Dif­fer­ing sce­nar­ios pre­sented to Va. state em­ploy­ees

Gille­spie pitches tax cuts; McAuliffe, Hazel point out chal­lenges

Richmond Times-Dispatch Weekend - - Metro - BY MICHAEL MARTZ Rich­mond Times-Dis­patch

Repub­li­can gu­ber­na­to­rial can­di­date Ed Gille­spie went di­rectly to state em­ploy­ees on Satur­day to pitch his plan for a cut in state in­come taxes and a smaller but bet­ter com­pen­sated state work­force.

But the man he wants to suc­ceed, Gov. Terry McAuliffe, and one of his top aides said the re­al­i­ties of Vir­ginia’s bud­get and po­lit­i­cal paral­y­sis in Washington would make those prom­ises tough to keep.

“We need to think about this se­ri­ously in a cam­paign sea­son, what is re­al­is­tic, quite hon­estly, and not what we might want to be,” Sec­re­tary of Health and Hu­man Re­sources Bill Hazel, who has served both Repub­li­can and Demo­cratic gov­er­nors, said in a blunt lun­cheon ad­dress.

Gille­spie gave a de­tailed view of the chal­lenges fac­ing the state work­force at the an­nual meet­ing of the Vir­ginia Gov­ern­men­tal Em­ploy­ees As­so­ci­a­tion and drew ap­plause by promis­ing to make state em­ployee com­pen­sa­tion more than “an afterthought” in state bud­get­ing.

“It has got to be part of the mix from the get-go,” he told the au­di­ence of about 175 state em­ployee rep­re­sen­ta­tives at Vir­ginia Cross­ings Ho­tel and Con­fer­ence Cen­ter in Hen­rico County.

But the au­di­ence grew silent when Gille­spie out­lined his pro­posal for a “more ef­fi­cient, smaller state work­force” by leav­ing some jobs va­cant as em­ploy­ees re­tire in or­der to gen­er­ate sav­ings to im­prove the com­pen­sa­tion of those who re­main in the work­force.

“The re­tire­ment cliff is not only a chal­lenge but an op­por­tu­nity for us,” he said.

Gille­spie’s Demo­cratic op­po­nent, Lt. Gov. Ralph Northam, was cam­paign­ing in North­ern Vir­ginia. His wife, Pam Northam, ap­peared in his place to as­sure that as gover­nor his pri­or­i­ties would in­clude “putting our state em­ploy­ees first, not cut­ting jobs” and “com­pen­sat­ing them fairly and com­pet­i­tively.”

The chal­lenge was made clear by Sara Red­ding Wil­son, di­rec­tor of hu­man re­source man­age­ment for the state work­force, who says Vir­ginia is lag­ging al­most 27 per­cent be­low mar­ket in pay for gov­ern­ment em­ploy­ees, while fac­ing in­creas­ing turnover and re­tire­ment rates, and strug­gling to re­tain the young em­ploy­ees the state wants to at­tract.

Wil­son is es­pe­cially con­cerned about em­ploy­ees in agen­cies that rely on the state’s gen­eral fund — the por­tion fi­nanced by state taxes to pay for core ser­vices — rather than those that re­ceive rev­enue from other sources, such as col­lege tu­ition and fed­eral grants.

“For the things I look at, the gen­eral fund is the hard­est part to solve,” she said.

Gille­spie said he is await­ing a re­port on state em­ployee com­pen­sa­tion by the Joint Leg­isla­tive Au­dit and Re­view Com­mis­sion, the Gen­eral Assem­bly’s watchdog agency, due in Novem­ber.

“I hope that pro­vides a blue­print for long-term em­ployee com­pen­sa­tion,” he said.

Gille­spie de­parted from his pre­pared re­marks to con­front con­cerns about his pro­posal for a 10 per­cent cut to the in­di­vid­ual in­come tax rate — the big­gest source of rev­enue for the gen­eral fund — phased in over three years.

He said his plan as­sumes an ad­di­tional $3.4 bil­lion in gen­eral fund rev­enues over the next five years, as es­ti­mated by the Gover­nor’s Ad­vi­sory Coun­cil on Rev­enue Es­ti­mates, and would di­vert about $1.4 bil­lion for tax re­lief aimed at cre­at­ing jobs in startup com­pa­nies and small busi­nesses.

McAuliffe, a Demo­crat, who spoke to the as­so­ci­a­tion at the be­gin­ning of the meet­ing, dis­missed the pos­si­bil­ity of the state adopt­ing a ma­jor tax cut plan in the face of in­creas­ing spend­ing re­quire­ments for pub­lic ed­u­ca­tion and Med­i­caid in the two-year bud­get he will pro­pose in De­cem­ber be­fore leav­ing of­fice in Jan­uary.

“Be­fore I do any­thing, I have a half-bil­lion-dol­lar hole to fill,” he said in an in­ter­view af­ter his speech.

“You are not go­ing to cut taxes right now,” the gover­nor said. “It’s just not go­ing to hap­pen.”

Leg­isla­tive lead­ers in the Repub­li­can-con­trolled Gen­eral Assem­bly have been re­luc­tant to ap­prove leg­is­la­tion that cuts state or lo­cal tax rev­enues with­out a com­pre­hen­sive look at all sources of money and how to re­place them.

“It’s not all about salary, but to the ex­tent it is about salary, it takes money to do it,” Hazel told the as­so­ci­a­tion. “The Gen­eral Assem­bly has to ap­pro­pri­ate that money.”

Loom­ing over the dis­cus­sion were the threat of fed­eral bud­get se­ques­tra­tion and ef­forts in Washington to shift the re­spon­si­bil­ity for fed­eral pro­grams, such as Med­i­caid, to states. “Guess what? They aren’t plan­ning to send any money to do it with,” said Hazel, a re­tired or­tho­pe­dic sur­geon who also served as health and hu­man re­sources sec­re­tary for Repub­li­can Gov. Bob McDonnell.

In a state­ment on Satur­day, the Northam cam­paign por­trayed the Demo­crat as a re­li­able sup­porter of state em­ploy­ees, first as a state sen­a­tor and then as lieu­tenant gover­nor, and said Gille­spie’s tax plan would threaten core state ser­vices that rely on the gen­eral fund.

“Dr. Northam has fought to sup­port pub­lic em­ploy­ees over his 10 years in elected of­fice and Rich­mond, most re­cently sup­port­ing a pay raise to re­flect the tremen­dous work they do to keep the com­mon­wealth eco­nom­i­cally com­pet­i­tive and ef­fi­ciently pro­vid­ing the tax­pay­ers with key ser­vices like ed­u­ca­tion and pub­lic safety,” spokes­woman Ofi­rah Yh­eskel said.

“Ed Gille­spie’s plan to give an­other tax cut to the wealthy would cut pub­lic ed­u­ca­tion, trans­porta­tion, health care and likely pre­vent any chance of state em­ploy­ees get­ting a raise dur­ing his administration.”

Gille­spie did not di­rectly re­fer to Northam’s ab­sence at the fo­rum, but he told state em­ploy­ees he had trav­eled from a cam­paign event in Tazewell County two hours ear­lier.

“Spend­ing this time with you was a pri­or­ity for me be­cause spend­ing time with you as gover­nor will be a pri­or­ity for me,” he said.


P. Northam


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