Weekly Column: The Session Ends with Last Minute State Pension Deal

This column below was my weekly column that appeared in the Mount Vernon Gazette, Mt. Vernon Voice and Patch in their March 15, 2012 editions:

The Session Ends with Last Minute State Pension Deal

Although we still did not pass a budget, the last week of session was an eventful week.

We considered over 1,600 bills this session.  I have written a more thorough summary of about 40 highlighted bills on my blog – The Dixie Pig – which you can read at scottsurovell.blogspot.com.
We passed the most important legislation last at about 9:45 p.m. on Saturday night.  This legislation restructures the Virginia Retirement System (VRS) and reorients local government responsibilities to VRS.  Many local governments, including Fairfax County Public Schools, most public universities, counties, and towns, buy into VRS because it is more efficient than running their own retirement plan.


VRS current has a $24-27 billion unfunded liability – an amount equal to about two-thirds of the annual General Fund.  This is because the legislature has refused to contribute the monies requested by the plan trustees about 90% of the time over the last 20 years including 2010-2011 when we appropriated $0.  Plus, the stock market has barely moved over the last 10 years notwithstanding gains over the last three years.


The bill’s conferees announced an agreement on VRS around 4:00 p.m. on the last day of session (Saturday).  The House Democratic member of the conference committee was excluded from the negotiations so he could not tell us what was in the bill.  We were given a six-page twenty-minute Powerpoint briefing on the bill around 6:00 p.m.  The Senate voted the bills through around 7:30 p.m.


We were handled still warm copies of the 90-page bill at 8:20 p.m. while on the floor debating other legislation and debate started at 9:00 p.m.  None of the affected 579 political subunits, including Fairfax County, had an opportunity to vet the legislation before we voted on it.  None of the affected employee groups – teachers, college professors, local government workers – were given a chance to provide feedback.


Generally speaking, the legislation required participating local governments to force their employees to pay a 5% contribution and give them a 5% raise.  It also created a new “hybrid” retirement plan that reduced the pension benefits, but allows workers to pay into a 401(k) style plan.


The bill passed on a party-line vote in the House with a handful of Republicans crossing over.  The Senate approved the bill 34-6. Both myself and Senator Puller voted “no” to all of the changes.  I voted “no” for a variety of reasons including the way the negotiations were handled and the lack of transparency or public input.  This bill affects the benefits of thousands of people, has billions of dollars of consequences, and we had about twenty minutes to read it.


Also, the legislature created this unfunded liability and we should take the necessary steps to fund it.  Asking the employees to pay for the state’s failure to fund their pension is like asking the victim to pay for crime.  This is also a massive unfunded liability – Fairfax County Public Schools estimates at least $15 million.  You will see the bill for this in your property taxes.  Virginia’s pension also really helps us hire and retain top notch teachers.  We are losing a competitive advantage over Montgomery County and others by reducing our benefits.  [See my floor speech below]


We were also handed a last minute compromise on the Governor’s Transportation bill.  The final product had virtually no new revenue except naming of overpasses – e.g. U.S. 1 Taco Bell Bridge – which is expected to bring in about $20 million a year (about 0.25% of the cost to widen U.S. 1).  I voted “no” and the bill deadlocked 20-20 in the Senate before the Lieutenant Governor broke the tie.   We are still waiting for real progress on transportation.


The Budget negotiations will continue over the next few weeks.  A pro forma special session is scheduled for March 21 to restart the budget negotiations.  We will hopefully approve a final budget some time after that and the “Veto Session” is scheduled for April 18, 2011. 


I will continue to write articles over the next few months regarding some of the legislation we voted on so you can understand my positions and how it affects our community.  In the meantime, feel free to shoot me an email if you have any questions at scottsurovell@gmail.com.


It is an honor to serve as your delegate.