Author Archives: afscme

Employer-Provided Student Loan Repayment Assistance Benefits

Source: John G. Kilgour, Compensation & Benefits Review, OnlineFirst, Published August 7, 2018
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From the abstract:
With 70% of recent hires being encumbered with student-loan debt, employers and employees have recently become interested in repayment assistance benefits. Since about 2015, 4% of employers and 8% of large employers have adopted such plans. An estimated 20% will have them by 2018. This article examines the background, growth and magnitude of federal and private student loans. It also examines those programs that have been adopted and gleans from them a number of questions that will help in the design and implementation of new programs by employers.

CMS’s proposed changes to outpatient services, if finalized, would hurt hospital margins

Source: Diana Lee, Daniel Steingart, Jessica Gladstone, Jonathan Kanarek, Kendra M. Smith, Peter H. Abdill, Moody’s, Sector Comment, August 8, 2018
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On July 25, The Centers for Medicare and Medicaid Services (CMS) proposed several changes to the Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System, which, if finalized, would generally be credit negative for both not-for-profit and for-profit hospitals. Changes include: (1) site neutral clinic visits, (2) expansion of 340B policy changes to off-campus departments of hospitals, and (3) adding certain nonsurgical procedures as covered procedures at ambulatory surgical centers. While on their own, these proposed changes would not be material to overall sector credit quality, the effects would vary by hospital. In general, the proposal to move certain cardiac procedures to ASCs, if finalized and if adopted by clinicians, would likely have the broadest and most significant effect on the hospital sector. Additionally, to the extent that commercial payors follow suit, each of these changes would have more meaningful effects…..

Midyear update – Higher Education – Favorable government funding and investment returns, tuition revenue pressure continues

Source: Susan E Shaffer, Susan I Fitzgerald, Kendra M. Smith, Moody’s, Sector Comment, August 6, 2018
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While our outlook for the higher education sector remains negative, 2018 growth of several revenue streams has been more favorable than anticipated. Both an improved federal research funding environment and ongoing favorable investment returns are credit positive for the sector. For public universities, overall state fiscal conditions are improving, leading to stable-to-growing appropriations for fiscal 2019. However, moving into fiscal 2019, flat enrollment — declining in certain regions of the country — and a continued focus on affordability will likely continue to limit growth in tuition and fees, the largest revenue stream supporting the sector….

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Community Colleges – Reauthorization of federal career and technical funding credit positive
Source: Patrick McCabe, Susan I Fitzgerald, Kendra M. Smith, Moody’s, Sector Comment, August 6, 2018
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On July 31, the Strengthen Career and Technical Education for the 21st Century Act (Perkins V) was signed into law, reauthorizing the Carl D. Perkins Career and Technical Education Act initially approved in 1984. This federal grant initiative, centered on state and local career and technical education (CTE), serves as an important funding source for secondary and postsecondary programs designed to align training and work-based learning opportunities with evolving workforce needs. Perkins V renews and updates the federal government’s commitment to these goals, an overall credit positive for the community college sector and community colleges’ efforts to improve cooperative education opportunities.

New York sales tax collections reach eight-year high, a credit positive for many cities and counties

Source: Robert Weber, Thomas Jacobs, Moody’s, Sector Comment, August 8, 2018
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On 1 August, the New York State (Aa1 stable) Comptroller’s Office announced that first half of calendar year 2018 sales tax collections grew 6% over 2017, the highest six-month increase since 2010. Sales tax revenues are a significant revenue stream for many counties and cities across New York, and sales tax growth also indicates that New York’s economy is improving. Additionally, the early effects of the federal tax law may be having a positive influence on people’s buying habits through the first half of 2018. As a result, these results are credit positive for many cities and counties in New York.

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Deficit financing legislation helps distressed local governments but lacks teeth
Robert Weber, Thomas Jacobs, Gregory W. Lipitz, Naomi Richman, Leonard Jones, Moody’s, Sector Comment, August 8, 2018
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New York’s (Aa1 stable) legislation allowing municipalities to issue bonds to liquidate operating deficits is an important tool for local governments mired in financial distress. However, accessing this deficit financing has produced mixed results, providing a one-time influx of cash but still leaving local governments vulnerable to poor management decisions.

Liquidity in the Municipal Bond Market

Source: Edward Friedman, Regional Financial Review, July 2018
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Although the possibility of near-term federal legislation to boost infrastructure spending is fading, the need to address the nation’s aging roads, bridges, and other public works is as pressing as ever. Financing is the sticking point. After an initial flurry of interest, no progress has occurred on so-called public-private partnerships. Inevitably, the focus has shifted back to the municipal bond market as the vehicle. Unfortunately, tax reform has hindered rather than helped the market by reducing its tax advantages. This article will provide evidence that the market is also relatively illiquid and will show how that is also an impediment. However, recent regulatory changes offer the prospect that liquidity in the form of institutional participation in the market is set to rise.

QRATE Quantitative Ratings Estimator

Source: Dan White, Sunayana Mehra, Martin Wurm and Emily Mandel, Regional Financial Review, July 2018
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QRATE is a quantitative ratings estimator designed by Moody’s Analytics to estimate municipal issuer credit quality based solely off of quantitative economic, demographic and financial metrics for a given issuer at a given time. The models cover all 11 sectors of the municipal market and allow users to calculate quantitative QSCORES based off some of the same analyst-adjusted financial data used by Moody’s Investors Service. A QSCORE is a numerical value that can be mapped to a standard letter rating equivalent, as well as estimated probability of default and loss-given-default measures.

Viewpoint: How to Talk with Nonunion Workers about ‘Right to Work’

Source: Shannon Duffy, Labor Notes, August 7, 2018

Two questions, three doors: thoughts in the closing days of the campaign to defeat “right to work.”

There’s been a lot of talk about the value of unions online and on doors this election season, and I’d like to address two questions that continue to be voiced.

The first question is why nonunion workers should vote to defeat right to work. Whenever it is raised, I often hear what is called the fair share argument. That’s the explanation where union defenders say, “What if you joined a country club or a homeowners association and you refused to pay their dues? How successful do you think you’d be trying to pull something like that? And can you honestly state that someone should have the right to do that?”

Let’s forget for a moment that it’s not a good idea to equate being in a union to being in a country club (it doesn’t exactly push back against that elitist tag that they always try to pin on us) or that substituting “homeowners association” for “country club” when talking to people on the lower end of the socioeconomic ladder isn’t really any better. No matter how you slice it, it’s still those of us who have lecturing those who don’t have about why the system shouldn’t be changed, and that’s not exactly a winning strategy.

Now, I sure don’t want to knock anyone’s hard work—and if that argument is working for you on the doors, then God bless you, and keep doing what’s working. But it seems to me that we often miss opportunities to discuss how we can challenge existing power structures and create meaningful change. So indulge me for a moment….

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Missouri Voters Overwhelmingly Reject ‘Right to Work’
Source: Chris Brooks, Alexandra Bradbury, Labor Notes, August 8, 2018

Unions in Missouri are declaring victory after voters shot down a Republican-backed “right-to-work” law by a hefty 2 to 1.

The final vote count was 937,241 against the legislation to 452,075 in favor. Missouri became the 28th state with a right-to-work law on the books in February 2017, when Republican Governor Eric Greitens signed the law at a ceremony in an abandoned factory.

In response, thousands of union members hit the streets to gather enough signatures to trigger a referendum vote that could repeal the law. Over the course of six months, activists gathered 310,567 signatures—more than three times the number needed. Right to work was put on hold until voters could decide….

A Roadmap to Rebuilding Worker Power

Source: David Rolf, The Century Foundation, August 8, 2018

What You Should Know:
– Organized labor is in decline. Today, only 6 percent of private-sector workers are represented by a union, compared to 33 percent in the 1950s.

– Yet, despite this trend, and recent setbacks in rulings by the U.S. Supreme Court and the National Labor Review Board, polls show that public support for unions is at its highest level in many years—around 60 percent.

– Young people are especially enthusiastic about the need for unions. Among adults under age 30, unions’ approval rating is an eye-popping 76 percent.

– With automation, robotics, and artificial intelligence shaping the future of work—and an increasing number of occupations becoming unmoored from the confines of current labor laws—there are growing calls to rewrite those laws for the twenty-first century.

– A strong and future-focused labor movement has the opportunity to reshape structural power dynamics for working Americans in a way not seen since the 1935 passage of the National Labor Relations Act (NLRA).

WorldatWork 2018-2019 Salary Budget Survey

Source: WorldatWork, July 31, 2018
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WorldatWork’s annual salary budget survey is the longest-running survey of its kind, delivering data and information that covers 19 countries. Now in its 45th year and reflecting 5,499 responses, compensation professionals continue to rely on the salary budget survey in making key decisions about their compensation spend. The survey data covers base salary increases, merit budgets, salary structure adjustments (U.S. only), promotional increases (U.S. only) and variable pay plans (U.S. only).

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