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VGEA's
Foresight
October
1996
Ensuring
effective government services to the citizens
of the Commonwealth through a quality workforce.
Ballot
96 Shall the constitution of Virginia
be amended to provide that the funds in the
governmental employees retirement system shall
be trust funds and be invested and administered
solely in the interests of the members and beneficiaries
of the system?
VRS
Fall Referendum Deciding which man
will lead America into the 2Oth Century as President
is not the only decision Virginia voters will
have to make at the polls in November. Voters
statewide will decide on a constitutional change
which would make the Virginia Retirement System
(VRS) an independent trust fund, entirely separate
from other state money, to be used solely for
retirement benefits of employees in the Commonwealth's
political subdivisions and school divisions.
The proposed constitutional amendment relating
to the VRS will be amendment #1 on the ballot.
There will be four other amendments on the November
ballot; however, amendment #1 is the only one
relating to state employees. The wording on
the ballot will appear just as it does above.
VGEA
representatives feel that many Virginians will
read the amendment and not fully understand
the intent of the proposed change. A recent
Virginia Commonwealth University poll revealed
that most Virginia voters polled has no knowledge
or understanding of the issue involving protection
of employee pension funds.
The
VGEA Retiree's Chapter has been focusing on
promoting the amendment's passage and educating
Virginia voters of this beneficial referendum.
VGEA Retirees' Chapter president Lew Brett said,
"voters must understand that this is a positive
change for the Commonwealth. The passage of
the amendment will not increase taxes or employee
benefits - the passage will strengthen pension
benefits by preventing the raiding of those
funds." VGEA urges members to help ensure the
passage of this referendum by educating your
co-workers, friends and neighbors about the
positive benefits that will result.
For
more information on the VRS referendum you may
contact the State Board of Elections: 200 North
9th Street, Room 101, Richmond, Virginia 23219
or phone: (804) 786-6551 or 1-800-552-9745.
Roll-Forward
of Paydates Scheduled to Begin January, 1997
The salary plan passed by the '96 General Assembly
and approved by Governor Allen is scheduled
to begin rolling forward state employees' paydates
in January, 1997. The plan (barring any changes
by the '97 General Assembly or Governor Allen)
will roll-forward paydates during an eight-month
transition period. The salary plan will adjust
state employee salaries 6.43% over the biennium
(this figure comes from compounding one increase
on top of another). The 6.43% increase come
from a combination of across-the-board increases,
a one- step increase and the roll-forward of
the paydates.
Why
did the Commonwealth want to change the paydates?
The reasoning behind the change is to pay state
employees for time actually worked-a concept
embraced by most private companies. The roll-forward
will have state employees receiving only 23
paychecks in 1997 - not 24 (however; gross salary
will remain the same for '96 and '97). What
happens to the 24th paycheck? State employees
will receive that paycheck when they retire
or leave state service (note: this paycheck
will reflect the employees salary at the time
of separation from state service).
There
is no question that the roll-forward of paydates
would be a hardship to many state employees.
You may want to consider:
- Contacting
your senators and delegates to seek support
for VGEA's proposal to move the scheduled
December l, l997 salary increase to July 1,1997.
This would help to ease the financial hardship
which may be experienced during the roll-forward
period.
-
Setting aside the increase you will receive
beginning with your December 16, 1996 paycheck
to help offset the delay in paydates.
-
Changing the amount withheld for federal and
State taxes to increase the net amount of
your pay check to help offset the delay in
paydates. Planning ahead - planning now. Paydates
are scheduled to begin rolling forward in
January, 1997.
- Looking
at your budget before the roll-forward begins.
- Developing
a cash-flow chart. List all income and debt.
- Looking
at all income - consider possible tax refunds
in your budget.
- Taking
advantage of "grace periods" for rent and
mortgages.
- Checking
your due dates on bills.
- Contacting
your creditors and asking for their assistance.
Commonwealth
Competition Council
The
Commonwealth Competition Council was created
in 1995 by the Governor and the General Assembly
to examine and promote privatization, innovation
and competition in providing state government
services. The Code of Virginia defines privatization
as a variety of techniques and activities which
promote more involvement of the private sector
in providing services that have traditionally
been provided by the government.
While
the Council will recommend alternative ways
of providing traditional government services,
state government's ability to protect the health,
safety and welfare of its citizens will not
be diminished by any of its recommendations.
The Council will further suggest ways of minimizing
any adverse impact of privatization upon state
employees.
VGEA
Executive Director Joan Dent spoke on behalf
of state employees at a public hearing held
by the Council earlier this summer. Excerpts
from Dent's speech appear below.
The
Council wants to hear from state employees about
their thoughts and ideas on any of the following
issues:
- What
program, service or initiative state government
should be handled by the private sector? Why?
- Is
there a program, service or initiative could
be done by the private sector: (a) in a more
efficient manner; (b) at less cost to the
taxpayer; (c) that would improve the quality
of service; or (d) all, or a combination of
the above. If so, what is it?
- For
those services that must be provided by state
government, what is your suggestion on how
to make state government more internally efficient
and effective?
- What
issues do you see concerning state government
competition with the private sector?
Please
send your comments to P.O. box 1475, Richmond,
Virginia 23218 or FAX to (804) 786-1594.
Excerpts
from Joan Dent's speech to the Commonwealth
Competition Council
"...VGEA
looks forward to a continuing relationship with
the Council. VGEA offers an overview of what
we see as flaws in the area of state personnel
management. These issues should be addressed
before the Council can successfully move forward,
with the cooperation and support of state employees.
...Without exception, Virginia's employees are
the envy of other states. We are admired for
the stability and professionalism of our workforce.
This professionalism is particularly admired
given the structure of the Virginia Constitution
which limits the Governor's term of office to
four years. This accomplishment is due to the
continuing commitment of the General Assembly
to state employees.
Unfortunately,
in the minds of state employees, all that changed
at the beginning of the current admiration [when
letters were addressed to 500 top management
employees requesting their resignations, then
the announcement by the Governor's Blue Ribbon
Strike Force that the Commonwealth's workforce
needed to be reduced by 16,000 employees]. These
actions did more to reduce productivity than
any other occurrence in recent history.
The
negative consequences of these actions are still
apparent in the attitudes of employees. Downsizing,
outsourcing, privatization and contracting out
without planning and for reasons that are perceived
as political rather than fiscal have led to
an atmosphere of distrust.
Lack
of communication has resulted in the loss of
experienced, knowledgeable and dedicated personnel
and has dramatically affected the motivation
and commitment of the Commonwealth's workforce.
Communicating honestly and directly to all parties
involved will help to improve current attitudes.
VGEA
will be publishing articles in our publication,
Foresight, to address the work of the Council,
and at this time we invite you to submit any
articles regarding the establishment of the"
Council, the actions and recommendations of
the Council and the affect the Council's efforts
will have on state employees. Our membership
consists of both active and retired members.
Soliciting comments from retired employees may
prove valuable."
Council
member Otis Brown and the Council Staff Members
met with VGEA retired members on September 10,
1996.
The
Rumor Mill: Early Retirement? The
VGEA office has received numerous calls relating
to "rumors" of another Early Retirement program
ranging from a lO and lO to a 4 and 4 offer.
These rumors have been coming in from every
comer of the state and almost every State agency.
As a result, VGEA Executive Director Joan Dent
contacted Governor Allen's Chief of Staff Jay
Timmons. Timmons expressed his desire to quell
the rumors and set the record straight He responded:
"There are no plans for another voluntary
"buy-out" [i.e. an early retirement program).
The voluntary separation program (WTA) instituted
in 1995 has been beneficial to all of our hard-working
employees. For those who took advantage of the
voluntary separation package to retire early
or go to the private sector, the program provided
an easier transition. For remaining employees,
savings from the reduced workforce have been
used to funnd pay increases and have resulted
in the fewest layoffs in recent memory. Additionally,
the Commonwealth now provides a permanent package
of severance benefits for employees similar
to those provided in the private sector. The
combination of a reduced workforce and this
permanent severance package alleviates the need
for a new voluntary "buy-out" or early retirement
offer." -Jay Timmons, Governor Allen's Chief
of Staff
VGEA
1997 Legislative Agenda
Competitive
Compensation VGEA requests an across-the-board
salary increase of 5% to meet the goal of the
goal of competitive salaries for employees of
the Commonwealth. This increase should be effective
July 1,1997 to ease any financial hardship during
the scheduled eight-month paydate roll-forward.
As a result, this would reduce the salary disparity
between the public and private sectors.
Performance
Evaluations VGEA requests a new evaluation
system can be established. This plan should
be simplified to a "pass-fail" evaluation.
Management
of State Government VGEA requests legislation
to establish the Joint Commission to study the
Management of the Commonwealth's Workforce as
a permanent oversight group. This commission
is charged with a study of the state's compensation,
personnel and management policies, as well as
making recommendations for improvements to Virginia's
system.
Privatization
VGEA will work with the Commonwealth Competition
Council. This council is a bipartisan state
organization created by the Governor and the
General Assembly to examine and promote privatization,
innovation, and competition in providing state
government services.
Education
for State Employees VGEA requests that state
employees be given an opportunity to further
their education through state supported colleges
and universities.
Leave
Policies VGEA opposes the "Universal Leave"
concept proposed by the Governor's Blue Ribbon
Strike Force. VGEA requests an increase in annual
leave after 15 years of service. VGEA wants
to ensure that any changes in current leave
policies protect current leave balances and
provide an enhanced benefit to state employees.
VGEA supports the concept of short and long-term
disability coverage for state employees. VGEA
requests that the "layoff policy" be revised
to a system based on seniority and satisfactory
performance.
Retirement
Issues
Cost
of Living Allowance (COLAs) VGEA requests
retirees' COLAs be granted on July 1 of the
next calendar year after the employee's date
of retirement.
Increase
Retirement Benefits Increases in retirement
benefits are necessary to offset the 5.75% state
tax which many retirees pay on their state retirement.
The 3% increase is not an adequate increase
when current state tax rates are taken into
account.
Premium
Conversion Allow retired employees to use
premium conversion for their health care premiums
deducted from their Virginia Retirement System
pension checks to reduce the amount of retirees'
taxable income.
VRS
COLA Funding Assure that funding of the
cost of living increases provided to retirees
under the Virginia Retirement System will not
change the current formula for determining the
amount of COLA increases.
Payroll
Deduction of VGEA Dues VGEA requests that
membership fees for retired members of the Virginia
Governmental Employees Association be deducted
from VRS benefit checks, if requested by the
retiree.
Life
Insurance, Coverage
-VGEA
requests employees be allowed to continue their
optional life insurance coverage after retirement
up to age 70 1/2. Allow employees who leave
state service prior to retirement with at least
20 years of service, and 5 years of participation
in the optional program, to continue such coverage
after retirement.
-VGEA requests that employees who retired prior
to age 65 maintain the full amount of their
life insurance coverage. The formula to reduce
the face value of coverage would begin at age
65, or when the employee retires, whichever
comes first.
Be
a Part of the Solution: Privatization and Competitive
Government Programs
By
Otis Brown, Chairman of the Commonwealth Competition
Council
This
is the first in a series of articles to familiarize
state employees with the mission and role of
the Commonwealth Competition Council created
by the General Assembly in 1995. This series
will provide information on the work of the
Council and encourage state employee involvement.
Government
performance continues to receive considerable
study, debate and scrutiny. Fiscal pressures
have prompted governments to cut spending and
adjust services. Government officials are increasingly
tuning to some form of public/private arrangement
as a viable option to reduce the size and cost
of government.
Utilizing
the private sector for service delivery is not
new, as it has been addressed during several
past administrations in Virginia Competition
in the provision of government services is new
and is gaining momentum across the country.
What is new in Virginia is the extent to which
competition and privatization is being given
serious consideration as a policy option. The
Commonwealth Competition Council has many duties
of which the development of an institutional
framework for a state-wide competitive program
is paramount.
The
Council's Role The Council's role is to
advocate, develop and accelerate implementation
of competition in the state government's delivery
of services to taxpayers. The bipartisan Council
has four members from the executive branch appointed
by the Governor; one member of the House of
Delegates, one member of the Senate, and four
private citizen members-two appointed by the
General Assembly and two appointed by the Governor.
The
Council has developed a process in support of
their mission to assess opportunities for competition
and privatization. This process involves factors
to consider such as the availability of vendors,
risks, legal barriers, quality of service and
impact on employees, as well as a cost model
to use when comparing private sector versus
public sector costs. The objective in most instances
is to increase competition in government services
rather than simply replacing a government monopoly
with one that is private. It is not about public
versus private delivery of state services; it's
about monopoly versus competition. It is an
effort to establish standards for competitive
government.
The
process recognizes the value of motivated state
employees and their concerns resulting from
competition and privatization. Clearly, employment
security and pension issues rank near the top
of the scale for employees. Employee involvement
and participation is desired and needed not
only to address concerns but to add their ideas
and suggestions to the list of opportunities
to further improve Virginia Government. There
are several ways to contact the Council to make
your views known.
This
is the time for you to be part of the solution
to good government and share your ideas and
concerns with the Council. The input and cooperation
of public workers is essential to a successful
competition and privatization program. Public
officials must communicate a commitment to fair
treatment for current employees.
The
second article in this series, provided by the
Council, will discuss the system created to
analyze Public and Private Performance.
VGEA
Virginia Governmental Employees Association 3105
W. Marshall Street Suite 101 Richmond, Virginia
23230 (804) 355-3120 Fax (804) 355-3316 VGEA1966@aol.com
Foresight
is the official publication of the Virginia
Governmental Employees Association. Foresight
is sent to the membership of the VEGA six times
per year. Copies are also provided to other
interested persons. This publication is provided
to members as part of their membership fee of
$24.00 (active) or $16.00 (retired) annually.
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