Study criticizes state for pension practices

Shortchanging contributions a ‘troubling pattern’

Virginia’s retirement system needs to improve how it manages its long-term pension liabilities, according to a recently released study by the Pew Center on the States.

Overall, the state has funded 84 percent of its total pension bill. The state’s pension plan, however, looked as good as it did in part because the research by the Pew Center lumped all of Virginia’s plans together for analysis. Virginia’s plans include not only the state employee plan, but the plans of more than 500 political subdivisions, as well as the plans for teachers, state police, state law enforcement officers (such as corrections officers) and judges. The plans for the political subdivisions have a higher funded status than the other plans, and “helped save the state,” according to a presentation at the Virginia Retirement System’s Board of Trustees meeting on Feb. 12.

Of the 50 states, 16 were ranked as “solid performers; 15 (including Virginia) as “needs improvement,” and 19 as having “serious concerns.” Nationwide, the Pew Center said there was a $1 trillion dollar gap between what states have promised in retirement and health care benefits, and what they actually have on hand to pay for those benefits.
The states’ situation is worse than what was presented because the study did not include the economic downturn in the second half of 2008 and in 2009.

Several states undertook reform efforts over the last several years, including keeping up with funding requirements, reducing benefits or increasing the retirement age, sharing the risk with employees, increasing employee contribution, and improving governance oversight.

The report predicted that more states would undertake reform efforts in 2010, due to the persistent recession that devastated pension holdings. Virginia is among those states. The legislature is considering a bill that that would reduce benefits, raise the retirement age and require state employees to pay a portion of their retirement contribution. The legislation, HB 1189, applies only to employees hired after July 1. It has passed both bodies in different forms, but legislators are expected to reach consensus on the overhaul.

The report attributes the $1 trillion gap to a failure by the states to make annual payments at the levels recommended by their actuaries, expanding benefits and offering cost-of-living increases without determining how to pay for those benefits, and providing retiree health care without adequate funding. The report notes that Virginia “has a troubling pattern of not paying its annual required pension contribution in recent years.”

A 2008 report by the Joint Legislative Audit and Review Commission found that contributions to VRS plans have been lower than the board certified rate in 10 of the last 18 years. That statistic does not apply to the plans of political subdivisions, however, which pay the contribution rate certified by the VRS board. The state, however, pays the rates set by the General Assembly.
A complete copy of the report is available at www.pewcenteronthestates.org; Virginia’s grade sheet is available at http://bit.ly/dwmCgi. contents

VML submits letter to budget conferees

VML member local governments should contact their General Assembly delegation to reiterate concerns about a number of important budget issues that will be resolved in the coming days.

Twelve House and Senate budget conferees are meeting to resolve changes to the budget that ends June 30, 2010 (HB 29 / SB 29), as well as to adopt a new two-year budget (HB 30 / SB 30) for FY11-FY12. VML delivered a letter to the office of each budget conferee early this morning. It stresses priority issues for local governments that are included in the competing budget proposals. The letter also was sent to the staff members of the respective budget committees.

All General Assembly members need to hear from their local governments, whether or not the legislators are one of the 12 budget conferees. Please communicate these priorities (and any others of concern to your community) to your delegation members as soon as possible.

A copy of VML’s letter follows.

Dear Budget Conferees:

As you work through your differences over the next several days, please remember that local governments also are suffering from the effects of declining revenue sources. The decisions that you make in reaching a budget agreement will affect the quality of life in every city, town and county in the Commonwealth.

The members of VML ask that you take action on the following items:
• The communications sales and use tax is a local, not a state tax. We oppose any efforts by the State to appropriate this local revenue source, and dictate its use.
• State assistance for local police departments should be on a par with assistance for sheriffs departments. The 63 percent of Virginia residents who are protected by local police departments are as deserving of state general fund support as are the 37 percent receiving law enforcement protection from the sheriffs departments.
• We support the fee increase on property/casualty insurance premiums with the proceeds going to critical public safety needs at the local level, as well as other fees that support basic government services.
• Reductions to K-12 education funding should be equitable. We oppose the creation of a block grant to fund at-risk programs. These programs recognize the additional costs of educating children at risk of educational failure, and as such should continue to be distributed on the basis of the number of at-risk students. We support holding localities harmless due to the implementation of the revised composite indexes.
• Policy changes reducing K-12 education funding should be temporary, an approach included in the Senate budget. We also support the temporary relaxation and waiver of class size standards contained in both budgets.
• We oppose the House budget proposal regarding the funding of teacher retirement rates. The process is confusing and will not gain the confidence of taxpayers.
• The state delivers many of its services through local governments. Reductions in state funding for services without meaningful reductions in service requirements do nothing more than shift costs to real estate taxpayers. Please meet your commitments to funding basic services, and avoid shifting costs to local taxpayers.
Finally, we know that you will work to reach a budget agreement in time for adjournment on March 13. If an agreement is not reached by that time, however, local governments would ask that the General Assembly adopt legislation to help us meet our budgetary advertising and adoption requirements. Amending §58.1-3012 in the following manner would address this situation, should it arise:

§58.1-3012. Counties, cities and towns may change rate of tax during calendar year.
The governing body of any county, city or town which levies taxes on real estate, tangible personal property and machinery and tools on a calendar-year basis is authorized and empowered to change the rate of its tax on real estate, tangible personal property and machinery and tools during any calendar year provided such change is made prior to the date on which the personal property and land books are delivered to the treasurer of the applicable county, city or town. provided that the new tax rate does not become effective fewer than 45 days prior to any bill or installment due date.

Thank you for considering our positions.

Sincerely,

R. Michael Amyx

Executive Director
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Local officials welcome at childhood obesity prevention conference

The Virginia Foundation for Healthy Youth (VFHY) and Prevention Connections will sponsor a major childhood obesity prevention conference on May 17-18 in Henrico County.

Inspired by the U.S. Centers for Disease Control and Prevention’s Weight of the Nation conference held last year in Washington, Virginia’s inaugural Weight of the State conference is targeted at community leaders, policymakers, healthcare professionals and educators. It will provide them a setting to forge new state and regional partnerships and collaborations, as well as set an agenda for combating this public health epidemic.

The conference will present the most current data and statistics from a new statewide survey of childhood obesity in Virginia. Presenters will discuss approaches being used in other states and localities, and participants will learn the latest prevention strategies, including: school nutrition programs; innovative physical fitness initiatives; pediatric health care approaches; and delivering prevention messages to young people via social marketing techniques like those employed by successful advertising agencies and corporations.

In the last three decades, childhood obesity has more than tripled in the United States. One out of three children is obese or overweight. In Virginia, where more than 60 percent of the adult population is obese or overweight, it’s much the same story.
Childhood obesity can lead to serious lifelong, health problems such as Type 2 diabetes, high blood pressure and heart disease. Obesity is now one of the two leading causes of preventable death in the U.S., behind tobacco use.
That’s where conference sponsor the Virginia Foundation for Healthy Youth (VFHY) comes in. VFHY is responsible for statewide efforts to reduce and prevent youth tobacco use and childhood obesity. (Conference co-sponsor Prevention Connections is VFHY’s nonprofit, fundraising sister organization.)

Established in 1999 as the Virginia Tobacco Settlement Foundation, VFHY helped cut teen smoking almost in half in Virginia in fewer than 10 years. Because of the foundation’s great success at delivering prevention messages to young people, the General Assembly expanded the foundation’s mission to include childhood obesity prevention and reduction in 2009 and changed the foundation’s name to the Virginia Foundation for Healthy Youth.

Virginia First Lady Maureen McDonnell is the conference’s honorary chair and sponsors include Bon Secours Richmond Health System and American Family Fitness.

Ms. McDonnell helped VFHY formally kick off its childhood obesity prevention mission in January at Virginia Healthy Youth Day, an event to support youth physical fitness, during which 250 schoolchildren exercised on the lawn of the State Capitol.

Conference registration begins on March 15, with an early bird registration fee of $125. More information about the conference may be found at www.preventionconnections.org or www.HealthyYouthVA.org. contents

Deadline for Harvard University innovations award is April 7

Harvard University is soliciting submissions of programs and initiatives for its Innovations in American Government Award.

Administered by the Ash Institute for Democratic Governance and Innovation at Harvard Kennedy School, the Innovations Award is heralded as the premier public-sector award in the nation. It is given annually to programs that serve as examples of creative and effective government at its best.

This year the Innovations program has also launched a new initiative, Bright Ideas, designed to recognize and promote promising government programs and partnerships.

All units of government -- federal, state, local, tribal, and territorial -- from all policy areas are eligible to apply for recognition.

The top winner of the 2010 Innovations Award will receive a $100,000 grant to support replication and dissemination activities. Top finalists also will receive monetary grants.

Applications and additional information for both initiatives are available at: www.innovationsaward.harvard.edu.
The deadline for applications is April 7.

For smart ideas that deliver public value and lower the cost of government services, check out our site Better, Faster, Cheaper: www.bfc.ash.harvard.edu. contents

Proposed Regulation

Virginia Emergency Medical Services. The State Board of Health has proposed regulations that incorporate changes in terminology, testing practices, enforcement, agency responsibilities, certification levels, reporting requirements, and training EMS physician requirements.

Additional proposed changes include adding civil penalties to the enforcement provisions, allowing localities to develop their own emergency response agency standards, requiring a National Crime Information Center background check on affiliated EMS personnel, increasing the required supply count of triage tags, and removing the prohibition on firearms, weapons, and explosives.

Public hearings were held and comment may be submitted until March 19.

For additional information, contact Michael Berg, Department of Health, at 804/864-7615 or at Michael.berg@vdh.virginia.gov. contents

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