Category Archives: Governance

Appointing Lawmakers to Executive Boards Violates the State Constitution

Virginia constitutional convention, 1830

The boards of 21 state entities are exempt from the state law prohibiting legislators from serving on boards, commissions and councils within the executive branch. They include:

Branch Pilots
Southwest Virginia Higher Education Center
Southern Virginia Higher Education Center
New College Institute
Teacher Education and Licensure
Virginia Interagency Coordinating Council
Board of Veterans Services
Roanoke Higher Education Authority
Online Virginia Network Authority
Virginia Geographic Information Network Advisory Board
Standards of Learning Innovation Committee
Virginia School for the Deaf and the Blind
Substance Abuse Services Council
Criminal Justice Services Board
State Executive Council for Children’s Services
Virginia Board of Workforce Development
Volunteer Firefighters’ and Rescue Squad Workers’ Service Award Fund Board
Secure and Resilient Commonwealth Panel
Forensic Science Board
Southwest Virginia Cultural Heritage Foundation
Virginia Growth and Opportunity Board

Not every one of these organizations has a member of the General Assembly serving on its board, but many do. For example, at the Online Virginia Network Authority, a collaborative initiative to promote online learning delivered by public universities, eight of twelve board members serve in the legislature. Another entity, the SOL Innovation Committee, has four delegates and three senators on its board along with 28 local education administrators.

The author of the following legal article, who goes by the pen name of Publius, argues that permitting legislators to sit on executive-branch boards is an unconstitutional violation of Virginia’s constitutional separation of powers.

— JAB


Would It Be Constitutional to Appoint a Virginia Legislator
to a Board of Visitors of a Virginia Public University
or Other Executive Branch Boards?

by Publius

 The question arises whether it would be constitutional to appoint legislators to serve on the Board of Visitors of a public university in Virginia or on other Executive Branch Boards. Based on the clear constitutional text, on the practical consequences, on the decisions of the Virginia Supreme Court, and on decisions elsewhere, such an appointment would violate the separation of powers.  The answer to the question is not close.

I. The Separation of Powers Clauses

There are two Separation of Powers Clauses in the Virginia Constitution. Article I, § 5, titled  “Separation of legislative, executive, and judicial departments,” requires

That the legislative, executive, and judicial departments of the Commonwealth should be separate and distinct;

And Article III, § 1, titled “Division of Powers,” provides:

The legislative, executive and judicial departments shall be separate and distinct, so that none exercise the powers properly belonging to the others, nor any person exercise the power of more than one of them at the same time;

Appointing a legislator to a university’s Board of Visitors would legislatively interfere with executive branch functions, with no necessity for doing so, thus violating the Separation of Powers Clauses as they have been interpreted by the Virginia Supreme Court. Even more clearly, such an appointment would result in the same person exercising both legislative and executive functions at the same time, with no justification whatever, thus violating the clause I have italicized from Article III, § 1.

These restrictions are not mere formalities. They are designed to protect the people by preventing the concentration of power in one or a few individuals, or in any one branch of government. Each legislator shares in the awesome power to make laws for the entire Commonwealth, including for its universities. No legislator may augment that power by also sharing in the executive-branch power to administer those universities.

II. The Boards of Visitors

The Boards of Visitors of Virginia’s public universities are plainly state agencies in the executive branch, and courts have treated this fact as obvious.[1] Similarly, the General Assembly’s Joint Legislative Audit and Review Commission has recognized that these Boards are part of the executive branch.[2] The Governor appoints persons to the Boards of Visitors,[3] and the Governor can remove Visitors for “malfeasance, misfeasance, incompetence, or gross neglect of duty.”[4] This gubernatorial appointment and removal power plainly locates these Boards in the executive branch.

These Boards exercise executive authority and perform executive functions. They supervise and administer large institutions with substantial assets, many employees, and many students, and in some cases, hospitals and medical practices. They are statutorily authorized to manage their institution’s funds, appoint its president and its faculty, fix salaries and tuition, and buy and sell real estate.[5] They are authorized to regulate parking and traffic, the hiring and firing of employees, and the admission, discipline, and expulsion of students.[6] They are instructed to manage their institution’s endowment[7] and given many powers necessary for the management of medical centers.[8] They have law enforcement responsibilities; they are authorized to establish a campus police department[9] or, at the Board’s election, require a contiguous local government to provide police protection on campus.[10] Continue reading

What the Numbers Tell Us

How do Virginia’s public higher-ed institutions rate on the goals established in the 2005 Restructuring Act and embedded in state code? The data is incomplete.

This is the fourth of four articles exploring higher-education accountability in Virginia since enactment of the 2005 “Restructuring Higher Education Financial and Administrative Services Act.”

The 2005 Restructuring Act created a new covenant between the Commonwealth of Virginia and its system of higher education. In exchange for greater freedom from state regulation, colleges and universities would be held accountable for achieving 12 core state goals. Those goals are still part of the state code. But over the intervening years, priorities have changed and many benchmarks have been dropped.  The state publishes no comprehensive report card for individual institutions based on achievement of those goals.

Yet the State Council for Higher Education in Virginia (SCHEV) does compile much of the data needed to track progress in achieving the state goals. The numbers can be extracted from a searchable database the council maintains on its website.

In the concluding chapter of this series, Bacon’s Rebellion extracts that information to see how Virginia’s higher-ed system has performed since 2005. The task of extracting the data for each of the state’s public institutions would be too arduous to undertake within a reasonable time frame, so we show data for the system as a whole.

Goal 1: Ensure Access to higher education, including meeting enrollment demand.

Virginia’s system of higher education has expanded significantly since enactment of the 2005 Restructuring Act to accommodate a growing student population. Between 2005 and 2016, total enrollment at public, four-year institutions increased 11%. However, almost all of the increase took place by 2011. Enrollment has leveled off since.

Are Virginia’s public colleges and universities keeping up with demand for higher education? That’s impossible to say. SCHEV has not defined enrollment demand or set any benchmarks.

A related metric is the number of degrees awarded. A stated goal of higher education policy is not simply to increase enrollment, it is to increase the number of Virginians graduating with degrees. Indeed, the 2011 Top Jobs Act, which amended the 2005 Restructuring Act, set an explicit goal of increasing the cumulative number of two-year and four-year degrees awarded by public colleges by 100,000 over 15 years. To award more degrees, colleges must enroll more students and/or increase the retention rate.

As with enrollment, the number of degrees granted each year increased at a robust pace from 2005 to 2011 — and then plateaued. Ironically, that tapering off coincided with the Top Jobs legislation, which was enacted with the goal of boosting enrollment. It is not clear why enrollments have plateaued. One possible explanation is that students signed up during the depths of the recession because so few jobs were available; once economic recovery took root, students returned to the job market. Another is that students began balking at the rising cost of attendance.

The Top Jobs Act put special emphasis on awarding more STEM (science, technology, engineering, math) and health degrees. SCHEV data indicates that the higher-ed system boosted the output of STEM-H degrees by 11.1% between the 2011-12 and 2015-16 school years — double the 5.3% increase for all degrees. STEM degree awards are on an upward trajectory.

Goal 2: Assure affordability, regardless of income.

As discussed in Part III, SCHEV did not develop an overall affordability metric for individual institutions. However, its annual Tuition & Fees report does provide a measure for the higher-ed system as a whole: average undergraduate charges (tuition, fees, room, board) as a percentage of per capita disposable income. After bottoming out at 31.8% in 1999-2000, charges rapidly outpaced Virginia earnings. By the 2016-17 school year, a year’s charges consumed 47.6% of per capita income. Continue reading

What Virginia Needs Is a Good Local-Government Report Card

Speaking of government report cards for states (see previous post), Virginia could use a good system for rating its local governments. As it happens, the Virginia Tea Party Federation is mobilizing to grade Virginia local governments on the basis of 20 to 30 key performance indicators on fiscal health and quality of government services.

The data will be extracted whenever possible from authoritative sources such as local Comprehensive Annual Financial Reports (CAFRs), Mark Dougherty, chairman federation’s Local Government Committee (LGC), said yesterday at the Tuesday Morning Group gathering of conservative and libertarian activists. The LCC hopes to release results in late 2017 after fiscal 201 data becomes available this fall.

The goal is to educate citizens and local government officials and to highlight opportunities to improve governance, Dougherty said. CAFRs run 200 to 300 pages long, and they are difficult for ordinary citizens to plow through. The Tea Party is looking for volunteers willing to compile data for each of Virginia’s 95 counties and 38 cities.

It will be a challenge to create a “fair” rating system, acknowledged Daugherty, who hails from Staunton. Virginia localities vary in size and needs from sparsely populated Highland County, with a $7 million annual budget, to massive Fairfax County with more than a million people and a $7 billion annual budget.

The Tea Party report cards will rate Virginia’s localities on the basis of standard measures and ratios that apply to all, but may adjust for a locality’s unique attributes. Bonus points might be awarded, say, to a county that posts its checkbooks online for public inspection, while penalties might be levied for self-declared sanctuary cities (on the grounds that the presence of illegal aliens runs up local government costs).

As an example of the kind of analysis he hopes citizens will be able to conduct, Daugherty cited Henrico County, where 20 fire-and-rescue stations serve 330,000 residents. Of its 47,000 calls last year, only 825 responded to fires. Clearly, the vast majority were non-fire related. Before Henrico builds another fire station, might it be feasible to have a light fire/rescue vehicle to patrol areas of the county that generate the most calls?

Another example: City of Richmond public schools have between 2,000 and 3,000 students in each of its elementary school grades but only about 1,200 in its high school grades. Are kids dropping out? Are parents keeping their kids in elementary school but then yanking them out of middle school, either to put them in private school or to move out of the county? That would be helpful to know in formulating educational policy. Another question arising from the data is whether the school has adjusted its infrastructure — number and size of public school facilities — to the lower number of high school students.

Daugherty pointed to Goochland County’s “Strategic Plan Report Card,” with five goals and 23 measures, as a potential template for what the Tea Party has in mind. Goochland not only looks at its property tax rate but tracks the ratio of commercial to residential property, new taxable commercial investment, and new taxable investment within its eastern growth management area. The report also measures financial liquidity, the debt-to-expenditure ratio, patrol area covered per deputy, emergency response times, and annual government employee turnover, among other indicators.

Melting Metrics

The General Assembly enacted the 2005 Restructuring Act with the idea of holding public universities accountable to a set of performance metrics. Many measures have fallen by the wayside.

This is the third of four articles exploring higher-education accountability in Virginia since enactment of the 2005 “Restructuring Higher Education Financial and Administrative Services Act.”

Upon becoming governor in 2002, Mark Warner made higher education a top priority. An entrepreneur who had made his fortune in cell phones, he saw Virginia’s colleges and universities as vital institutions for preparing a technology-ready workforce and for creating R&D-based innovation centers. He arranged a $900 million state-backed bond initiative to pay for a college building program, and he pushed through a tax increase to offset the spending cuts he’d enacted previously to balance a recession-hammered budget.

Warner paid keen attention to higher ed issues. In 2003 Virginia became one of five states to join the National Collaborative for Postsecondary Education Policy. The ensuing discussions brought another priority to the fore — the gap in access to higher education experienced by different races and ethnic groups. African-Americans and Hispanics lagged the population in college attendance, and given the increasing proportion of minorities in the college-bound population, lawmakers worried that the disparity in access could get even worse.

At the same time, Virginia’s public universities had their own agendas, which entailed winning more freedom from regulation and less state meddling with tuition. In 2005, Warner and the higher-ed establishment struck a grand bargain enshrined in the “2005 Restructuring Act” — universities would get more autonomy, and Warner would get more accountability.

“Restructuring was a historic effort by the Commonwealth to establish a new relationship that would both help to ensure the viability and the effectiveness of public higher education for the citizens of the Commonwealth,” says Peter Blake, director of the State Council of Higher Education for Virginia (SCHEV).

The legislation enshrined eleven goals, to which a twelfth was added after the 2007 Virginia Tech massacre. Public institutions would:

  1. Ensure access to higher education, including meeting enrollment demand.
  2. Ensure affordability, regardless of income.
  3. Provide a broad range of academic programs.
  4. Maintain high academic standards.
  5. Improve student retention and progress toward timely graduation.
  6. Develop uniform articulation agreements with community colleges.
  7. Stimulate economic development.
  8. Increase externally funded research and improve technology transfer.
  9. Work actively with K-12 to improve student achievement.
  10. Prepare a six-year financial plan.
  11. Meet financial and administrative management standards.
  12. Ensure the safety and security of students on college campuses.

The 2005 Restructuring Act put the Governor and Secretary of Finance in charge of developing financial and administrative measures, and tasked SCHEV with devising and tracking metrics for the other goals. SCHEV would publish an “Assessment of Institutional Performance” every year that ascertained whether or not institutions met the goals. Falling short would jeopardize a college’s access to revenue sources estimated in 2008 to be worth about $60 million across Virginia’s higher-ed system. (The incentives have declined to less than $20 million in recent years.)

After the law passed, the state began diligently devising metrics and compiling data, some of which SCHEV had been collecting already, and Virginia’s public colleges and universities incorporated the state goals into their own planning processes. Several years later, the 2011 “Preparing for the Top Jobs of the 21 Century” act, modified the goals, establishing an objective of increasing the number of degrees awarded by 100,000 over 15 years. Top Jobs put an emphasis on STEM (Science, Technology, Engineering and Math) and health disciplines.

We saw in Part II of this series that the 2005 Restructuring Act has brought some tangible financial benefits to Virginia’s colleges and universities. In exchange, the state expected to hold them accountable for achieving the 12 state goals. How did those goals translate into metrics? How carefully did the state keep track of those metrics? And what happened if and when institutions fell short?

While outside observers hoped that the new covenant between the Commonwealth and its higher-ed system might provide a new model for the nation, administering the 2005 Restructuring Act proved more difficult than anyone anticipated. The accountability-by-metrics piece bogged down in a legislative-bureaucratic morass.

SCHEV and the Secretariat of Finance still monitor student enrollment and degrees granted, and they track an array of financial and administrative measures for the institutions that have signed Level II and Level III autonomy agreements. SCHEV compiles these limited metrics in biennial performance reviews for each institution. Further, SCHEV maintains a rich database of higher-education statistics, much of which is relevant to the 12 state goals, and it publishes metrics for a strategic plan, the Virginia Plan for Higher Education.

But changes implemented over the years have undercut accountability. Hewing to directives from governors and the General Assembly, SCHEV no longer sets benchmarks or monitors metrics for all 12 state goals at each college and university. If institutions fall short of metrics that SCHEV does track, they suffer no public rebuke. Most significantly, while Virginia’s higher-ed system continues to meet some state goals, the apparatus put into place by the 2005 Restructuring Act has proven unable to rein in tuition cost increases or prevent a crisis of middle-class affordability.   Continue reading

Cutting the Strings

The 2005 covenant between the state and higher-ed has given public institutions more autonomy, flexibility, and, above all, control over tuition.

This is the second of four articles exploring higher-education accountability in Virginia since enactment of the 2005 “Restructuring Higher Education Financial and Administrative Services Act.”

In 2005, when leaders of Virginia’s most prestigious universities were angling for more autonomy from state control, they complained about the bureaucratic hoops they had to jump through. State regulators made the College of William & Mary install an exit sign in a picnic shelter. Whenever outdoor events were rained out, the University of Virginia had to apply for permission to erect a tent. The $300 fees were bad enough. But approval often didn’t come until the events were over.

Such nit-picking dictates were mere irritants, though, compared to other grievances. Procurement rules led to lengthy delays in capital outlay projects. Human Resources policies designed for government bureaucracies were ill suited for an academic setting. In theory, boards of visitors were free to set their institutions’ tuition and fees, but in practice lawmakers meddled frequently: capping, freezing or even rolling back tuition increases.

University presidents felt whipsawed by state cuts to higher ed. Governor Mark Warner had balanced a recession-battered budget by cutting FY 2003 higher-ed expenditures 22%, and then in 2004 had pushed through a tax increase that allowed him to restore $278 million. While the replenishment of funds was welcome, universities wearied of the “feast or famine” pattern that made a mockery of strategic planning.

While the three elite institutions — UVa, W&M and Virginia Tech — abandoned their quest for “charter” university status, which would have treated them like independent political subdivisions of the Commonwealth, they did get much of what they wanted. In the 2005 Restructuring Act, a compromise hammered out with Warner and the General Assembly, higher-ed institutions were assigned one of three levels of autonomy, depending upon their financial and administrative competence. In exchange, the state would hold them accountable to performance metrics for 12 policy goals.

“The name of the game on this thing all along was tuition, as well as regulatory relief,” David Breneman, an expert on restructuring activities and dean of the Curry School of Education at UVa, told Lara K. Couturier, whose 2006 essay, “Checks and Balances at Work: The Restructuring of Virginia’s Public Higher Education System,” remains the definitive study of the restructuring act.

Colette Sheehy vice president for management and budget at UVa., and a key player in negotiating the legislation, seconded the view. “We felt we had to get control over one of our key revenue sources: tuition.”

Virginia law already gave boards of visitors the power to set tuition and fees — but governors and legislators ignored it, arguing that they had never given up the power of oversight. The restructuring act reaffirmed the law in the hope that lawmakers would stop trying to set tuition policy… at least for a while.

“In law, in code, it’s probably no stronger than it was before,” then-Secretary of Education Peter Blake told Couturier. “[It] will last as long as the Legislature doesn’t want to override it. … In the minds of the decision makers, the balance probably shifted a little bit to give institutions a little more autonomy over their tuition.”

Twelve years later, how well has the restructuring act worked out for Virginia’s public colleges and universities?

The answer: pretty well from an operational perspective. Higher-ed institutions say they appreciate the increased flexibility and reduced red tape that comes with autonomy. The law also has worked out very well from a revenue perspective. The 2005 deal provided cover for years of relentless increases in tuition and fees.

But memories fade with time, and Warner’s grand bargain is threatening to unravel. Legislators are rebelling against a cost of college attendance that has outstripped the increase in Virginians’ household incomes and put an increasing strain on middle-class families. A bipartisan coalition of delegates and senators submitted a bevy of bills in the 2017 session that would restrict the freedom of universities and their boards to set tuition. Senior legislators fended off the bills this year, but not the resentment.

Three levels of autonomy. The 2005 Restructuring Act created three tiers of autonomy. Only institutions with advanced managerial capabilities and a minimum of AA- bond ratings qualified for Level III. UVa, Tech and W&M qualified immediately, and Virginia Commonwealth University has since made the cut. Each institution negotiated a management agreement that defined its prerogatives relating to capital outlays, leases, information technology, procurement, human resources and financing/accounting. Continue reading

Autonomy and Accountability

Under the 2005 Restructuring Act, Virginia universities got more autonomy in exchange for more accountability. Today, they still have autonomy but there’s less accountability.

This is the first of four articles exploring higher-education accountability in Virginia since enactment of the 2005 “Restructuring Higher Education Financial and Administrative Services Act.”

The year 2005 was a watershed for higher education policy in Virginia. Lawmakers struck a grand bargain that gave Virginia’s public colleges and universities greater autonomy from state regulations in exchange for more accountability in meeting state goals.

Virginia’s elite universities — University of Virginia, Virginia Tech and the College of William & Mary — had been lobbying for “charter” status that would liberate them from suffocating state controls and reaffirm their right to raise tuition without interference from politicians. At the same time, Governor Mark Warner was articulating what he wanted from the state’s higher education system: expanded enrollment, access for minorities and the poor, and greater progress in obtaining external R&D funding, among other priorities.

Lobbyists and lawmakers struck a compromise: All of Virginia’s colleges and universities would get more day-to-day operational freedom, with the elite three gaining the greatest latitude, and Warner would get more accountability for progress toward state goals. The 2005 “Restructured Higher Education Financial and Administrative Operations Act,” or “2005 Restructuring Act” for short, spelled out the new covenant between the state and its universities.

“Warner worked really hard to get a consensus around it,” recalls Pat Callan, president of the National Center for Public Policy and Higher Education, who was involved in articulating the accountability goals. “It had a pretty good shot at being successful.”

Mirroring a tug of war between states and public universities taking place in every state, the 2005 Restructuring Act garnered widespread attention in the world of higher ed. Some observers speculated that the law would provide a model for other states.

“The Virginia case represents one of the most coherent and thoughtful efforts to deregulate and decentralize while working toward an explicit state agenda that we have seen,” wrote Lara K. Couturier, a colleague of Callan’s, in a 2006 analysis.

But the jury was still out on whether the impact of the legislation would be positive or negative. Would legislators respect the spirit of the legislation and remain hands-off on tuition? Would universities prompt a political response by continuing to raise tuition aggressively? Would the benefits of autonomy outweigh the burden of compiling more reports and statistics? How effectively would the state hold colleges accountable to Warner’s goals, often referred to as the “state ask”?

In 2008, the Joint Legislative Audit and Review Commission (JLARC) published a two-year review of the Act, with special attention to the management agreements that UVa, Tech and W&M negotiated with the state. “It appears that the management agreements have generally worked in a satisfactory manner to date,” the report concluded. Streamlined procedures didn’t address every gripe university administrators had, but the new arrangements were a clear improvement over the old.

It was too early at that time to gauge the impact of restructuring on students, but signs seemed positive. The three universities covered by management agreements had committed to increase access for underrepresented student populations and to facilitate transfers by community-college students, JLARC said. “The management agreements should also make college more affordable for most students,” the authors added hopefully.

In 2011, however, higher education policy took a sharp turn with the passage of “The Virginia Higher Education Act of 2011” during the McDonnell administration. Also referred to as the “Top Jobs” act, this legislation set a new goal of awarding of 100,000 additional degrees by 2025. The shift in priorities entailed the creation of some new accountability measures and the abandonment of others.

By 2017, the grand bargain of 2005 was showing signs of breaking down. State support for higher ed was eroding, putting pressure on Virginia’s public universities to shift costs to students. Runaway tuition was making higher education increasingly unaffordable, not just for the poor but the middle class. In line with national trends, Virginia students were taking on ever heavier debt. Although a college degree was perceived as an admission ticket into the middle class, the high cost of attendance required ever greater financial sacrifices. Responding to constituent complaints, lawmakers submitted a slew of proposals to assert more state control over college tuition and governance. Higher-ed’s friends in the legislature bottled up those bills in committee, but the educational establishment was on notice — the natives were getting restless.

Since JLARC issued its two-year review in 2008, no one has taken a comprehensive look at the 2005 Restructuring Act. The commission did conduct several narrow-bore studies in 2014 that illuminated drivers of higher costs such as administrative bloat, academic productivity, spending on athletics, and cuts in state support for higher education. But no one has thought to question the premises of the 2005 Restructuring Act.

Perhaps it is time that someone asked if the law has lived up to expectation. Have colleges and universities benefited from their freedom from state controls? Have Virginia’s higher-ed institutions delivered the “state ask”?

In articles to follow, I will argue that the Act delivered on some of its promises but contributed to a bigger, over-arching problem: an affordability crisis for the middle class. Among the conclusions:

  • Accountability has been narrowed to a few metrics. Of the 12 “state ask” goals, some are impossible to quantify, and some are no longer of interest to legislators. Today, the state tracks mainly enrollment and the number of degrees awarded, along with compliance with administrative and financial standards.
  • Falling short of performance goals incurs no sanction. The State Council for Higher Education in Virginia works quietly with institutions behind the scenes to get them back on track.
  • Struggling to define “affordability,” the state did not adopt an affordability benchmark or metric until 2011, and then the Top Jobs act suspended it. Universities suffer no rebuke for increasing tuition aggressively.
  • The state does not monitor the cost drivers of tuition. Other than two JLARC reports published in 2014, the state has conducted no formal analysis on the relationship between increasing higher-ed costs and increasing tuition.

The state goals enshrined in the 2005 legislation and the metrics that flowed from them ignore cost drivers such as athletic subsidies, faculty productivity, administrative costs, building maintenance, obsolete programs, and the “Club Ed” effect on dorms, cafeterias and other student amenities.

As the old business adage goes, “You manage what you measure.” The overseers of Virginia’s higher-ed system didn’t establish cost-related metrics, so the institutions didn’t make a priority of managing them. As institutions sought to achieve other goals against a backdrop of shrinking state financial support, raising tuition & fees was the path of least resistance. The result: more students are borrowing, and they are borrowing more.

In Part II, I will discuss the benefits of the 2005 Restructuring Act to Virginia’s colleges and universities.

Sixty Percent of Slover Foundation Budget Goes Toward Administration

Paul Fraim. Photo credit: Virginian-Pilot

The Slover Literary Foundation, a tax-exempt charity set up to support Norfolk’s flagship Slover Library, plans to spend more on salaries next year than on direct aid to the library, the Virginian-Pilot reports today.

The Slover foundation will spend almost 60% of its fiscal 2018 budget on administrative costs including a $150,000 salary for former Norfolk Mayor Paul Fraim, according to figures Fraim provided the Pilot. The highest-rated charities on Charity Navigator tend to spend 10% or less on administration, the newspaper notes.

Foundation board members argue that the salary paid to the 67-year-old Fraim is worth it. The former mayor brings a vast network of relationships to the foundation and can make things happen. His skills and connections have helped bring high-profile events to the library such as a NATO panel and a “future of the Navy symposium as well as guest speakers, music, and youth programs.

Slover is one of 13 public libraries in Norfolk. The city has tried to make it a cultural destination with technology, architecture and events.

Bacon’s bottom line: Read the Pilot article on the pros and cons of paying Fraim a $150,000 salary. I can see both sides of the story. But I’m mainly interested in a different point: Whether the salary is justified or not, transparency is vital. If a charity or non-profit benefits from tax-exempt status, it owes an obligation to the public. Tax exemptions, after all, are an indirect subsidy from taxpayers.

Most charities report this data in 990 forms. But The Slover foundation did not release the data for four years. Reports Eric Hartley:

Until now, it had been difficult for donors or other outsiders to evaluate the Slover foundation’s spending. Founded in 2008 to raise money to build a downtown library, the organization did not make its finances public between 2013 and this year. Its outside accountants said it was not required to, unlike most charities, because it was a “supporting organization” to the city government.

The justification for not releasing the financial information is specious. If anything, its affiliation with the City of Norfolk means it should be held to the same Freedom of Information Act standards as Virginia government! Who could be blamed for suspecting that Fraim avoided so long releasing the information to avoid embarrassment of having it appear in the Pilot?

There’s a bigger point here: the lack of accountability of non-profit organizations generally. Nonprofits are required to basic financial information in 990 forms. But non-profits have minimal government regulatory oversight. They have no shareholders to answer to. They receive little press scrutiny. (The Pilot’s coverage of Slover is a rarity). And boards of directors are typically clubby conclaves of well-heeled members of the business and political elite who don’t want to rock the boat.

I’m reminded of a recent column by Walter Williams, an economics professor at George Mason University, who wrote of university trustees:

Every board of trustees has fiduciary responsibility for the governance of a university, shaping its broad policies. Unfortunately, most trustees are wealthy businessmen who are busy and aren’t interested in spending time on university matters. They become trustees for the prestige it brings, and as such, they are little more than yes men for the university president and provost.

The same critique extends to many government boards and nonprofit boards. There are always exceptions — in my coverage, I’ve seen a few individuals willing to ask tough questions — but they are rare. I sometimes wonder if the best way I could “give back” to the community when I retire is to convert Bacon’s Rebellion into a platform for covering governance of Virginia’s foundations, charities, universities and health systems. I’d be interested to know what readers think of the idea.

Failing to Fix the Unfixable

Cranky (aka John Butcher) is on a tear these days, most recently exposing the Virginia Board of Education’s ineffectual effort to fix the City of Richmond’s broken school systems.

The Richmond’s schools are in turmoil. According to the state board, 27 of the city’s 44 schools are not fully accredited. The school board has booted out the district’s superintendent, who only two or three years ago had been highly touted, for reasons that remain opaque. City and state bureaucracies are moving ponderously to address the deep-rooted dysfunction. But so far, the only product of the teeth gnashing and foot dragging is a “Memorandum of Understanding,” which, in Cranky’s jaundiced eyes, “does nothing but create busy work and a ‘rough draft’ plan that is not a plan.”

Cranky proceeds to dismember the MOU like Jeffrey Dahmer rended his victims. The MOU, he suggests, is vague, redundant, intrusive, and unenforceable. Worst of all, he writes, “VBOE does not know how to fix Richmond’s broken school system. They don’t know what to tell a judge that Richmond should be made to do, so they don’t even contemplate exercising their authority to sue.”

If you want to find yourself laughing and crying at the same time, check out his post.

Business Leaders Demand WMATA Governance Reform

An alliance of Washington-region business groups is calling for a fix for the Washington Metropolitan Area Transit Authority (WMATA) that would create dedicated funding streams for the Metro rail system and a restructuring of the authority’s board.

Twenty-one chambers of commerce and employers groups outlined the proposal in a letter to the region’s political leaders, reports the Washington Post. The proposal is expected to have influence, the Post says, noting that executives with the signatory businesses are frequent campaign contributors.

WMATA has said it needs at least $500 million a year to restore to functioning condition the commuter rail transit system, which has been plagued by maintenance issues, safety incidents, and declining ridership. The letter signatories did not specify a particular funding mechanism.

“We’re not trying to get into the weeds,” said Bob Buchanan, founder of the 2030 Group, told the Post.

One commonly floated proposal is a region-wide, penny-per-dollar sales tax, but Northern Virginians have objected on the grounds that Northern Virginia would wind up paying more than Maryland and the District of Columbia combined.

Describing the Metro as in a state of “crisis,” the letter linked the creation of a dedicated revenue source toward a revision of the tri-state governing compact and a restructuring of the board. States the letter:

We reiterate our strong conviction that any reform effort must include reforms to WMATA’s governing, financial and operational structures. Reform of any one structure alone will not be sufficient. For instance, additional funding for Metro will only be beneficial if it is accompanied by structural changes that give WMATA’s board the flexibility to effectively allocate resources and staff the flexibility to leverage additional resources to make operational improvements.

Governance reforms include “right-sizing” the WMATA board and requiring directors to have expertise in specialized areas, including transit operations, management, finance and safety.

Bacon’s bottom line: WMATA is critical to the functioning of the Washington metropolitan region. After decades of short-changing maintenance, WMATA needs billions of dollars to remain a viable transportation mode. There is no avoiding the necessity for regional taxpayers to cough up more money to restore the rickety system to health. Washington-area residents have been enjoying the benefit of a heavy-rail transit system for years without paying its full cost — now it’s time to pony up. But given WMATA’s dismal history, the NoVa business leaders are absolutely right to demand reforms that will ensure that any new funds are not mis-spent or frittered away in concessions to WMATA labor unions.

Working out a compromise with Maryland and D.C. won’t be easy, but Virginia’s political leaders need to hang tough.

Virginia Needs a New Constitution, Part 2

1901 constitution flyer

by Donald J. Rippert

The Commonwealth’s Cornucopia of Constitutions. Virginia has written, scrapped and rewritten its state constitution many times. Virginia is presently operating under its seventh constitution. While that seems striking compared to the U.S. Constitution, it’s not that unusual for a state constitution. Florida and Pennsylvania have had five constitutions, South Carolina six, Georgia nine and Louisiana a whopping eleven different constitutions. Of the original 13 colonies only Massachusetts has yet to perform a constitutional rewrite.

The Spirit of ’76. Virginia’s first constitution was written in 1776. George Mason and James Madison are seen as primary authors. After the obligatory heckling of King George III the constitution got down to the basics of defining the state government – bicameral legislature, governor and so on. The accompanying Virginia Declaration of Rights was a strong point of this first constitution. That document would effectively become the predecessor to the U.S. Bill of Rights. Unfortunately, elitism has been a constant companion to Virginia politics and this constitution was no exception. Voting was reserved for owners of substantial property and men of wealth. The landowners of Southeastern Virginia would be in control of the state.

East vs West – 1830. By the 1820s Virginia was (predictably) one of only two states that restricted voting to landowners. The state constitutional convention of 1829 to 1830 tried to address this distorted concentration of power in the landed gentry. Suffrage requirements were reduced but not enough to address the concerns of the small farmers in the western parts of the state. Virginia kicked the can down the road.

The Reform Constitution, 1851. As the population of western Virginia continued to grow, the Richmond-to-Norfolk “corridor of evil” vainly tried to maintain control of the state through voting rights that required substantial property ownership and a bizarre county-based representation system. Talk from the west of abolishing slavery and / or secession from the state forced the eastern elites to change. The new constitution gave the vote to all white men of voting age and called for election of the governor, the lieutenant governor and all judges by popular vote.

Wartime Constitution, 1864. After years of political abuse by Virginia’s southeastern elite, a number of the counties in the western and northern part of the state decided they would not follow the Richmond-centric rebels into what can only be called an apocalyptic Civil War. The Constitution of 1864 could effectively be called the first state constitution for West Virginia. What remained of Virginia was too busy marching toward utter destruction and unconditional surrender to bother with constitutional niceties.

The Carpetbagger Constitution, 1870. The provisions of The South’s surrender included military occupation of states like Virginia. Given that slavery had been abolished the military commander of Virginia called for a constitutional convention to memorialize America’s new reality. However, the Richmond-based elite would have none of it. Many of the white conservative Virginians who developed the bright idea of a failed secession from the United States now refused to vote for delegates to the constitutional convention. This led the way for a Republican led convention headed by John C. Underwood. In what should come as a surprise to nobody, the “elite free” convention wrote one of Virginia’s best constitutions. The new constitution granted suffrage to all males over 21, established a public school system with mandatory funding and ended the disenfranchisement of former Confederate government members.

The Empire Strikes Back, 1902. Virginia’s short period of competent government was ended as the Democratic Party retook the state legislature. The usual band of elitists called for another constitution to be written. It was a doozy. Poll taxes and literacy tests were included to effectively remove African Americans from the voting booth. Segregation became the law of the land. Power was aggrandized in Richmond with the elimination of the county court system. The State Corporation Commission gave added weight to the centralized government. Since African Americans still could vote based on the 1870 Constitution The Imperial Clown Show in Richmond decided to pass this abomination without a popular vote. This was both Virginia’s worst constitution and its longest-lived.

Do we have to? 1971. While Virginia’s political elite moved smoothly from poll taxes to literacy tests to segregation to massive resistance, the rest of the country progressed. Mounting federal pressure in the form of U.S. Supreme Court decisions like Brown v. Board of Education and legislation like the Voting Rights Act of 1965 made it harder and harder for Virginia’s elite to persecute a large percentage of Virginia’s population. A new constitution was needed. The most heinous racist provisions of the 1901 Constitution were removed and Governor Mills Goodwin managed to convince the delegates to drop the “pay go” policy that had infected prior constitutions. However, the aggrandizement of power in Richmond generally and the General Assembly in particular remained.

The history of Virginia’s constitutions has been the story of a small elite eschewing true democracy in a sad effort to keep the lives of many under the thumbs of a few. To date, progress in Virginia has only come from the barrel of a gun (1870) or the threat of federal action (1971). The present state constitution continues to thwart democracy albeit more subtly than was the case with the 1902 travesty.

In the next section of this series the many flaws of Virginia’s existing constitution will be examined.