ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, July 11, 1996 TAG: 9607110034
SECTION: EDITORIAL PAGE: A-11 EDITION: METRO
COLUMN: Ray L. Garland
SOURCE: RAY L. GARLAND
VIRGINIA SECRETARY of Finance Paul Timmreck has followed Superintendent of Public Instruction William Bosher out of the highest rank of state service into other government jobs that pay a lot more.
In Bosher's case, it wasn't to another department of state government, but to the post of superintendent of schools in Chesterfield County. It's passing strange, however, that a single county would pay its school chief $30,000 a year more than the state pays the person with responsibility for its entire system of public education.
Some critics of Gov. George Allen have suggested Bosher left early because he was uncomfortable with some parts of the governor's conservative agenda. My own guess is he didn't know what would happen with the next governor and felt he couldn't pass up the opportunity to remain in the Richmond area heading a large and well-funded school district at a substantial increase in pay. Considering the normal raises he may expect, and his length of service in the Virginia Retirement System, it won't be many years before his prospective pension approaches $100,000 a year.
Timmreck left a cabinet job paying $104,000 a year to accept the post of vice president of finance at Virginia Commonwealth University that now pays $139,000 a year.
I have no problem with one of our larger colleges paying its finance officer $139,000. It is certainly less than a private corporation of comparable size would pay. But it's ridiculous for the state to pay its chief fiscal officer, with responsibility for a budget of $17.5 billion a year, less than one of its own colleges, with a budget of only $357 million in 1996-97.
The problem with salaries in the governor's inner circle is that tradition holds their compensation cannot exceed that of the chief executive, which is set at $110,000 a year. But the governor gets a nice house and much else besides, so it shouldn't be an issue.
Rank-and-file state employees are always saying their pay is less than that for comparable jobs in the private sector. Perhaps. But when you consider that pensions as early as age 55 are funded entirely by taxpayers - and health insurance mainly so - it doesn't seem such a terrible deal.
The problem in government is not a lack of resources but a lack of sound management of those resources. It's a false economy to pinch pennies when hiring people for jobs as important as the one Timmreck is leaving.
One of Timmreck's chief concerns has been the rising volume of state debt. The real issue here is the percent of state general-fund revenues that must be earmarked for debt-service. There is a rule of thumb that holds a government is relying too much on borrowing when its debt service exceeds 5 percent of its revenues. When Timmreck released his report on state debt last year, Virginia's debt-service was about 3.5 percent of revenues and rising. Some say any substantial increase in debt will cause the credit-rating services to cut the state's cherished AAA bond rating, which only four other states enjoy.
The warning did not dissuade the last session of the legislature from approving bonds in the amount of $69 million for corrections; $23.4 million for colleges; $9.3 million for the Science Museum of Virginia; and $6 million for two minor projects. It also created the Woodrow Wilson Bridge and Tunnel Authority, wherein Virginia will join with the federal government, Maryland and the District of Columbia to finance a costly replacement for the aging and grossly inadequate Woodrow Wilson Bridge over the Potomac.
While bonds issued by the new authority won't be a direct obligation of the commonwealth, they will, like so many others, constitute a "moral" obligation of the state that credit-rating services scrutinize when assessing ability to pay.
It's possible but not likely Virginia will suffer a credit downgrade in the next several years. The effect, however, would not be profound - perhaps another quarter of 1 percent interest on new bonds. Still, it ought not to be allowed to happen. As Timmreck said, "Our wants are bigger than our gots." If so, our "wants" should be brought more in line with our "gots."
The U.S. Department of Commerce reports that per-capita income in Virginia for 1995 was $23,597, an increase of almost 5 percent from 1994. This was exceeded by only 13 other states. This is the kind of growth that constantly changes the equation of government debt, just as it does for personal debt. If the legislature will slow the issuance of new debt for a few years, natural growth in state revenues will erase any possible threat to our credit rating.
The state's welfare-to-work initiative started a year ago in four pilot programs. Of 2,438 eligible, able-bodied recipients, 1,242 are now working full or part-time. The apparent key, as long urged here, was allowing recipients to retain a portion of their benefits after going to work.
The term "welfare state" is often used in this space, frequently related to the corrupting of America. A reader recently called me on this, saying that corruption in this country is traditional and what the welfare state did was "open up possibilities for corruption and fraud to a larger segment of the population." In that sense, it democratized corruption by letting the poor in on it. It's a valid point.
But I never mean to limit this to the poor, who get by far the smaller share of the bounty. The "welfare state" covers all benefits not reasonably earned or related to need which must be paid for by those not similarly favored. It might be welfare moms subsidized by working moms making very little more, or affluent seniors getting a 5-to-1 return on their contributions to Social Security while those now paying look forward to the exact opposite.
Ray L. Garland is a Roanoke Times columnist.
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