Equal Access for Teachers?

Posted on February 7, 2019 by matt ohern
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Should Virginia teachers have equal access to any legitimate employee association offering professional support, insurance and other benefits, so they can find the best deal for their money?

Legislation introduced by Senator William DeSteph would give non-profit Virginia teacher associations an equal opportunity to make their pitch to teachers in every school division.  It would end the practice in many school systems of providing monopoly access to politicized employee associations, notably the Virginia Education Association.

The issue is no trivial matter – not for the associations nor, especially, for the employees.   In a litigious world, teachers – who regularly interact with underage minors, parents, colleagues, and powerful administrators – are especially in need of professional support and liability insurance providing legal protection.  It is something they never want to use but know they need to have.

There are three teacher organizations providing broad-based member insurance in Virginia:  The Virginia Education Association (VEA), the American Federation of Teachers (AFT), and Virginia Professional Educators (VPE).  

The first two are unions; the third is not, and therein lies the difference.  The AFT and VEA have local units; both engage heavily in political activity; both send a large portion of their dues money to the national union.

VPE, on the other hand, doesn’t add dues to support another layer of infrastructure at either the local or national level.  Nor does it spend funds on political activity.

The result is that VPE’s dues are only $180 a year – about $300-$400 less than the two unions.

This allows VPE to make a financial case to prospective members:  Saving $300 a year is like receiving a pay raise of nearly a half percent more, each and every year.

Just as important is the freedom from politics.  Both the NEA and AFT are known as political extensions of the Democratic Party.  As an example, of 289 candidates for Congress endorsed by the NEA last year, only 10, or 3.4 percent, were Republican.  In Virginia, the odds are a little better: a whopping 12 percent of their endorsed candidates for General Assembly were Republican in 2017.  

Yet, a Fall 2017 Education Week Research Center poll demonstrated that 27 percent of teachers considered themselves Republican, and that while half of teachers reported voting for Hillary Clinton, half did not:  29 percent voted for Donald Trump, 13 percent voted for a third-party candidate and eight percent did not vote at all.

The mantra of “less cost, without the politics” is an attractive one to many and is one reason VPE is now the second largest teacher association in Virginia.  This appears to unnerve the largest one.

Prospective employee associations are best able to approach prospective members if they are able to do things like set up tables at new employee orientations, or have access to teacher mailboxes at school or teacher email addresses.

In what can only be described as collusion to maintain a limited marketplace, many school superintendents, school boards and VEA leaders work in concert to block out competition.

In Virginia Beach, when equal access was just too much for the VEA to bear, it became (according to the VEA daily blog) “a local issue the Virginia Beach Education Association faced and fought off” … the school board change the rules to give access only to those who have a local organization – which would force the VPE to create the very bureaucracy they seek to avoid.  

In another city with nearly 1400 teachers, the HR Department gave permission for VPE to leave personalized material in each teacher’s mailbox only to be told after printing and distributing it to every school that “the new Superintendent doesn’t want to anger the VEA, so the permission is withdrawn.”  These expensive materials were now wasted.

It is a frequent comment.  In a state whose forebears declared their independence partly over a forced monopolistic trade with England, the most frequent refrain is “The current teachers’ union would be upset if we let in someone else.”  In other words: Don’t rock the boat, by ensuring a monopoly.

DeSteph’s bill, which passed the State Senate, requires local school divisions to provide equal access:  If one teacher association is allowed to have a table at new employee orientations, all will. If one teacher association is given access to teacher mailboxes or teacher email address, all must.  If one is denied, all must be denied. It would put all employee groups on an even playing field.

Which has sent the VEA into paroxysms of anguish.  To them, DeSteph’s bill is unfair precisely because it would a) put employee groups on a level playing field and b) tell local school boards and superintendents they have to be fair in the way they treat their employee organizations.  

Their arguments do not include what’s best for teachers … possibly because what is best for teachers would be having the right to save money by using a less expensive insurance plan.  Nor should any teacher be forced to have their membership dues used to support candidates or political agendas which violate their own personal beliefs or political preferences. What’s best for teachers is not always in the best interests of the union.

“To govern is to choose,” said British politician Nigel Lawson.  Legislators voting on this bill will be choosing: To side with teachers seeking a less expensive alternative? Or with union leaders granted a near-monopoly by many school systems at taxpayer expense?   For equal access? Or for protectorates that block out competition?

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Facts? We Don't Need No More Stinking Facts!

Posted on February 7, 2019 by matt ohern
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As Donald Rumsfeld famously said of the Iraq War, there are known unknowns and unknown unknowns — things we know we don’t know, and things we don’t have a clue we don’t know. The same thing could be said of Governor Ralph Northam’s now-infamous medical school yearbook photo of a young man in black face and another in KKK attire — either one of whom, or neither, may be Northam himself.

Northam told the nation in a press conference that he believes he was not in the photo, and he doesn’t know how the photo came to appear on his personal page in the yearbook. No one appears to be paying much attention to his denial, which conflicted with an earlier apology and was undercut by his own admission in the press conference that he had appeared in black face during a Michael Jackson dance contest — in other words, that he’d dressed in black face, just not in the particular photo in question.

Democrats made up their minds about Northam’s irredeemable guilt even before the press conference. Almost every conceivable Democrat-affiliated group from the Democratic National Committee to the Virginia League of Democratic Dogcatchers has demanded his resignation. Republicans, only too happy to kneecap a Democratic governor, have called for the same.

Here’s what’s extraordinary about the episode: No one seems terribly interested in finding out if Northam’s version of events holds water. With minds already made up and political commitments made, no one is thinking about what we know, what we don’t, and what entirely unexpected evidence might be lurking out there. In another moment in our political history, people might say, “Yeah, this sure looks bad, but Northam says he’s innocent, so let’s sort through the facts.” What we hear now is, “Facts? We don’t need no more stinking facts. We’ve got all the facts we need.”
Here are some questions that occur to me. I’m sure others could add to the list.

Coonman. Northam was known at Virginia Military Institute by the nicknames of Goose and “Coon man.” Based on the fact that the word “coon” is a pejorative for African-Americans, many observers have assumed that the nickname strengthens the case that Northam was racist. And perhaps it does. But “coon” is also short for “raccoon.” A breed of hunting dog used in hunting raccoons is known as “coon hound.” It is not self-evidently obvious that “coonman” has a racist meaning. It could just as well have a hunting connotation, or some other origin we can’t even guess. Northam said he didn’t know the derivation of the nickname, but attributed its use to two older VMI classmates. The question could be readily settled if the classmates could be identified and queried. What did they mean by the name? Did Northam understand and accept that meaning? Rather than assume a racist meaning shouldn’t someone look into this?

Who’s in that yearbook photo? The identity of the figures in the offending photo are impossible to identify. Northam insists that neither man is him. Is there any proof to suggest otherwise? If there is, let’s hear it.

Who submitted the yearbook photo? Let’s posit for purposes of argument that Northam was not in the photo. Who submitted it to the yearbook for publication? Northam did not address the issue directly. He said plausibly that he never acquired a copy of the yearbook and had never seen the photo before it was recently brought to his attention. I haven’t seen his detractors address the issue either. Could someone else have submitted or inserted the photo as a prank? To draw a firm conclusion, it would be exceedingly helpful to know what the protocols were in the mid-1980s for selecting photos for the Eastern Virginia Medical School (EVMS) yearbook. EVMS, it appears, is in the process of doing that. Ideally, the school will track down the original editors of the yearbook and they will shed light on the circumstances.

Whether we’ll get honest answers from potential witnesses is another matter. In the current rush to judgment, any witness offering information that might exonerate Northam surely would weigh the potential consequences — being subjected to the furies of the Twitter Outrage Mob. Regardless, the effort should be made.

I don’t know what the result would be if we managed to surface all the relevant facts and testimony. A full picture might confirm Northam’s version of events, in which case we’d be debating if it was racist to don blackface in a Michael Jackson dance contest — very different from appearing in a photo next to someone in a KKK hood. Or a complete picture might shred Northam’s version, in which case the only question worth asking is if someone deserves forgiveness if the intervening 34 years had been spotless.

(This article originally appeared in Bacon’s Rebellion on Feb. 4, 2019)

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Innovation and Customer Service in P3 Toll Projects

Posted on February 7, 2019 by matt ohern
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(Editor’s Note: With public-private partnerships and tolling all under consideration for improving I-81, extending I-495 to Maryland, and extending I-95 south to Fredericksburg, Mr. Feigenbaum’s commentary is especially timely)

Using a public-private partnership (P3) to design, build, finance, operate, and maintain a highway has at least five potential advantages compared with the traditional DOT approach. P3s deliver needed infrastructure sooner; they raise large new sources of capital; and P3s shift risks from taxpayers to investors. But the biggest advantages may be two others: P3s lead to innovations that a government agency may not have considered, and P3s provide better customer service through a more customer-centric approach.

State DOTs view travelers as “users”; the user pays roadway taxes or tolls and the DOT builds and maintains roads. Since a DOT has no natural competitor it does not need to provide exemplary customer service, merely service that is good enough. Without competition, a DOT is also not as focused on reducing costs via alternative technical concepts.

The private sector takes a different approach to building and operating roadways. Motivated by profit and accustomed to competition, private operators are used to innovating to please their customers. Transurban and Cintra, both P3 express toll lane developer/operators, show how the private sector is providing better customer service and more innovation.

Transurban sends out regular e-mail updates to its customers. Far more than marketing, the updates provide useful travel information. One e-mail focused on their expanded website, offering new services. Customers without an E-ZPass can make a payment online in lieu of receiving a violation notice. Travelers can determine the cost of their trip before they use the express lanes. Potential customers can learn how the express lanes work before using them for the first time. And travelers can find out about new roadway projects.

Another e-mail announced the opening of a new connector road in northern Virginia, the Jones Bridge Connector, allowing access from VA 123. This new access provides easier connections from shopping areas in Tysons Corner. It also allows customers exiting at SR 123 to use the express lanes. Previously, customers would have to use the general purpose lanes for this exit.

Consider how these e-mails improve the travel experience. Paying a toll online allows drivers from non-E-ZPass states to use the express lanes. Internet payments do include a small service charge but that is a much better option than receiving a violation notice. Determining the cost of a trip ahead of time allows customers to choose their route before they reach the express lanes, avoiding a last-minute decision in the midst of traffic.

E-mailing customers about a new exit is also helpful. Instead of stumbling upon the new exit on their own, customers can study it on a map. They can enter travel information into a map feature such as Google Maps to see how the new exit would improve their travel.

Transurban also made use of alternative technical concepts to reduce the I-495 Capital Beltway express lanes construction costs by 25 percent. Examples include building less-wide shoulders and using pylon separators instead of concrete barriers. These lower costs helped make the project financeable largely by toll revenues, enabling it to be constructed at least 10 years earlier that if the state had built it.

Cintra has made extensive use of alternative technical concepts in building various parts of the LBJ Express Lanes (Dallas) and North Tarrant Express (Fort Worth). TxDOT’s original plan for the North Tarrant Express Segments 1 and 2W with both general purpose lanes and express toll lanes faced a 10-year delay due to a lack of funding. To build it sooner, Cintra proposed and TxDOT agreed to defer the construction of the third GP lane in segment 1 and the third express lane in section 2. The company will build these new lanes when traffic conditions warrant.

The express toll lanes on the subsequent North Tarrant Segment 3 also benefited from innovative thinking. TxDOT’s original plan ended the express lanes at the I-35W/SH 121 interchange and did not include a connection between the highway and I-30. As a result, the project had a limited effect on traffic congestion. Cintra proposed extending the express lanes south of SH 121 to I-30 and providing a direct connector between the express lanes and I-30 east. Modeling showed these small improvements significantly reduced congestion.

Cintra also engaged in innovative thinking for the LBJ Express Lanes. Due to right-of-way limitations, the express lanes could not be built at grade level. TxDOT had proposed a bored tunnel beneath the freeway, but after consulting with TxDOT, Cintra decided to depress the express lanes below grade and rebuild the GP lanes cantilevered over the express lanes. Cintra was also concerned about four different travel levels for the LBJ project. By redesigning the ramps, the company was able to eliminate one level, reducing the cost and complexity of the project.

Other private toll companies have also introduced key innovations. The private company that developed the world’s first express toll lanes, on SR 91 in Orange County, CA, pioneered variable pricing that increases or reduces tolls based on demand. They also pioneered all-electronic tolling, which became standard on all future express toll projects nationwide.

Using P3s to build and operate highways includes many advantages such as tapping new sources of capital and shifting risk. Better customer service and design innovations might not be top of mind when researchers analyze P3s. But they can be two of the most important advantages of private sector construction and operation.

(This column originally appeared in the January 10, 2019 edition of Surface Transportation Newsletter.)

Baruch Feigenbaum Email this author

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Love the Middle Class? Index Virginia’s Taxes!

Posted on January 23, 2019 by matt ohern
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Virginia’s most effective tax collector is inflation.

Virginia’s long refusal to adjust any element of its income tax for slow but constant inflation means that each year, a slightly higher percentage of your growing income is taxed, and the rising costs of living shrink the value of the standard deduction and push more of your income into the top tax bracket.

In 1990 Virginia’s income tax looked like it does today – an $800 personal exemption, a $3,000 standard deduction for a single taxpayer, and income above $17,000 was taxed at the maximum rate of 5.75 percent.

Had the 1990 tax code also included a provision to adjust those amounts annually for inflation, today the personal exemption would be $1,578, the individual standard deduction $5,916 and the top tax rate would not kick in until $33,524.   The higher personal exemption and standard deduction combined would eliminate the tax bite on almost $9,000 income for a family of four – saving over $500.

Those figures come from a simple on-line calculator, with the baseline of January 1990 and the amounts adjusted to December 2018, a period of about 97 percent inflation.   Call it indexing, call it a cost of living adjustment, the bottom line is the same.  Such annual adjustments are widespread in the economy, and the federal tax system adjusts annually.

In 1990, the federal personal exemption was $2,050 and by 2017 that had risen to $4,050.  The 1990 federal standard deduction was $5,450 and was $12,700 in 2017.  That’s indexing at work.

The Virginia General Assembly has consistently refused to recognize the impact of inflation on our tax code, doing the most damage to those working middle class families who dominate campaign rhetoric.

It has another chance during the 2019 debate over how to respond to recent changes in the federal tax system, which are producing a $600 million or more annual boost in state revenue.  Several pending bills pick up on a Thomas Jefferson Institute for Public Policy call to start indexing in 2020, with the next state budget cycle.  They would use the same measure used by the federal IRS.

Those bills would also make one of the key inflation adjustments immediately, a 100 percent increase in the standard deduction to $6,000 per person or $12,000 per couple.  Technically, that is just the 1990 amount adjusted for inflation.  A failure of the legislature to at least do that, to make that one fair adjustment, would be hard to explain given this opportunity.

But the beauty of slow and steady inflation, to the Tax Man anyway, is most people don’t notice it.   These aren’t the days of the 1970s, with double digit annual price increases.  And the most politically-aware and connected taxpayers have a strong protection against the erosive power of inflation – they take itemized deductions.

When inflation increases their home value and local tax bill, when they buy a new house (or second house) and get a larger mortgage or buy a new car and get a larger car tax bill, the tax system subsidizes those costs.  They get some of it back by deducting it off their state tax bill.  If they have high medical costs, again, those can produce some tax savings.  Since 1990 most of those people have seen those costs and other costs rise, but the tax code has shielded the full impact.

Not so people taking the standard deduction.  They pay higher rents than in 1990 (with their landlords deducting taxes and interest), they also pay higher car tax and medical costs, but the state standard deduction today is worth half what it was in 1990.  Half.  It will continue to drop in real value if nothing is done.

Protecting people who take itemized deductions, especially people who pay the highest local real estate and car taxes, is an incredibly important priority to a short-sighted group of Virginia legislators.  We sort the members of the General Assembly by party, gender, and note which have rural and urban districts.  Perhaps we should also ask all 140 which way they do their taxes:  using Virginia’s frozen and eroded standard deduction, or using the itemized method which protects them from inflation?

Itemized deductions with their automatic inflation protection show how the tax code is written by the well-off to benefit the well-off.  The federally-driven economic safety net system for low-income families is also adjusted for inflation, including the Earned Income Tax Credit grant program that Governor Ralph Northam is promoting.

Will the General Assembly leave town without giving the same protections to everybody in the middle?

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Bristol’s Newest Savior: a Proposed Casino and Resort

Posted on January 23, 2019 by matt ohern
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The City of Bristol, having mortgaged its future with a failed mall development project, is betting on another big-ticket project: a proposed $150 million casino with accompanying hotels, conference center, retail, and restaurants built at the failed mall location. The backers assert that the Bristol Resort and Casino would create an estimated 2,000 jobs initially, growing to 5,000 eventually, and paying an average salary of $46,000. The project would generate $30 million annual tax revenue for the hard-pressed locality.

All the backers need is for the General Assembly to rescind its ban on casino gambling in Virginia.

Normally, I would be highly skeptical of a project like this. When developers spin a fantasy vision of jobs and tax revenues, there’s always a hook — all they need is a little support from government. Loans, subsidies, loan guarantees, whatever. But in this case, the Bristol casino backers are funding the project themselves.

“Not one dollar is coming from the city of Bristol, the state of Virginia or the federal government. Clyde and myself are going to put all the money up for this,” James W. McGlothlin told the Bristol Herald Courier last September in announcing the project. By Clyde, he was referring to Clyde Stacy, a former high school classmate, fellow coal baron, and Southwest Virginia business leader.

If McGlothlin is behind the project, it has credibility. McGlothlin, founder of the United Companies, made his first fortune cobbling together non-union coal properties during the great coal boom of 1974. I got to know him in the early 1980s when I covered the coal industry for the Roanoke Times & World-News. During a succession of strikes by the United Mine Workers of America, United kept its mines open in the face of widespread picketing and violence. Actively engaged in Virginia politics at the time — an era when coal industry entrepreneurs had loads of money and carried clout in Richmond — McGlothlin was a major campaign donor. As the economics of the coal industry deteriorated, as I recall, United sold its coal industry interests. McGlothlin expanded his fortune by diversifying into natural gas and golf course development, among other interests.

As his business interests changed, McGlothlin became less involved in Virginia politics. But the College of William & Mary Law School graduate has given large gifts to his alma mater, and he and his wife donated a large art collection to the Virginia Museum of Fine Arts along with funds to build an expansion. Unlike many successful entrepreneurs who made their money in coal and retired to Florida, taking their money with them, McGlothlin has stayed committed to Southwest Virginia.

“Clyde and I were talking one day, and he told me about this concept. He said a casino, and I thought how hard this will be to do — but it immediately flashed in both our minds what it would do for the city and the area,” McGlothlin told the Herald-Courier.

He cited recent industry closings, low wages, limited job opportunities, the depressed economy of much of Southwest Virginia and an ever-growing need.

“It would solve our problems. It’s overwhelming how the match of the need coincides perfectly with something like the casino,” McGlothlin said.

Tax revenue from the casino, he said, “would be like manna from heaven.”

If there’s a catch, it’s that there is a narrow window of opportunity, and the General Assembly must act quickly. A market exists for only one casino in this part of Virginia, Kentucky, and Tennessee, so the first mover wins. “If somebody opens a casino in Kentucky or Tennessee, then I think our opportunity evaporates,” Stacy told the Herald Courier. And it so happens that a group called Raven Rock Entertainment has entered into an agreement with the city of Jenkins, Ky, to locate a 150,000-square-foot gaming area and 300-room hotel near the Virginia border. That project, like Bristol’s, requires an act from the Kentucky legislature.

It all sounds wonderful. And if the proposal had come from anyone other than McGlothlin, who knows a hell of a lot more about business than I do, I would be mercilessly skeptical.

First there is the question of market demand. The United States is crawling with casinos. There is endless competition. No one from outside the central Appalachian region is going to choose a Bristol casino, located in a former mall development, as a resort destination. Business will come from residents within easy traveling distance of Bristol. I’m dubious that there are enough gamblers with enough disposable income to keep a Bristol Resort and Casino going. But, then, McGlothlin has conducted the marketing studies, and I haven’t, and he’s got skin in the game, and I don’t.

Second, there is the question of tax revenues and job creation. McGlothlin and Stacy hired Richmond-based Chmura Economics & Analytics, which found that the casino-resort complex could generate an economic impact of $1.5 billion annually and 10,500 direct and indirect jobs, would contribute $70 million in state and local tax revenue, and would save the state an additional $48 million due to lower unemployment insurance and other aid programs.

I expect the jobs number includes not only casino jobs but jobs in hotels, the conference center, stores, and restaurants — plus jobs created as the payroll of newly employed workers and contractors circulates through the economy. Here’s what I don’t know: If most patrons of the casino/resort are local, to what degree will the new facility cannibalize expenditures on other forms of entertainment, other stores, other restaurants, and other meeting venues? If the project creates 10,500 direct and indirect jobs, how many direct and indirect jobs, not to mention taxes, would it siphon away from other businesses? The City of Bristol might benefit, but to what extent would other jurisdictions in Central Appalachia suffer?

As long as McGlothlin and Stacy are investing their own money, I don’t think it matters that their investment would redirect the geographic flow of local entertainment dollars. That’s the free market system. That’s creative destruction. But when we evaluate the pros and cons of Virginia gambling legislation, let’s make sure we’re looking at the net benefit to Bristol and Virginia.

This column originally appeared in the January 10, 2019 issue of Bacon’s Rebellion. Jim Bacon is editor and publisher of Bacon’s Rebellion and may be reached at jabacon@baconsrebellion.com.

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