Collective Bargaining in the Schools: Prescription for Problems

Posted on February 19, 2020 by Christian Braunlich
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Joseph Ocol is the kind of teacher most parents would fight to have teach their daughter.

His Englewood, Chicago girls’ chess team won the national championship in 2016 against 60 other schools, an achievement noted in the Congressional Record, by news media and by the mayor and city council. And they’ve gone back since then, placing 4th last year.

But back in 2016, the Chicago Teachers Union (CTU) went on a one-day strike and Ocol made the decision that, if they were to have a chance at winning, his chess team couldn’t afford to take a day off from training. So Ocol skipped the strike to coach his kids.

For his efforts, the teachers’ union threw Ocol out. CTU simply put union needs above the needs of children from a community in which 45 percent are below the poverty line. Those who strayed from the party line were to be punished.

There are lessons in this for Virginia. Those looking at the notion of “collective bargaining” with a gauzy vision of teachers and administrators sitting down and singing “kumbaya” will be in for a rude awakening.

Because the reality is significantly different. And with legislation under consideration in the General Assembly allowing for public employee collective bargaining (funny how the General Assembly excluded their own employees), Virginians need to know what they are in for – particularly in the field of education.

In testimony before the House Labor and Commerce Committee (the Senate Committee did not want any public comment), Virginia School Boards Association lobbyist Stacy Haney cited numerous studies linking collective bargaining with a negative impact on student achievement, particularly on minority and disadvantaged students. A 2019 study published in the American Economic Journal: Economic Policy demonstrates that teacher collective bargaining has negative effects on long-run student outcomes, particularly for black and Hispanic males.

Ms. Haney also cited a 2018 study published in the Economics of Education Review, noting that the study associates “collective bargaining with lower overall student achievement and also ‘with greater proportions of students scoring at the bottom of the performance distribution and smaller proportions scoring at the top tail of the distribution. These relationships are particularly strong for subgroups of traditionally disadvantaged students …’”

In short: collective bargaining is bad for struggling and low-income students.

Why is that? A good part of the reason is that collective bargaining agreements don’t just govern teacher pay. They frequently determine length of the school day, the school calendar, class size, and after-school hours. If it isn’t in the contract, a teacher or supervisor can’t do it. And these are the things that affect classroom learning.

Those contracts also set the terms for salary increases and discipline, limiting the ability to reward quality teaching (“seniority only!”) or remove ineffective teachers. Do you remember reading about New York City’s “rubber rooms?” The ones where ineffective or dangerous teachers were sent away from children to play games on their phones, salaries paid by taxpayers, while the city spent years in disciplinary action to remove them? That was a consequence of the collective bargaining contract.

This is not confined to huge systems like New York City. In Providence, Rhode Island public schools – about the size of Richmond and smaller than 12 Virginia school systems – the Johns Hopkins Institute for Education Policy analyzed the system’s devastatingly low student performance and sent teams to conduct interviews throughout the city.

Among its conclusions: “Of all the issues raised across all interviews, the (Collective Bargaining Agreement) hiring policies came in for the greatest critique,” noting that “it was next to impossible to remove bad teachers from schools or find funding for more than the one day of contractual professional development per year.”

The team was told by teachers … that the inability of a school to fire the weakest teachers was a real problem, because there were teachers who “just weren’t doing what they were supposed to be doing.” One principal reported still going to hearings about a teacher who had finally been put on administrative leave for repeated, inappropriate physical contact with children. The teacher is still on the roster and is still paid.

The Collective Bargaining Agreement hurt students. But it also hurt effective teachers seeking to do right by the children they teach.

This comes as no surprise to those of us who grew up in collective bargaining states. When the teachers union becomes the legally protected and exclusive bargaining agent and when funds are tight, the priority is building dues-paying membership (more teachers rather than professional development; protecting the teachers you have regardless of competence) instead of building a quality workforce or removing barriers to ensuring children receive the education that best suits their needs.

If the collective bargaining agreements working their way through the General Assembly continue unfettered, Virginians are about to learn what that means for their children.

Or they could just ask Joseph Ocol.

Chris Braunlich, a New York native, is president of the Thomas Jefferson Institute for Public Policy and a former president of the Virginia State Board of Education.

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Virginia Education Association Wants Collective Bargaining for Teachers — but Talks With Its Own Employees Led to Lawsuits, Sanctions

Posted on February 19, 2020 by Mike Antonucci
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Last November, Democrats won majorities in both houses of the Virginia legislature. With Democratic Gov. Ralph Northam in place, the party gained full control of the state government. Public-sector unions are wasting no time to try to get friendly legislation passed.
The most important item on the agenda is HB 582, which would allow local government entities, including school districts, to engage in collective bargaining with their employees. Virginia is currently one of a handful of states that ban the practice. The bill passed the Virginia House of Delegates, 54-45.
The Virginia Education Association and a coalition of public employee unions have mounted a major lobbying campaign in favor of the legislation.
“Collective bargaining will provide a forum in which employers and employees can join together to tackle such problems,” said Dan Hale, an elementary school teacher. “This is not an ‘us versus them’ scenario. Again, it is about working collaboratively for the betterment of all.”
The state teachers union echoes that line of reasoning, asserting that “collective bargaining for educators is good for everyone.” Among its many virtues, the union claims, is a reduction in staff turnover.
The odd thing is that the union has been bargaining collectively for years — not with school districts, but with its own employees.
Virginia’s ban affects only public employees. The union is a private organization, and those who work for it are private employees. Free to collectively bargain, the union’s employees formed their own union, called the Virginia Professional Staff Association. The association represents an estimated 40 labor relations specialists, called UniServ directors, and other professionals who work at the union’s headquarters in Richmond.
Far from the collaborative nirvana depicted in its talking points, the teachers union’s own experience of collective bargaining is filled with lawsuits, grievances, no-confidence votes and sanctions.
In October 2012, the staff union walked an informational picket line outside VEA headquarters during contentious contract negotiations. Management quickly reached a deal but the next month laid off at least seven employees.
In 2014, the association filed suit against the union, claiming a breach of contract when VEA decided to eliminate or reduce a specific staff retiree medical stipend. The staff union wanted the matter sent to arbitration, and the court agreed. The two sides ultimately reached an out-of-court settlement, though it took another two years.
Soon after the settlement, the staff union began to air its discontent with its union managers. One of its main concerns was… staff turnover. It posted this photo on its Facebook page in August 2017:
In February 2018, the association asked its parent union, the National Staff Organization, to impose sanctions on VEA, accusing union management of engaging in “intimidation tactics.”
The next month, the staff union delivered a vote of no confidence in VEA’s director of field support, claiming she was unresponsive to staff concerns.
“As a result of these and other issues, VPSA morale has suffered dramatically, frustration has mounted, and there is a general feeling that [she] routinely creates unnecessary obstacles to, and interferes with, UniServ staff work,” read the no-confidence document.
Lest you think the complaints are all from one side, one retired teachers union activist pointedly blamed the staff for the hostile atmosphere.
“It seems VPSA still up to their usual tricks! For YEARS VPSA has tried EVERY TRICK they could think of to tear down the very structure of the VEA — they have organized protests, whisper campaigns against elected leaders, stalled negotiations with ridiculous demands, clouded and confused local association leaders with patently false information, done next to nothing to increase membership, demanded cuts in member programs if that’s what it takes to provide them ever increasing salary increases and health care benefits — never seeming to understand the very direct relationship of membership dues to healthy budget balances,” she wrote on the staff union’s Facebook page.
This rancor came to a head in July 2018, when staffers were handing out leaflets detailing their grievances outside of a teachers union organizing workshop held at the University of Richmond. Someone from the union called the campus police to have the leafleters removed from the premises. The staffers left peacefully but soon filed an unfair labor practice complaint with the National Labor Relations Board over the incident.
The National Staff Organization also approved sanctions against the union, noting that its staffers “have been ignored and siloed in a way that makes them feel like nothing more than the hired help rather than a valued component of a team.”
If the Virginia Education Association and its employees truly believe that collective bargaining is a collaborative process in which two sides come together to reach mutually acceptable solutions to problems, then it has a simple way to demonstrate that: Practice what you preach.
A version of this commentary was originally published by The74.
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Train Regulation Threatens to Derail Family Finances in Virginia

Posted on February 19, 2020 by Ross Marchand
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Until recently, the Commonwealth of Virginia was a refuge from the high tax and regulatory boondoggles that have stymied the growth of neighboring states such as Maryland, West Virginia, and North Carolina.

But Virginia’s low-cost gravy train will screech to a halt if reckless regulators and lawmakers in Richmond get their way. House Bill 440, introduced by Virginia Delegate Steve Heretick (D-Norfolk/Portsmouth), would require freight trains to have two-person rail crews as they carry consumer goods through the commonwealth. This misguided proposal, which chugs ahead at full steam toward the State Senate, would hike up the price of products for millions of Virginians and businesses looking to expand. Virginia should get back on the right track and double-down on its low-cost, pro-growth reputation instead of scaring away its residents and companies.

To consumer advocates and industry analysts, a rising tide of red tape can only mean higher prices and fewer choices for households. But lawmakers are often goaded on by “pro-worker” groups railing on about (mostly-imagined) threats to safety and employees’ well-being. Organizations such as the Sheet Metal, Air, Rail and Transportation (SMART) Workers union have been at the forefront of efforts to mandate two-person rail crews in states such as Virginia, claiming that one worker at the helm is a recipe for deadly accidents. SMART Transportation Division president Jeremy Ferguson claims, “The ability of two people to work together and their collected experience helps them to react to unexpected and potentially dangerous situations as they happen, preserving the safety of the crew and others while crossing the country.” This seductive logic has led to dozens of proposals across the country, most recently by Delegate Heretick, to beef up freight staffing levels.

Except there isn’t a shred of evidence to support the idea that more crew members avert rail accidents. In fact, when the Federal Railroad Administration proposed a (now pulled) rule that would mandate two-member crews, it admitted it “cannot provide reliable or conclusive statistical data to suggest whether one-person crew operations are generally safer or less safe than multiple-person crew operations.” Evidence to date shows that equipment and track improvements, as well as automation, are far more important to rail safety than crew size. Mercatus Center senior research fellow Patrick McLaughlin and Regulatory Studies Center research professor Jerry Ellig concluded in a 2016 analysis that declining freight accidents since the seventies is due to deregulation that has allowed companies to invest in key capital improvements.

As the result of increased investment and technological progress, rail systems increasingly rely on computer systems that provide far better oversight than additional humans onboard. According to the results of a 2017 simulation modeling how humans and computer systems handle real-world rail tasks, “the presence of automation with or without the conductor made much more of a difference…than the conductor alone.”

Regardless, regulatory zealots in Virginia and elsewhere won’t let the evidence derail their attempts to institute two-person crews. Policies such as H.B. 440 wouldn’t make Old Dominion any safer, but it would lead to raft of unintended consequences for consumers. Increased rail operation costs mean that suppliers will rely less on trains and increasingly take their products on the road. But trucks have an abysmal safety record in handling dangerous products, regularly spilling products and wreaking considerable havoc.  According to research from the Congressional Research Service, trucks spill around five times more oil than trains per billion-ton miles.

The conclusion is unavoidable: “railroads consistently spill less crude oil per ton-mile transported than other modes of land transportation.” This data should serve as a wakeup call to lawmakers that more rail restrictions would lead to greater death, suffering, and property damage. Easing onerous rules will allow rail operators to focus on computer/technical improvements and test newly installed “positive train control” systems that automatically stop trains in emergency situations. Unlike crew mandates, these improvements will actually save lives.

Virginia lawmakers can retake the initiative as a low-cost, pro-innovation state, instead of committing the state to expensive, unsafe modes of delivery. Richmond can lay the trackwork for a bold path forward, but only if it chooses to reject misguided policies.

A version of this commentary originally appeared in the February 6 issue of The Bull Elephant.  Ross Marchand is the director of policy for the Taxpayers Protection Alliance. 

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Governance Nightmare: Integrating Hospitals and HMOs

Posted on February 19, 2020 by James C. Sherlock
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Delegate Sally Hudson (D-Charlottesville) introduced a terrific piece of legislation this year, HB 1731. Unfortunately, it was killed off in the House Committee on Labor and Commerce, but its worth discussing and working for its revival next year. The bill tackled for the first time an increasing threat to competition, cost, availability, consumer choice and quality of health care in Virginia — the vertically integrated carrier. 
The combination of hospitals and insurance carriers has captured the attention of neither the media nor the political class, but it is a fundamental driver of runaway healthcare costs in Virginia.
To illustrate the impact of vertically integrated carriers in the marketplace, consider Sentara Health’s offering of its Optima HMO plans in Charlottesville and surrounding counties in 2018 — Hudson’s legislative district. Optima was the only carrier that year to offer plans on the Affordable Care Act (Obamacare) marketplace in multiple locations where Sentara had hospitals. The people depending upon the federally administered program found that their only option, Optima, charged the highest plan prices in the United States.
A 40-year-old couple with two kids had to pay $40,000 in premiums for a Silver Plan. Plus they were liable for up to $11.700 in co-pays and deductibles. Sentara Martha Jefferson Hospital was included in the network. The University of Virginia Medical Center was not. All in the family. Similar scenes played out in other areas of Virginia where Sentara had hospitals and Optima was the only ACA seller.
According to Virginia Health Information, Optima had an amazing year in 2018.  Enrollees increased 10 percent, premiums earned jumped 60%, average monthly premiums rose 30%. Profits increased 890% to $139 million. Sentara Martha Jefferson reported operating income of $28.8 million in 2018 and a profit margin of 11.6%.
The majority of Optima’s ACA members in 2018 had premiums subsidized by the federal government. You’d think the federal government might get cranky. But so far it’s done little.
If enacted, Hudson’s bill would have addressed the market power of vertically integrated carriers, which she defines as carriers that own, are owned by, or are under common ownership with an entity that also owns or operates acute-care hospital facilities in the Commonwealth. The bill would bar such carriers from discriminating against competing healthcare providers either in terms of reimbursement for professional services or membership in provider networks.
Hospital systems in Virginia’s five largest metro areas either own their own health plans and insurers or have joined exclusive partnerships with one.
The vertically integrated healthcare systems with captive carriers are the aforementioned Sentara Health/Optima Health, Centra Health/Piedmont Community Health Plan and VCU Health/Virginia Premier. (Yes, the state controls a commercial health plan, at least temporarily). To complicate the issue, the state has awarded $5 billion in annual Medicaid managed-care contracts to Optima and Virginia Premier — yes, DMAS gave federal money to another state agency – who together manage the care of nearly half of Virginia’s Medicaid patients. Now, Optima has a proposal before the State Corporation Commission to buy 80% of Virginia Premier. Perhaps readers can see a pattern. 

Legal issues

The two partnerships are Inova and Aetna in Northern Virginia (Innovation Health) and Carilion and Aetna in Roanoke (Aetna Whole Health). Unavoidable legal issues arise from enterprises that control both providers and carriers including:
▪       Risks from failure to act in the best interests of HMO enrollees;
▪       Antitrust risks from anticompetitive actions against other providers and insurers;
▪       Fiduciary risks for corporate directors.
When the vertical integration includes a combination of non-profit and for-profit organizations, as with Sentara Health, the conflicts are even more profound. Virginia provides zero oversight to ensure that “non-profit public charity” healthcare systems pay balanced attention to their charitable missions, their business missions and their licensed missions.  Internal transfers of hundreds of millions of dollars annually among subsidiaries and between subsidiaries and parent companies should bring direct scrutiny of tax authorities.
The missions, fiduciary obligations, licensure obligations and business imperatives of healthcare providers and insurers/HMOs are distinct and often in direct conflict.
Single-point control of both providers and insurers directly pressures the obligations of captive insurers. Carriers are required to represent only the interests of themselves and their members when negotiating with providers on prices and access to their care networks. Vertically integrated health systems make those decisions internally, making state oversight very hard to exercise.
Another issue is patient referrals.  The Virginia Attorney General concluded almost 30 years ago that Virginia statutes and court decisions “allow a hospital to employ a physician as long as the employment agreement authorizes the physician to exercise control over the diagnosis and treatment of the patient, the physician’s professional judgment is not improperly influenced by commercial or lay concerns, and the physician-patient relationship is not altered”[1].
Both federal anti-kickback statutes and the Stark Law attempt to control misuse of referrals. Yet multiple studies since show that the creation of a vertically integrated provider causes referrals to competing practices to plunge. An investigation by the current AG would reveal whether pressure is put on physicians employed by these systems to refer within the system.
Finally, tension exists between overlapping boards and duties of each board and member. Sentara Hospitals and Optima Health have conflicts in business goals and their fiduciary and licensing obligations. IRS 990 forms show that the CEO of Sentara Health, the parent company, was a member of the Sentara Health board and chaired both the Sentara Hospitals and Optima Health boards.  The board of the parent company reports to no one and selects its own successor members. 

Recommendations 

General Assembly and Governor:
▪       Assign the State Corporation Commission to oversee the business activities of large and vertically integrated healthcare nonprofits. They can read the Forms 990 collected from Virginia’s multi-billion dollar non-profit health systems that are collecting dust somewhere.
▪       Review the Virginia’s Nonstock Corporation Act to determine whether it needs to be updated to deal with these issues.
▪       Reintroduce and amend HB 1731 to bar actions discriminating against competing insurers or health plans.
▪       Ban vertically integrated carriers.
Attorney General:
▪       Enforce the Virginia Antitrust Act.
Everyone else:
HB 1731 was an excellent bill with no state budget impact.  Call your General Assembly members and tell them to bring it back next year.
A version of this commentary was originally published in the January 27 edition of the online Bacon’s Rebellion.
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Will General Assembly Decide on Carbon Car Tax?

Posted on February 5, 2020 by Stephen D. Haner
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Thanks to the persistence of Delegate Charles Poindexter, two members of Governor Ralph Northam’s cabinet are now on record stating the General Assembly will decide whether Virginia joins the carbon tax regime called the Transportation and Climate Initiative.  In 2018 both of them had signed a letter endorsing the interstate compact to reduce the use of gasoline and diesel fuel for transportation.

The Franklin County Republican was addressed by Secretary of Natural Resources Matt Strickler in a meeting of a House Labor and Commerce Committee subcommittee January 30, and Strickler dismissed Poindexter’s use of the word rationing to describe TCI. “I’m not sure where the idea of rationing comes from.  I think that’s pretty hyperbolic language,” he scoffed.

“The idea of rationing” came from TCI’s own framework document issued in October and draft memorandum of understanding released December 17, which explicitly describe plans to reduce the amount of fuel available year after year after year (leaving the rate of decline to be determined).  The word rationing, or restricting the consumption of a commodity, exactly describes what TCI will do to fuel.

The organizers also reported that to achieve a 25% reduction of fuel use in the regional compact’s territory, fuel wholesalers would face carbon allowance costs that would be the equivalent of another 17 cents on the gas tax.  “I’m not familiar with that those studies” was Strickler’s response in another forum where that came up.

Poindexter next asked Secretary of Transportation Shannon Valentine about TCI on February 3, during a meeting of the House Finance Committee that was considering Northam’s multi-billion-dollar transportation funding package.  Given that the governor seeks to raise taxes on fuel for roads, rail and transit, it was fair to ask about any future plans to then rapidly shrink use of those fuels, and the taxes they generate.

Valentine responded TCI is merely “a willingness to explore options on how we could be more deliberate in our environmental stewardship.”  The state would have to join a multi-state agreement yet to be written, and “you all would have an opportunity to weigh in before that would ever happen.”

This proposed tax and rationing scheme for fossil fuels is an inconvenient talking point as Northam pushes forward with the largest transportation tax increase in the Commonwealth’s history.  His bill would almost double the existing motor fuel tax, from 16 to 28 cents.  In three parts of Virginia – Hampton Roads, Northern Virginia and the I-81 Corridor – an additional 7.6 cents is now assessed, so the gasoline tax there would rise to almost 36 cents per gallon.

Yet another pending bill, approved in the Senate Finance and Appropriations Committee February 4 – turns that regional tax into a statewide levy of at least 6 cents more in every jurisdiction not yet hit with a regional tax.  With the state growing in dependence on fuel taxes, the imposition and success of TCI over coming decades will once again erode that revenue.

But the Northam Administration and its environmental allies clearly want to avoid that discussion at this time.  No decisions have been made on TCI, Stricker said January 30, and in the earlier discussion.  “It’s a conversation, it’s not a regulation, not something that is binding on the Commonwealth, it is something that is being considered,” he said.

Yet, Strickler had come to that committee that night to kill a bill introduced by Poindexter.  His House Bill 1629, eventually defeated by the majority Democrats on the committee, sought exactly what Strickler and Valentine said is a given:  A final decision on TCI made solely by the legislature.  After Strickler downplayed the significance of TCI, a series of environmental group lobbyists went to the podium to praise it as an environmental boon and speak against Poindexter’s bill.

This is coming, Virginia.  Once the 2020 gas tax bill is passed and signed, attention will turn to TCI.  Fuel taxes in excess of 50 cents per gallon may be only a couple of years away.  It won’t be the first Virginia carbon tax, after all.

The same subcommittee that night confirmed Virginia’s participation in the related Regional Greenhouse Gas Initiative, a compact that includes most of the same states, from Virginia to Maine.  It imposes a carbon tax on all the fossil fuels (coal, natural gas, biomass) used to generate electricity in Virginia.  House Bill 981, not yet considered on the full House floor, directs how those carbon tax dollars will be spent one they start to flow later this year.

Half of the money will be given to the Department of Housing and Community Development to spend on “low-income energy efficiency programs” and 45% to the Virginia Community Flood Preparedness Fund, successor and an expansion upon the previous Virginia Shoreline Resiliency Fund.  Apparently inland floor mitigation projects will also be eligible.  How much money is expected?  The bill was not accompanied by a fiscal impact statement, and nobody asked.

When the Transportation and Climate Initiative kicks in, and if the other states stand firm Virginia is likely to be among them, a similar and probably larger annual stream of revenue will be produced for other environmental-related spending, or for investment in non-fossil fuel vehicles.  That alone will produce immense pressure on the 2021 General Assembly to adopt it.


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