed to instigate a decertification election if they have a good faith belief that a union’s membership has dropped below 50 percent. This can be accomplished by calculating the number of employees having dues deducted from their paychecks compared to the number of employees the union represents.

Recommendation: Prohibit taxpayers from paying for union work

Release time is the practice of public employees who are also union officials getting paid their taxpayer-funded salary to conduct union work while on the job. Employees who need to do union work during business hours should be given time off that is either unpaid or is counted toward their vacation hours.   Monetary compensation should come from the union, not the taxpayers.

A Yankee Institute study by Trey Kovacs reported that in Connecticut “taxpayers subsidized state employee unions with 121,000 hours of paid time off [in FY 2015], costing $4.1 million”

Every ordinance that has passed allowing public sector collective bargaining includes a provision allowing for taxpayer funded release time. However, the practice is not new in Virginia. For example, even before government unions had the ability to bargain in Fairfax both the county and the school district allow for release time.

Similarly, if unions are using employer office space or supplies, they should be charged the fair market value of such space and the office equipment they use.

These recommendations and more are included in Thomas Jefferson Institute’s toolkit “Virginia Collective Bargaining: Recommendations and models for local collective bargaining in Virginia” available at https://www.cbatoolkit.com/ . Print copies of the Toolkit can be requested at Thomas Jefferson Institute 7011 Dreams Way Court, Alexandria, VA 22315 or via email at info@thomasjeffersoninst.org.

Posted in Government Reform, Labor, Workplace Freedom | Comments Off on Securing Workplace Freedom and Rights: Ideas for the New General Assembly

A Bold Reform for Education Funding

Posted on January 7, 2022 by Christian Braunlich
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(Author’s Note: Eight years ago, we suggested incoming Governor Terry McAuliffe pursue a bold education funding reform that would modernize and supercharge Virginia’s education infrastructure.  He chose not to.  We offer it again, verbatim, to Governor-elect Glenn Youngkin … because we believe the idea crosses ideological lines and party divides and would represent the first full-throated reform of Virginia education funding in decades.  Judging from his appointments, Mr. Youngkin has been more than willing to move beyond “business as usual,” and that tendency portends well for the Commonwealth.)

George Allen and Standards of Learning reform.  Jim Gilmore and car tax reduction.  Bob McDonnell and transportation reform. That’s what we remember.

So what does Governor-elect McAuliffe want to be remembered for when he walks out of the office?

How about reforming K-12 education through “Weighted Student Funding?”  This is a concept attracting attention from Governors as diverse as Jerry Brown (D-CA) and Rick Snyder (R-MI), and policy analysts from Ronald Reagan’s Secretary of Education Bill Bennett to John Podesta, who chairs the center-left Center for American Progress.  Here’s why –

Johns Hopkins professor Dr. Susan L. Aud summarized Virginia’s education funding formula like this:  “To determine the Basic Aid associated with each student in a school division, the maximum number of teachers the state will fund for each grade level in each division is calculated, based on the ADM (Average Daily Membership) and pre-determined guidelines for the minimum and maximum number of students per type of teacher.  The average salary for each type of position is then multiplied by the number of positions required by the enrollment to arrive at a total allowable salary cost.  This number is divided by the number of students to derive an average Basic Aid dollar amount per ADM, known as the Basic Aid PPA.”

If you’re confused, you’re not alone.

This formula is intended to fund Virginia’s Standards of Quality (SOQ).  Created more than 40 years ago, when Virginia was finally coming out of the segregation era, the SOQs were designed to ensure an equivalent standard of quality inputs:  textbooks, teachers, principals, and other instructional components.  The formulas funded those inputs:  If you have “x” number of students, you need “y” number of teachers.

But the world has changed in 40 years.  Educating low-income, highly mobile, Limited English Proficient, or disabled students simply takes more, and our funding formulas fail to recognize that harder (and more expensive) task.

Worse, while principals and teachers are now held accountable for their results, they have little control over how money is used at their school or in their classroom.  How school dollars are spent is decided elsewhere, using complex budgets and allocations that leave educators, parents, and taxpayers in the dark.

This gives us with the worst of all worlds – expenses that can’t be tracked or understood, funds that don’t reach the targeted populations, and an inflexibility both archaic and inefficient in a 21st Century world.

A “Weighted Student Funding” mechanism is designed to provide increased budget transparency, local school flexibility, and targeted resources.  Details differ around the country, but it operates on five fundamental principles –

  • Funding should follow the child, on a per-student basis, to the public school that he/she attends.
  • Per-student funding should vary according to the child’s need and other relevant circumstances.
  • Funding should arrive at the school as real dollars (i.e., not teaching positions, ratios or staffing norms) that can be spent flexibly, with accountability systems focused more on results and less on inputs, programs, or activities.
  • These principles for allocating money to schools should apply to all levels (federal, state, divisions and schools).
  • Funding systems should be simplified and transparent.

The idea is simple:  Determine a dollar value for each student.  Make it higher for students requiring more help.  Drive those dollars down to the school level, empowering school-based leadership to decide how best to spend the funds educating the students.

By putting resources for decision-making at the school level, principals can do for children what’s needed at their school, not what’s decided at the division level.  If one school needs more tutoring, or another needs an additional aide, or a third needs more teacher training for new teachers – the school chooses, rather than a “one-size-fits-all” central office decision.

To be sure, there are plenty of questions:  Which decisions should be centralized? Which should not?  How much weight should be assigned to different student categories?  Should local funding be included, and how?  Will any school divisions “lose” state funding under such a system? How can they be “held harmless?”

But that’s precisely why the time to think about such a reform is now—not in the third year of an Administration.  A blue-ribbon panel – with experienced national experts as well as state leaders well-versed in the current system – can start exploring the idea with a long-term deadline that looks over the horizon of the next legislative session.  Finding a solution shouldn’t be limited to a political deadline.

It’s time to put reform of education funding on the table – not with a timid “nibble around the edges” discussion but with a major overhaul that merits full-throated debate and recognizes the demographic and social forces confronting education in Virginia.

Getting that done would be a notable accomplishment, and one worth being remembered for.

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Dominion Trims Clean Energy Conversion Cost By Removing Reliable Power from Its Plan

Posted on December 28, 2021 by Stephen D. Haner
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The projected consumer cost of Dominion Energy Virginia’s conversion to wind and solar power rises steeply in the utility’s latest capital spending plan.  Although slightly reduced from earlier estimates, the utility told the State Corporation Commission its residential customers may see prices jump more than 50% by 2030 and 70% by 2035.

The higher consumer energy costs expected from going “green” became a political talking point during the last election.  Another effort is expected in the 2022 General Assembly to revise or repeal the Virginia Clean Economy Act.  That 2020 legislation mandated the coming move to wind and solar and the end of fossil fuels, but it passed only narrowly on largely party-line votes.

In 2020, the Commission staff reviewed the company’s capital plan and predicted that by 2030, a residential customer using 1,000 kilowatt hours per month would pay up to $808 more per year.  In this recent review, the projection using the SCC staff assumptions comes out to $733 more per year ($61 per month) by 2030, still a 53% increase above 2020 levels.

What changed?  For one thing, Dominion altered the plan by removing some additional natural gas generation it was planning to build.  The 970 megawatts of new gas plants were intended to add reliability to the system as the intermittent wind and solar plants became a larger part of the daily power mix.  Dominion may have lowered its projected costs by sacrificing its safety net.

It left the door open to bring it back, writing: “Associated reliability analyses are complex, under development, and still ongoing…Future Plans will be updated, as needed, based on the results and findings of these reliability analyses.”

Dominion’s update on what is called its integrated resource plan (IRP) was filed September 1.  The case file includes only Dominion-supplied information, with no additional analysis by staff on the record.  The SCC accepted it on October 28, making clear in the final order that it was not signing off on the plan itself.

As is commonplace in these cases, much of the detailed information on how costs will rise over the coming decades was declared to be confidential by the utility, and the Commission allowed it all to be hidden from the public.  Reducing this secrecy is a needed reform.

So, for example, you cannot see on the chart how much Dominion projects it will charge customers in future years for the carbon allowances it must buy under the Regional Greenhouse Gas Initiative.  But RGGI is included, so leaving that interstate carbon tax compact (as Governor-elect Glenn Youngkin has proposed) would have a direct impact on lowering the rate of bill increases.  How much it would save is hidden.

One planning element Dominion added, however, was an IRP alternative that it considers a lowest cost option.  It would meet all the carbon dioxide reduction targets in the VCEA but would not include all the solar and wind plants that are mandated by that statute.  Instead it would meet growing demand by making additional capacity purchases from other suppliers and states (where fossil fuels might remain common.)

Under that plan, that residential customer bill would rise 17% in ten years, up about $20 per month.  The company would still be emitting about 18 million tons of CO2 per year.

The other two plans, designated B and C, would rapidly retire the utility’s remaining fossil fuel plants.  Plan B would cut most of them, while Plan C would eliminate them all and achieve the zero CO2 emissions by the 2040s.  Plan C provides only a slightly higher consumer cost than that for Plan B, mentioned at the beginning of this article (an added $733 per year for a household using 12,000 kilowatt hours.)

Dominion disputes the accuracy of the SCC’s method of projecting costs.  It claims the SCC is underestimating the future output (capacity factor) of solar facilities and also underestimating growth in sales.  Dominion claims Plan B will only cost that homeowner $556 more per year, a 40% increase by 2030.

The IRP summarizes the coming energy conversion by year out to 2036.  Both Plan B and C include the full development of Dominion’s proposed offshore wind project, with 2600 megawatts coming online in 2026 and another 2600 constructed by 2033.   Plan B calls for more than 14,000 megawatts of solar resources in the next 15 years, and another 4,000 megawatts a decade after that.

Both Plan B and C assume continued operation of Dominion’s four nuclear reactors, which will require extensions of their federal licenses to operate past 60 years of age.  Both include massive amount of storage capacity, to hold renewable power generated during low demand hours.  That is where Plan C, the zero emissions option, differs from B.  It requires more storage to compensate for having no remaining on-demand fossil fuel plants inside the state.

Is any of this likely to be changed in 2022?  As with many of the plans to unravel legislation adopted in 2020 and 2021 while the Democrats held total control over state government, the Virginia Senate is likely to be the roadblock to VCEA repeal.  The Democrats still hold a 21-19 majority there, with a 12-3 stranglehold on the key committee, and one Senate Republican (Jill Vogel of Fauquier) voted for the bill in 2020.

Posted in Energy, Environment, Government Reform | 3 Comments

Northam Blinks. Tax Cuts Are Coming.

Posted on December 14, 2021 by Stephen D. Haner
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Virginia’s leaders are no longer debating whether to cut state taxes. The argument now will be over how to cut state taxes.

Outgoing Democratic Governor Ralph Northam announced Tuesday that his final introduced budget will include $2.1 billion in lower taxes, created by a one-time rebate to all taxpayers, a one-time tax break for certain businesses, and two small changes with long term benefits.

Incoming Republican Governor Glenn Youngkin, on the other hand, has proposed a similar one-time tax rebate to all taxpayers. But his other tax proposals are far broader and deeper than Northam’s and will probably require some trimming in parts of the introduced budget coming from Northam. The actual budget proposal is released later this week.

Youngkin had asked Northam to include tax reform in his package, and to his credit Northam did. It is the 2022 General Assembly which will make the big decisions on how and by how much taxes will go down, and for whom, but they now enjoy a $2.1 billion head start.

“Gov. Northam’s budget proposal is a step in the right direction but does not entirely fulfill Virginians’ mandate,” said Youngkin transition spokeswoman Macaulay Porter.

“We appreciate the Northam administration laying the foundation for these elements of the Day One game plan so that Gov.-elect Youngkin can hit the ground running on Jan. 15 to begin executing on his key campaign promises and finish the job.”

The admission from the outgoing governor that tax cuts are in order is gratifying. The message was very different during the campaign just completed. The Thomas Jefferson Institute spotlighted the state’s growing cash glut a year ago, continued to bird dog the issue, and has been the only advocacy group also pointing to the various tax increases under Governor Northam as the main cause of the surpluses.

Northam is still in denial on that point, crediting the $2.6 billion surplus revenue last year and the similar surpluses now projected into the future to “unprecedented economic strength.”

Northam’s proposals may have caught some allies off balance, as many liberal advocacy groups have been opposing the idea of any tax cuts as misguided or damaging to key governmental priorities.

Youngkin’s tax proposals are superior to those offered by Northam in several ways. They are more clearly targeted at ameliorating the various tax increases that created the surpluses. In particular, he has adopted the Jefferson Institute’s key proposal to greatly increase the standard deduction allowed to all taxpayers who don’t use itemized deductions when calculating income tax.

The 2017 Tax Cuts and Jobs Act doubled the federal standard deduction and creating a yawning gulf between the federal and state amounts. That is what caused income taxes to explode at the state level. Failure to adjust the standard deduction will maintain those income tax increases on all taxpayers, in fact even leaving minimum wage earners subject to income tax.

Northam proposes to lower the burden on them by enhancing the earned income tax credit (EITC.) That means the state will continue to extract withholding paycheck to paycheck, and then taxpayers use a bureaucratic process to get some back. It is far better to simply tax them less initially.

The real reason the EITC is the preferred tax “reform” for Democrats is it provides zero benefit to anybody above a modest income. The higher income taxes now imposed on middle and upper income taxpayers using the standard deduction remains in place for years to come. Youngkin’s proposal benefits far more Virginians.

Both Northam and Youngkin have now proposed one-time rebates, presumably to be paid sometime in 2022, similar to those sent out in 2019. Northam’s would be $250 for an individual and $500 for a married couple filing jointly. Youngkin’s is $50 higher per person. In neither case does such a payment constitute long-term tax reform, and the future surpluses are not reduced by the step.

Both Northam and Youngkin have proposed a change in the sales tax on groceries (unprepared foods), already taxed at the lower rate of 2.5%. Youngkin would eliminate it, while Northam would forgo the state’s 1.5% but retain the 1% tax which is shared with the local governments. Many local governments are also facing an embarrassment of tax riches thanks to inflated prices on goods and real estate but are expected to cry poverty to any proposal to trim that sales tax on groceries.

Youngkin, however, has also proposed a one-year hiatus on the most recent 5 cent per gallon increase in the gasoline and diesel taxes. That is missing from the Northam proposal, even though transportation tax revenues are also producing unexpected surpluses. Also ignored is Youngkin’s proposed income tax exclusion for military retiree pay.

On his part, Northam has proposed an end to the practice of making certain larger retailers pay their sales taxes a month earlier than the normal schedule. That was implemented years ago as a pure accounting gimmick, boosting revenue in one year at the expense of the next. Fixing the payment schedule has a one-time revenue impact but doesn’t really save the retailer anything. For Northam to pass that off as a tax break is disingenuous. (But he isn’t the first do so.)

The last time the state pulled that “accelerated sales tax” stunt and then reversed it, a member of the State Senate admitted in debate: “We have to fix this now so that we can do this again the next time we’re in a bind,” or something to that effect.

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How California Now Controls Virginia Auto Market

Posted on December 10, 2021 by Stephen D. Haner
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Virginia’s automotive sales market is now officially controlled in Sacramento, with the likelihood that no new internal combustion engines can be sold in the Commonwealth after 2035.

The Virginia Air Pollution Control Board, acting not with discretion but on orders from the General Assembly, voted December 2 to adopt Advanced Clean Cars Program regulations that delegate ultimate control to the California Air Resources Board.  Virginia will simply follow Sacramento’s lead in dictating an ever-increasing percentage of new car sales be certified as low emission or zero emission by the CARB.

Legally it would be similar to Virginia being forced to comply with federal regulations, except these rules will come from and be amended by California and its governor, regulators and legislature.  Who in Virginia gets to vote for them? No one.

Legislation in 2021 directed the Air Pollution Control Board to adopt these rules with no deference to the regulatory processes.  If you missed the usual public notices or hotly-contested public hearings, it may be because they didn’t happen.  Media coverage has also been sparse.

Low emission (think hybrid) and zero emission (generally electric) vehicles are popular with many buyers already and will likely continue to be subsidized in various ways.  Their prevalence was going to grow regardless.  But it is California’s goal to ban the sale of internal combustion vehicles and perhaps even low emission hybrids by 2035, as expressed in an executive order from its governor.

If and when that happens, under this new regulation it also happens in Virginia. No local action is required.  Perhaps that explains this ecstatic quote from the meeting reported by the Virginia Mercury:

“That is a very significant regulation. It will have a very positive impact on Virginia’s environment,” Mike Dowd, chief of the Virginia Department of Environmental Quality’s Air Division, told the board after the measure’s passage. “If it wasn’t against state personnel regulations, I’d be popping a bottle of champagne now.”

It was the language in the 2021 bill that overrode the Administrative Process Act’s required reviews and public input that made this rocket adoption possible. That and Section 177 of the federal Clean Air Act, which made it possible for a) California to adopt fleet emissions standards more stringent than federal rules and b) other states to piggy-back on California’s program.

The Transportation and Climate Initiative, no longer under consideration in the key states, was an effort to control the supply of motor fuels.  The CARB program seeks to reduce the burning of fossil fuels by limiting the supply of internal combustion engines.  A good explanation of how it works can be found here.  Several of the northeastern states that were to join TCI have already aligned with CARB before Virginia did.

The CARB program applies to the manufacturers, grants them “credits” for the sale of certified LEV and ZEV new cars, and then demands they must expend credits in order to sell uncertified cars.  Over time, the number of allowed uncertified internal combustion cars is to ratchet down.  If a manufacturer doesn’t need credits for gasoline cars (think Tesla), they become a commodity which can be sold for profit.

The Virginia regulation, which can found on pages 5 through 19 of the agenda for the recent meeting, exempts the sale of used cars, transfers of existing cars, emergency vehicles, military vehicles, or a car sold in Virginia for registration in a state outside the CARB’s reach.  Basically it covers new cars and light trucks under 14,000 pounds.

The General Assembly also adopted a state-funded subsidy program for the purchase of electric vehicles but didn’t identify a funding source.   With the generous customer rebates on the table, Virginia’s auto dealers joined in pushing for both the subsides and the alignment with CARB. Auto Dealers Association President Don Hall put its arguments in a guest column for the Richmond Times-Dispatch during the session, and also advocated tax-funded charging infrastructure.

“If Virginia wants to emulate California, the commonwealth also must match California’s investment. A conservative estimate of California’s financial commitment to the EV market — primarily through incentives and infrastructure — roughly is $3.5 billion,” Hall wrote.  He said Virginia needs to spend $720 million over five years.

 Long-term operating costs may or may not offset the bite, but these hybrid and all-electric vehicles right now sell for a premium price over internal combustion vehicles.  The financial benefit to auto dealers of forcing manufacturers to build more of the former and fewer of the latter is obvious.

The expected increase in electricity demand and related transmission expansions is not exactly breaking hearts among utility executives, either.

The added gasoline taxes from the abandoned Transportation and Climate Initiative might have paid for the proposed Virginia electric vehicle subsidies or that charging infrastructure.  Governor Ralph Northam, who embraced the subsides and this delegation of regulatory control to California, has one more budget to propose next week. Massive federal funds for those purposes are part of the Biden Administration “Build Back Better” proposal languishing in the U.S. Senate.

Northam could use his budget to propose a way to start paying the subsidies with state or federal funding.  It will actually be telling if he fails to do so.  But no additional state funding is needed to begin to implement the California vehicle fleet rules. It would take new legislation now to prevent it.

 

Posted in Business, Economy, Government Reform, State Government | Tagged | 2 Comments