by Nathaniel Cline, Virginia Mercury
April 4, 2023

As teacher shortages continue in Virginia, the state is attempting to stave off further educational impacts by granting more provisional licenses. 

The commonwealth issued a total of 8,434 provisional licenses in 2021-22 compared to an average of 6,787 in the years before the COVID-19 pandemic, according to a November report from Virginia’s Joint Legislative Audit and Review Commission, which conducts analysis and provides oversight of state agencies on behalf of the General Assembly.

The Virginia Education Association, the state’s teachers union, has said the exodus of teachers, including highly qualified educators, is connected to low wages, increased workloads and politicized work environments.

“For a long time in Virginia, teachers with short-term provisional licenses have played an important role, and this is a totally viable pathway, eventually becoming a fully licensed teacher,” said Chad Stewart, policy analyst for the Virginia Education Association. “But the way this licensure is working now — given the magnitude of provisionally licensed teachers that we have — doesn’t necessarily match how it was envisioned.”  

Provisional licenses are short-term, nonrenewable licenses granted by the Virginia Department of Education for teachers who haven’t met all of the state requirements to teach but still have some qualifications.  

For example, people who have a bachelor’s degree from an accredited college or university but didn’t take education courses would not meet the department’s requirements for a standard teaching license. However, they could seek a provisional license.

The department also grants licenses to “out-of-field” teachers who have not yet completed their coursework or certification in the content area they are teaching.  

In Virginia, provisionally licensed teachers have addressed shortages left behind by teachers. The November JLARC report found school divisions statewide have become more reliant on provisionally licensed teachers, with approximately 7.7% of all teachers being provisionally licensed before the pandemic and 9.5% falling in that category in 2021-22. 

“This represents an unusually large change to the proportion of teachers with a provisional license, which did not exceed 8.3 percent in any previous year examined,” the commission wrote. 

Virginia’s teacher vacancy rate increased from 3% in 2021-22 to 3.8% as of Oct. 1, according to the Department of Education. The data includes both licensed and unlicensed teachers. Special education has had the highest vacancy rate at the start of the past two school years.

Although the Virginia Education Association has in the past found vacancy rates to be higher in high-poverty and rural school divisions, it says vacancy rates at nonrural schools are now on par with those in other school divisions.

The role of provisional licensing

Both the Virginia Association of Superintendents and Virginia Education Association support provisional licensing. Scott Brabrand, executive director for the superintendents association, said in an email to the Mercury that the option is “another tool for school districts to use as needed.”

However, a teacher who has not completed specific teaching coursework is more likely to be less effective than a fully licensed teacher, according to the November JLARC report.

“Full licensure is important because it requires coursework related to methods of teaching (pedagogy), which contributes to teacher effectiveness at all grade levels,” JLARC wrote. 

Stewart said it’s vital for teachers to have experience with pedagogical thinking, or the ability to think while instructing, and knowledge of how to design and sequence lessons to best help students retain knowledge. Without training in classroom management skills and student preparation, there are concerns about how successful provisional teachers can be.

“We’re not saying it’s not a viable pathway and it shouldn’t be out there for some folks that are really interested in pivoting into the teaching profession,” Stewart said. “But what we’re seeing now with thousands of new people entering into these roles is very concerning because it seems to be plugging the gap for [the] teacher shortage crisis that has gotten so bad in this state, and this masks the magnitude of how bad it’s gotten.”

Curbing teacher shortages

As school leaders around the state struggle to find ways to address teacher shortages, Arlington Public Schools has turned to a 2019 law creating an alternative route for teacher licensing.

That legislation, carried by Del. Roxann Robinson, R-Chesterfield, required the Board of Education to grant special consideration to people seeking a provisional license who have completed a program offered by a program accredited by the Council for the Accreditation of Educator Preparation. 

Del. Patrick Hope, D-Arlington, had backed a similar proposal aimed at helping Arlington Public Schools’ Montessori Program — the only Montessori program in Virginia’s public schools — address teacher shortages. Montessori schools are based on the educational theories of Maria Montessori and focus on more hands-on, student-directed learning than traditional classrooms usually offer.

At the time, Arlington’s program was having to turn away many experienced candidates because they lacked a Virginia teaching license and a Montessori credential.

“We were already feeling some of that pressure because the requirements to have a Montessori credential and a public school license in Virginia was already challenging,” said Monique O’Grady, a former school board member in Arlington.

The 2019 law required the State Board of Education to create a process that would let a school board or organization sponsored by a school board like the Montessori program ask the board to approve an alternate route for teachers to meet the requirements for a provisional or renewable license. That route could include “alternatives to the regulatory requirements for teacher preparation, including alternative professional assessments and coursework.” 

Arlington proposed that candidates be eligible for a provisional teaching license if they hold at minimum a bachelor’s degree from an accredited college or university and a credential issued by an institution accredited by the Montessori Accreditation Council for Teacher Education while having successfully passed Virginia’s required Praxis tests in their specific area.

The board granted Arlington’s request on March 23.

“Montessori teaching is already under such demand that the pool is already small,” said O’Grady. “Any barrier that makes it harder for a teacher to come into Virginia to teach makes it harder for us to fill that position, and I think that’s really what we were fixing.”

Legislative and administrative efforts

Other bills passed during the 2022 and 2023 sessions have tried to give the state’s provisional licensing system more flexibility.

Last year, lawmakers allowed the Board of Education to temporarily extend certain teacher licenses by two years and issue a three-year provisional license to people with non-U.S. teaching licenses or certifications. 

During the last session, lawmakers also gave the board authority to extend provisional licenses by up to two years based on a satisfactory performance evaluation and a superintendent recommendation. 

But provisional licensing isn’t the only solution policymakers are eyeing to get teachers in the classroom.

Recent legislation carried by Del. Carrie Coyner, R-Chesterfield, and Sen. Louise Lucas, D-Portsmouth, looks to retired school employees to address the teacher shortage.

Under existing law, Coyner said retired instructional and administrative employees, specialized student support employees and bus drivers with at least 25 years of service cannot return to work until a year after their retirement without jeopardizing their pension benefits.

The new legislation shortens that time period from one year to six months, allowing retired teachers to return to the classroom to fill vacancies more quickly.

Coyner said she pushed for reducing the break in service to one month but compromised at six months. Other proposals by Sen. Creigh Deeds, D-Bath, and Del. Rob Bell, R-Albermarle, would have reduced the return to work by three months. A different version of Deeds’ bill later passed.

Still, she said she is optimistic the legislation will help address shortages, since many retired school employees are seeking work.

“There are stories all over the commonwealth about children sitting in classrooms with long-term subs, who are very nice and are hardworking, but they don’t have the qualifications of a teacher and we should be doing everything we can to solve that,” Coyner said to the Mercury.

In hopes of getting retired employees into schools faster, the legislation also included language directing VRS to study whether retired school employees can return to work earlier than six months. The report is due to the House and Senate finance committee chairs by Nov. 1.

Meanwhile, proposals to improve teacher compensation and provide additional training and professional support to educators failed.

During a CNN town hall last month, Gov. Glenn Youngkin admitted that Virginia teachers are underpaid and touted lawmakers’ inclusion in the state budget of 10% raises for teachers over the next two years. Still, some education groups say the increases would leave Virginia teacher salaries below pre-pandemic pay levels due to inflation, as well as below the national teacher pay average. VEA said the House and Senate’s proposed 7% budget proposal would get teachers back to levels from 2019-20.

In 2022-23, the average teacher salary nationwide is $67,885 compared to Virginia’s $62,963, according to the VEA. The nationwide rate is expected to increase to $69,343 in the 2023-24 school year. 

In September, Youngkin directed the Superintendent of Public Instruction to “use all discretion within law to issue teaching and renewal licenses, including to teachers licensed in another state and retired teachers whose licenses may have lapsed.”

The Department of Education responded by launching the Become a Teacher and Turning the Tide campaigns, which aim to reduce barriers for qualified people to enter the profession, increase the number of candidates eligible to fill hard-to-staff positions and improve recruitment and retention strategies.

JLARC is also reviewing the teacher pipeline, with a report expected in the early fall.

Virginia Mercury is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Virginia Mercury maintains editorial independence. Contact Editor Sarah Vogelsong for questions: info@virginiamercury.com. Follow Virginia Mercury on Facebook and Twitter.

by Casey Quinlan, Virginia Mercury
December 12, 2022

Starting next month, a $35 cap on insulin prices will go into effect for millions of Medicare recipients. The lower pricing is one of the first of several policy measures Americans will see in the coming months and years under the Inflation Reduction Act signed into law in August.

The bill also requires pharmaceutical companies to pay Medicare rebates for drugs where prices surpass inflation for Medicare Part D and mandates that the government negotiate drug prices on some prescription drugs for people who have Medicare — the first time Medicare has been given that power. While it’s unclear how many people will ultimately benefit from the various changes, 49 million people are enrolled in Medicare Part D plans, according to the Kaiser Family Foundation. 

The Medicare Part D rebates began in October. That same month, Medicare also began paying more for some biosimilar drugs to create more competition, lower the cost and improve access to those drugs for consumers. Biosimilars are drugs that are very similar to an existing drug and have an average sales price that isn’t higher than that of the other drug. 

The insulin cap that goes into effect next month benefits Medicare Part D recipients, who also no longer have to meet a deductible on their insulin. A $35 monthly cap on insulin for recipients who use insulin pumps and are covered under Medicare Part B’s durable medical equipment benefit goes into effect July 1, according to the Centers for Medicare and Medicaid Services.

Richard Frank, senior fellow in economic studies and director of the University of Southern California-Brookings Schaeffer Initiative on Health Policy, said there are a couple reasons that the law reduces the cost for insulin before other measures.

“The whole history of health reform in this country is that you really want to try to frontload real benefits to real people. And insulin, because of the relative technical simplicity, is a great place for that right away. You give sick people who really need the help, and where there’s been a lot of crazy cost-sharing for patients, earlier, so the benefits of the legislation start to become apparent pretty quickly,” he said.

Medicare patients spent $1 billion on insulin in 2020, according to Kaiser Family Foundation, and an estimated 16.5% of people with diabetes rationed their insulin in the past year, which can be extremely harmful to their health, according to an Annals of Internal Medicine article published in October.

But the Health and Human Services Department’s process for negotiating drug prices will take much longer. This process will apply to certain types of drugs, including biologics, or drugs that come from biological sources like sugars or proteins that don’t have generic or biosimilar competitors, or brand-name drugs for which the company holds the patent, known as single-source drugs. Here’s the timeline:

In September, Centers for Medicare and Medicaid Services will list the 10 Part D drugs whose negotiated prices will take effect in 2026. Negotiations will begin in October and end in August 2024, according to Kaiser Family Foundation’s timeline.  Another round of negotiations for 15 Part D drugs will start in February 2025 and end November 2025, with prices to take effect in 2027. The negotiation process for 15 Part D or Part B drugs wull start in 2026, and prices will go into effect in 2028. In 2027, 20 Part D or Part B drugs will be announced, and in 2029, those prices will hit consumers.  In 2028, 20 more Part D and Part B drugs will be chosen to be fully implemented in 2030. The last round of 20 Part B and D drugs prices will be seen in 2031.

“The bill is designed to have Medicare negotiate for the drugs that have the highest aggregate spending, so it really does give you the most bang for the buck,” said Emily Gee, vice president and coordinator for health policy at the Center for American Progress. 

The price changes should start to have a real impact on Americans in 2026. “They’ll get roughly a 30% haircut on that deductible portion of their drug in a lot of cases. Most people would notice that,” Frank said. 

According to an analysis of the impact of the Inflation Reduction Act from the Center for American Progress, an elderly middle-class couple living in Pittsburgh in which one person is diabetic and takes insulin could save $575 on insulin each year starting next year, and as much as $2,430 each year for their household — because of the $2,000 limit on annual out-of-pocket costs — beginning in 2025.

How will pharma respond?

A U.S. Department of Health and Human Services report released in September showed drug companies increased prices for several drugs by more than 500% between 2016 and 2022, and some experts worry that pharmaceutical companies could find loopholes in the new law.

Juliette Cubanski, deputy director for the program on Medicare policy at the Kaiser Family Foundation, said there may not be very much drug companies can do to stop being selected for the first negotiation process at this point. But in general, they could try to put up barriers to implementation, such as raising legal challenges against the law. Cubanski said one other response could be higher launch prices for new drugs. 

“That’s just one of those side effects from this legislation that we can’t really control in this country because we don’t have any sort of organized approach to setting the price of drugs the way that other countries do,” Cubanski said. “The Inflation Reduction Act provisions are expected to be helpful at constraining the growth in drug prices for existing drugs, but (the law) doesn’t have any provisions in it to limit the level at which drug prices are set for new drugs coming to market.”

The government can only negotiate for drugs that have been on the market for a certain number of years – nine years for small molecule drugs, typically pills, including some cancer treatments, and 13 for biologics, which use living cells and are difficult and more expensive to manufacture.

“I think there is an effort by pharmaceutical companies to bring innovative products to the market because there is, I think, a recognition among the pharmaceutical industry that that is where they have kind of the upper hand in prices and price negotiations — when we’re talking about drugs that are truly unique and innovative and don’t have competitor products,” Cubanski said.

She added that the possibilities of how drug companies could respond are largely unknowable at this point, however, because there is still so much to be done on the policy level. 

They could also try to take their financial burden to the private insurance market or use citizen petitions to try to halt generic drugs from being approved by the FDA, at least for a while, NBC News reported. 

Gee said she sees those messages about cost-shifting or raising launch prices as a scare tactic from pharmaceutical companies and said there isn’t really anything holding them back from raising prices now.

“But there’s very little discipline for them now because the market is so concentrated,” she said. “If they could raise their price another $10, why wouldn’t they do that now? It’s hard to see why they would be leaving money on the table today.”

Virginia Mercury is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Virginia Mercury maintains editorial independence. Contact Editor Sarah Vogelsong for questions: info@virginiamercury.com. Follow Virginia Mercury on Facebook and Twitter.

Virginia Elections Commissioner Susan Beals checks in at the Chesterfield County elections office on the first day of early voting. (Photo by Graham Moomaw/Virginia Mercury)

‘I have faith in our election officials and their commitment to their profession’

By Graham Moomaw, Virginia Mercury
September 26, 2022

As a woman in a purple blazer lined up to cast a ballot on the first day of early voting in Chesterfield County, one election worker nudged another and said: “She’s the boss.”

It took less than 10 minutes for Susan Beals, Virginia’s new commissioner of elections, to vote early in Chesterfield, the Richmond-area suburb where she served as a local electoral board member before Gov. Glenn Youngkin appointed her to the state’s top election job. 

There were no problems as she showed her ID, had a ballot made in front of her by one of the on-demand ballot printers many cities and counties are adopting for early voting, filled it out and fed it into a scanner as one of the first few dozen midterm votes cast in her home county.

While a significant number of her fellow Republicans continue to stoke doubts about the 2020 election, Beals, a 47-year-old former GOP aide, said in an interview she’s confident in the election process she’s overseeing at the state level for the first time.

“We have a dependable system in Virginia,” said Beals. “We can always make process improvements, and that’s something that I’m committed to.”

Beals said “people are entitled to have questions” about the process, but the answers are readily available.

“Find somebody who knows the answer,” she said. “Seek out an election official and ask them how the process works. Because most of them would be very happy to tell you.”

Beals, who served on the Chesterfield electoral board for several years before Youngkin picked her in March to lead the state agency, has had other important business on her plate that doesn’t involve actual voting, like taking over an ongoing information technology project to replace the state’s voter system. She’s also been preparing an outreach campaign to inform voters about the impacts of redistricting, an initiative that will involve roughly 6 million voter notices that should hit mailboxes early this week.

But the start of the 45-day early voting window on Friday, in a year when Virginia will have at least two hotly contested congressional races on the ballot, will cast a new spotlight on how Youngkin’s administration will handle the work of running elections.

Beals praised the thousands of election officers across Virginia who are getting to work helping people vote, calling them “patriotic Americans” who are “committed to making democracy work.” Asked if she believes those sowing mistrust about elections are making that job harder, Beals said “there’s a lot of scrutiny of elections right now.”

“But everything I have seen from election officials is that they are conducting themselves professionally,” she said. “I have faith in our election officials and their commitment to their profession and their commitment to their communities.”

Asked how she feels about the “election integrity” unit Attorney General Jason Miyares recently announced, which has drawn backlash from Democrats who say it feeds into conspiracy theorizing about stolen elections, Beals characterized it as fairly routine.

“To me that’s a normal relationship that we have,” she said. “They provide advice. If there is something that needs to be investigated, our board will vote to turn it over to the AG and ask them to investigate it.”

Virginia Republicans failed to repeal or scale back voting reforms Democrats passed two years ago when they had full political control, meaning the 45-day early voting window and the law making photo IDs optional will still be in place for Virginia’s midterms. 

The major change to state election policy this year is same-day registration, a policy Democrats passed in 2020 with a delayed effective date of October 2022. The new policy allows people to continue to register and cast a provisional ballot after the regular voter registration period closes Oct. 17. 

Beals said she’s not encouraging potential voters to put things off to take advantage of that new law, because registering in advance remains the easiest voting experience. Anyone casting a provisional ballot won’t be feeding it into the scanners as other voters do, she said, because election officials have to take time to research whether the person is a valid voter or not.

“I would very much prefer that everyone who wants to vote in this election try to get registered before October 17,” Beals said. “Because we want you to vote a regular ballot.”

Youngkin talks elections in Texas

As early voting got underway, the man who hired Beals was taking a stage in Austin at the Texas Tribune Festival, where the topic of Republican election denialism came up as Youngkin sat for an interview at the high-profile political event.

David M. Drucker, a political correspondent with the Washington Examiner, asked Youngkin about his planned campaign stops for Republican candidates like Kari Lake, the GOP nominee for governor in Arizona who insists, falsely, that former President Donald Trump won in 2020. 

“You are comfortable supporting Republicans that have issues or dispute the outcome of the last election?” Drucker asked.

“I am comfortable supporting Republican candidates. And we don’t agree on everything,” Youngkin replied. “I have said that I firmly believe that Joe Biden was elected president.”

Closer to home, Sen. Amanda Chase, R-Chesterfield, who has spread 2020 conspiracy theories without producing evidence of widespread fraud in Virginia’s election, has called on Youngkin to suspend the use of all “voting computers” in Virginia and switch to hand-counting all ballots.

There’s been no sign the Youngkin administration is taking her suggestion seriously, and the state usually avoids making major changes just as an election is beginning.

Paper ballots are used throughout Virginia after the state discontinued the use of touch-screen voting machines in 2017 due to security concerns.

Beals, who once worked as an aide to Chase, called paper ballots “one of the most secure ways to vote” and indicated she had no problem with the state continuing to use scanners that are routinely tested for accuracy.

“It is a counting machine,” Beals said. “It is not a voting machine. It is a machine that counts ballots.”

As Beals waited for a coffee at a Starbucks near the Chesterfield voting office, she got a text message from her predecessor. Former elections commissioner Chris Piper, whom Youngkin chose not to keep in the job, wished her well as her first election got underway.

“You got this!” Piper said.

Virginia Mercury is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Virginia Mercury maintains editorial independence. Contact Editor Sarah Vogelsong for questions: info@virginiamercury.com. Follow Virginia Mercury on Facebook and Twitter.

by Graham Moomaw, Virginia Mercury
September 22, 2022

After past redistricting cycles, the number of Virginia General Assembly members having to switch districts was kept to a minimum because legislators were allowed to draw careful lines around each other’s homes to avoid doing damage to incumbents.

That wasn’t the case last year, when experts appointed by the Supreme Court of Virginia effectively reset the state’s legislative maps with little regard for keeping incumbents comfortably installed in conflict-free seats. That means an unusually high number of legislators are facing the prospect of moving to position themselves for the next election cycle.

Those maps are also drawing new attention to a little-known provision in the Virginia Constitution that says any delegate or senator who moves out of their current district to run in a new one automatically forfeits the office they hold. But legislators also have to prove their residency in the new districts in order to qualify as valid candidates, a process that takes place long before the current legislative terms are over.

With the electoral landscape still taking shape for the high-stakes 2023 General Assembly elections, when all 140 state legislative seats will be on the ballot, there have been no residency challenges yet. Still, the question of how the constitutional rule might affect the legislature next year is already being discussed in hushed tones around the Capitol.

“I think it’s making some people nervous,” said Del. Mark Sickles, D-Fairfax.

Under the new maps approved last year, half of the state’s 40 senators were drawn into a district with one or more other senators, according to analysis by the Virginia Public Access Project. In the House, 44 of 100 delegates were paired with at least one colleague. Some of those pairings have already been resolved, partly because the maps also created dozens of new districts with no incumbent. Legislators paired with each other have a few basic options: a head-to-head election matchup with a colleague, resignation or running for a different seat.

Due to the uncertainty over which specific members the rule could impact, some legislators and aides seemed reluctant to discuss the issue candidly.

“I’ll just say I’m aware of it,” House of Delegates Speaker Todd Gilbert, R-Shenandoah, said with a smile in a brief interview on the House floor earlier this month.

The issue has also been raised in Senate Democratic Caucus meetings as something members should be aware of as they make plans for next year.

Unlike members of Congress, Virginia General Assembly members are required to live in the districts they serve or are running to represent. And the state constitution is clear on what happens if someone moves out of their district.

“A senator or delegate who moves his residence from the district for which he is elected shall thereby vacate his office,” the key section says.

That rule came into play in 2015, when then-Del. Joe Morrissey filed paperwork to run for the state Senate that listed a Richmond address outside his Henrico County-based district. At the time, Morrissey, now a state senator, agreed to vacate his former office and allow a special election to take place, but said he would continue to serve his constituents in an unofficial capacity out of his law office.

Over the next six months, an errant move by a lawmaker or an intentional decision to step down early could have a similar impact. Significantly, an empty seat could deprive a political caucus of a vote in the 2023 legislative session, even if the person who vacated it might go on to win and return in 2024 from another district. 

It won’t be a problem for General Assembly members who move to run in a new district without leaving their current one. For example, Democratic Sen. Creigh Deeds is able to move from rural Bath County to Charlottesville to run in a redrawn district, because Charlottesville is part of the area he represents now.

“They just have to move to an overlapping area,” said Jeff Ryer, a longtime Senate GOP aide. “And I cannot recall a circumstance where there was not an overlapping area.”

The new districts for 2023 are strikingly different than they have been thanks to the redistricting reform amendment Virginia voters approved in 2020. The overhauled redistricting process led to maps being drawn by court-appointed experts instead of incumbent legislators who could protect themselves by maintaining the status quo as much as possible.

It’s difficult to track which lawmakers live where at any given moment, because General Assembly members aren’t required to file that information on a real-time basis.The full scope of the reshuffling may not become clear until next spring, when General Assembly candidates have to file campaign paperwork listing an address in the district that matches their voter registration records. That deadline usually falls in late March, after the General Assembly has finished its regular session but before lawmakers reconvene to take up vetoes and amendments from the governor.

“You may have some folks that have to decide how badly do you guys really need me at reconvene,” said Del. Marcus Simon, D-Fairfax.

Even though the law is fairly clear, controversies about political figures’ residency are often clouded by ambiguity. Lawmakers can have multiple homes, and it can be difficult to find out whether an address listed on official paperwork is truly where they’re spending most of their time.

Questions were raised last year about whether Republican candidate Mark Earley Jr. really lived in the Richmond-area House district he was running in, according to the Richmond Times-Dispatch. But a special prosecutor cleared him of wrongdoing after concluding Earley had made a simple paperwork mistake by not disclosing the house he owned outside the district as he moved in with his parents to run for the seat.

Mandatory financial disclosure forms General Assembly members have to file each year require legislators to disclose real estate holdings, but they don’t have to report their “principal residence.” The forms, which are overseen by the Virginia Conflict of Interest and Ethics Advisory Council, also advise state and local elected officials not to list exact addresses for their real estate holdings. However, that information can usually be obtained through searches of local property records.

The General Assembly’s two clerks, who oversee the legislature’s administrative side, keep lawmakers’ home mailing addresses on file. But there’s nothing requiring lawmakers to notify the clerks when they move. And the lists kept by the clerks aren’t made public.

“It’s considered a personnel record,” said House Clerk G. Paul Nardo.

Virginia Mercury is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Virginia Mercury maintains editorial independence. Contact Editor Sarah Vogelsong for questions: info@virginiamercury.com. Follow Virginia Mercury on Facebook and Twitter.

by Graham Moomaw, Virginia Mercury
September 6, 2022

Virginia’s tax revenues from sports betting jumped 63% between June and July after state lawmakers ended what some described as a loophole that let betting apps deduct free-bet promos from their profits.

According to Virginia Lottery reports, sports betting revenues rose from $1.87 million in June to $3.06 million in July, the first month the new tax policy was in effect.

The stronger tax revenues came despite a summertime dip in wagering on sports, with about $266 million wagered in July compared to $295 million in June.

When Virginia legalized sports betting in 2020, the legislation approved by the General Assembly allowed betting apps to essentially write off money they spent on free-bet promotions to attract new bettors. In other words, the more free bets the companies were offering to grow their business, the less they would have to pay to the state in taxes.

After learning some betting platforms were producing little to no tax revenue, Del. Mark Sickles, D-Fairfax, pushed to end the exemption. The change was part of the state budget approved early this summer and took effect July 1.

“It’s just turning out great,” Sickles said in an interview Friday.

The increase wasn’t solely attributable to the tax change. Some of it was a result of the apps having to pay out less in winning bets. But lottery data show sports betting platforms deducted about $8 million from their June revenues for free-bet promos. In July, that fell significantly to $0.4 million.

At the start of the year, only four of 11 sports betting operators reported positive gross revenues subject to taxation. In July, eight of 14 operators reported positive revenues, which Sickles called “a big improvement.”

“People enjoy it,” Sickles said. “It’s a different kind of bettor. People that do this don’t do any other type of gambling. A lot of them.”

The tax change drew some pushback from the sports betting industry, which argued the hastily approved provision would create confusion and limit growth.

In a statement, Bea Gonzalez, a lobbyist for the Virginia Sports Betting Alliance, criticized the change for being passed “with no public debate or discussion” and no hearing in a legislative committee. She called the change “a shortcut to slightly higher revenues” that will come at a cost to future revenues for the state from a stronger sports betting market.

“The short-term benefit to the state is at the cost of long-term revenue,” Gonzalez said. “Operators won’t offer as many promos as they have in the past, and the ultimate size of the legal market will be smaller than it otherwise would be.”

The change doesn’t prevent the platforms from doing free bet promos, but it makes it more costly for the companies to offer them.

Under Virginia’s sports betting law, the state taxes 15% of each betting platform’s adjusted gross revenues, essentially the amount left over after paying out winning bets. Most of that tax money goes into the state’s general fund, with 2.5% set aside for a fund meant to help people addicted to gambling.

Though most of the state’s sports betting operators are online-only, Virginia’s first brick-and-mortar sportsbook recently opened as part of Bristol’s Hard Rock Casino & Resort.

Virginia Mercury is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Virginia Mercury maintains editorial independence. Contact Editor Sarah Vogelsong for questions: info@virginiamercury.com. Follow Virginia Mercury on Facebook and Twitter.

by Sarah Vogelsong, Virginia Mercury
August 10, 2022

The Virginia Department of Corrections is investigating a rash of potential overdoses and a death at the privately run Lawrenceville Correctional Center in Brunswick County. 

Christopher Ferreira, a spokesperson for The GEO Group, the prison operator, confirmed Wednesday that one inmate died Aug. 6 after prison staff “observed several inmates who appeared to be lethargic and unresponsive.” 

“Medical assistance was immediately called and the affected inmates were administered emergency care to stabilize their condition before being transported to the local hospital as a precautionary measure,” he wrote in an email.

Ferreira said the matter “is currently under investigation by the Virginia Department of Corrections.” 

“GEO considers the health and safety of those entrusted to our care to be our primary mission and we will take any and all necessary steps to ensure that the circumstances surrounding this tragic situation are promptly and thoroughly addressed,” he said.

The apparent overdoses were first publicly flagged Tuesday night by the Virginia Interfaith Center for Public Policy, a nonprofit that advocates for racial, social and economic justice. 

King Salim Khalfani, a criminal justice reform organizer with the center, said he was told nearly a dozen inmates suffered overdoses over the last few days.

“This is an ongoing problem throughout the years,” said Khalfani. 

Details of the recent incident have been scarce. Asked about the reports by Virginia Interfaith, Virginia Department of Corrections Director of Communications Benjamin Jarvela referred the Mercury to the GEO Group. 

After the GEO Group confirmed the Department of Corrections was investigating the incident, Jarvela said the agency had “no comment on any active investigations.” 

Neither the GEO Group nor the Department of Corrections answered questions about what kind of drugs may have been involved in any overdoses, how those drugs got into the facility and how many inmates were affected.

The Lawrenceville Correctional Center is Virginia’s only privately run prison and has sparked debate among legislators in recent years. In 2021, Sen. Adam Ebbin, D-Alexandria, proposed legislation to bring the facility under state management, but the bill was defeated in committee.

GEO Group has been fined more than $700,000 by DOC since 2018 for failing to maintain staffing levels required under its contract with the state.

In 2020, the General Assembly ordered the agency to study the costs of the state terminating its contract with GEO and assuming management of Lawrenceville. The current contract was awarded in July 2018 is scheduled to expire July 1, 2023, although there are annual options to renew the contract for an additional 10 years.

That study found that transferring management to the state would increase the facility’s operating costs by $9.3 million above current spending levels, primarily because the Department of Corrections employs more staff and pays those staff more than the private operator. Under GEO Group, the per capita cost per day at Lawrenceville was $51.55, “nearly 49 percent lower than comparable VADOC facilities.” 

However, the study noted, “even at this increased cost, Lawrenceville would still be significantly less expensive to operate than other VADOC Level 3 (medium security) facilities.” 

Virginia Interfaith on Tuesday urged the Virginia Department of Corrections to cancel its contract with GEO and take over management of Lawrenceville, citing “a documented pattern of drug overdoses and deaths” at the facility, as well as other problems. The group said it intends to release a report on violations at the facility at the end of the month. 

Khalfani said he has “been getting complaints for years” about Lawrenceville and contended that many problems are linked to allowing a private operator to run a prison for profit. 

“It just doesn’t seem right,” he said. “Corrections isn’t a for-profit industry.” 

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