Governor McDonnell, at VEA's request, stepped up in the reconvened session (veto session) yesterday to protect you from having to pay a employee contribution to VRS of up to 5%.
The House voted to support the Governor's amendment with only Cole, Greason, Landes, Loupassi, Massie, Stolle and Lee Ware voting wrong. The Senate adopted the amendment unanimously in a block of amendments.
Many thanks for all you did - writing the Governor, and then your delegate and senator to protect the take-home pay of school employees.
From my perspective, this is a significant legislative victory in tough times. FYI, we had a press conference yesterday to thank the Governor.
Thursday, April 22, 2010
Monday, March 15, 2010
VRS Update
I had earlier reported that school board employees would not have to make the employee contribution to VRS. I was reporting on what was in HB1189.
The budget that was released yesterday includes language giving school boards and localities the option of requiring current employees to pay a portion of the 5% employee retirement contribution. It allows your school board to elect any whole % up to 5%.
This provision in the budget singles our local government employees and do not affect state employees.
The budget that was released yesterday includes language giving school boards and localities the option of requiring current employees to pay a portion of the 5% employee retirement contribution. It allows your school board to elect any whole % up to 5%.
This provision in the budget singles our local government employees and do not affect state employees.
Sunday, March 14, 2010
Senate Stood Strong/Sine Die!
The report of the Budget Conference Committee reflects substantial movement toward the Senate’s support for PreK-12 public education.
Governor Kaine’s introduced budget cut public education funding by $800 million. The House would have added $685 million in cuts and the Senate would have cut $114 million. The conference report had to come in between those two figures – that’s the nature of the game.
The Senate hung tough! Senator Edd Houck was chief negotiator for the Senate for education. Senators Colgan and Saslaw joined him from the Democratic side of the aisle. Republican Senators Stosch, Norment and Wampler stood tough for public education as well – supporting the Senate position. This bipartisan support in the Senate made a tremendous difference. Governor McDonnell helped pressure the House to move in the Senate’s directions as well.
The Senate prevailed, sparing At-Risk programs from cuts and saving the funds for planning time.
When the conference committee reported, the cuts to PreK-12 were $253 million. The Senate moved $139 and the House moved $432 million.
Because the Senate hung tough, state support for 12,118 positions will be retained.
Even though this news is good, we must remember that the budget voted on this evening will cut PreK-12 funding by over $1 billion dollars.
If you look at state funding for the 2008-2009 school year, the state provided $6.3 billion. For the 2010-2011 school year the state will provide $5.5 billion. This is a 12.5% cut that does not take increased enrollment or inflation into account. The cuts are severe.
Thanks to the Senate for keeping it from being much worse.
I love the words Sine Die!
Governor Kaine’s introduced budget cut public education funding by $800 million. The House would have added $685 million in cuts and the Senate would have cut $114 million. The conference report had to come in between those two figures – that’s the nature of the game.
The Senate hung tough! Senator Edd Houck was chief negotiator for the Senate for education. Senators Colgan and Saslaw joined him from the Democratic side of the aisle. Republican Senators Stosch, Norment and Wampler stood tough for public education as well – supporting the Senate position. This bipartisan support in the Senate made a tremendous difference. Governor McDonnell helped pressure the House to move in the Senate’s directions as well.
The Senate prevailed, sparing At-Risk programs from cuts and saving the funds for planning time.
When the conference committee reported, the cuts to PreK-12 were $253 million. The Senate moved $139 and the House moved $432 million.
Because the Senate hung tough, state support for 12,118 positions will be retained.
Even though this news is good, we must remember that the budget voted on this evening will cut PreK-12 funding by over $1 billion dollars.
If you look at state funding for the 2008-2009 school year, the state provided $6.3 billion. For the 2010-2011 school year the state will provide $5.5 billion. This is a 12.5% cut that does not take increased enrollment or inflation into account. The cuts are severe.
Thanks to the Senate for keeping it from being much worse.
I love the words Sine Die!
Saturday, March 13, 2010
Where do we stand on VRS issues?
The conferees were very close to agreement this morning. The good news is that your efforts have paid off, and the House has moved substantially toward the Senate position in regard to PreK-12 funding. Both chambers reconvene at 5 p.m. Sunday to take up the budget conference report, but anything can happen.
As we await final action on the budget, I thought it a good time to review the final action of the General Assembly in regard to changes to the Virginia Retirement System (VRS) benefit structure. VEA’s extensive efforts to warn members of the proposals being considered and to educate members on retirement issues paid off. Our members lobbied effectively to prevent a shift away from a traditional pension to a personal risk account. And they lobbied to prevent degradation of the current benefit structure. We did not win on all accords, but we won more of the battles than we lost by a long shot.
The good news is that strong “grandfathering” language protects the benefits of current VRS members. Delegate Putney’s language in this regard was far superior to that of the Governor in the introduced budget. The changes only affect future hires. The bad news is that we are moving to a two-tiered system which will provide reduced retirement benefits to future hires (those hired after July 1, 2010 with no prior VRS service).
School boards will have the authority to require new hires to pay from 1 to 5 percent of their credible compensation toward their VRS account. Sparing current employees from this provision is a huge victory!
The current normal retirement age, 65, is changed for employees hired after July 1, 2010, to the date for retirement under Social Security (either 66 or 67 years).
Future hires will come under the “Rule of 90” to determine the early retirement date with unreduced benefits. Under the “Rule of 90,” experience and age must add up to 90 to qualify for an unreduced retirement benefit (example: 59 years of age with 31 years of experience, 59 + 31 = 90). The “Rule of 90” replaces the current 50 years with 30 years of experience threshold. Currently, the age/service eligibility is 50/30.
For new hires “average final compensation’ (AFC) will be the average salary for the 60 highest consecutive months of service. (Currently AFC is computed on the 36 highest consecutive months.)
New hires will purchase prior service credit at the “normal” retirement rate during the first year of service, and at the actuarial rate after that. The VRS Board of Trustees will set the “normal” rate. The window for current employees is three years and the current purchase rate is 5%.
Caps the Cost of Living Increase (COLA) for employees hired after July 1, 2010, at a maximum of 6 percent (recognizes the first two percent of inflation plus one-half of the next 8 percent). The current COLA recognizes the first three percent, plus one-half of each of the next 4 percent (5 percent cap). The change in the COLA moderates COLA increases in periods of low to moderate inflation, but allows for greater increases in periods of higher inflation.
The VRS multiplier stays at 1.7% for all employees. This is a major victory. There was an effort to reduce the multiplier for new hires to 1.65%.
We’ll have to see if there are amendments proposed in the veto session.
We could have done much worse. Your work paid off!
As we await final action on the budget, I thought it a good time to review the final action of the General Assembly in regard to changes to the Virginia Retirement System (VRS) benefit structure. VEA’s extensive efforts to warn members of the proposals being considered and to educate members on retirement issues paid off. Our members lobbied effectively to prevent a shift away from a traditional pension to a personal risk account. And they lobbied to prevent degradation of the current benefit structure. We did not win on all accords, but we won more of the battles than we lost by a long shot.
The good news is that strong “grandfathering” language protects the benefits of current VRS members. Delegate Putney’s language in this regard was far superior to that of the Governor in the introduced budget. The changes only affect future hires. The bad news is that we are moving to a two-tiered system which will provide reduced retirement benefits to future hires (those hired after July 1, 2010 with no prior VRS service).
School boards will have the authority to require new hires to pay from 1 to 5 percent of their credible compensation toward their VRS account. Sparing current employees from this provision is a huge victory!
The current normal retirement age, 65, is changed for employees hired after July 1, 2010, to the date for retirement under Social Security (either 66 or 67 years).
Future hires will come under the “Rule of 90” to determine the early retirement date with unreduced benefits. Under the “Rule of 90,” experience and age must add up to 90 to qualify for an unreduced retirement benefit (example: 59 years of age with 31 years of experience, 59 + 31 = 90). The “Rule of 90” replaces the current 50 years with 30 years of experience threshold. Currently, the age/service eligibility is 50/30.
For new hires “average final compensation’ (AFC) will be the average salary for the 60 highest consecutive months of service. (Currently AFC is computed on the 36 highest consecutive months.)
New hires will purchase prior service credit at the “normal” retirement rate during the first year of service, and at the actuarial rate after that. The VRS Board of Trustees will set the “normal” rate. The window for current employees is three years and the current purchase rate is 5%.
Caps the Cost of Living Increase (COLA) for employees hired after July 1, 2010, at a maximum of 6 percent (recognizes the first two percent of inflation plus one-half of the next 8 percent). The current COLA recognizes the first three percent, plus one-half of each of the next 4 percent (5 percent cap). The change in the COLA moderates COLA increases in periods of low to moderate inflation, but allows for greater increases in periods of higher inflation.
The VRS multiplier stays at 1.7% for all employees. This is a major victory. There was an effort to reduce the multiplier for new hires to 1.65%.
We’ll have to see if there are amendments proposed in the veto session.
We could have done much worse. Your work paid off!
Friday, March 12, 2010
Two Pot Shots and a Bicker
We are at the point where most of the legislative work is done. All the committee work is done. Other than the conferees, most folks aren’t too busy. It has been a miserable session. Now is the time to bicker and take pot shots. I can get into this!
Pot Shot #1
I understand much of what the Family Foundation does. But for the life of me, I can’t understand why the Family Foundation would wish to harm the public schools which serve the vast majority of families in Virginia.
The group in a recent release says the following:
One diatribe being used is the myth that public education is getting cut to the bone and that tax increases are necessary “for the children.” The VEA is making wild claims about thousands of teachers losing their jobs. It must be noted, however, that spending on K-12 education in Virginia has increased 60 percent over the last 10 years while enrollment in public schools has increased only 7.2 percent. In 2004 the General Assembly infused public education with over a billion dollars in additional funding and every two years the antiquated funding formula guarantees a billion in extra taxpayer dollars into public education.
Interestingly, a poll participated in by The Family Foundation last year found that a majority of Virginians vastly underestimate the amount of money Virginia spends per pupil on public education. While most thought it was less than $6,000, in fact it is in excess of $11,000 per student!
It’s time for lawmakers to do what Virginia families are doing – cut expenses – not burden already struggling citizens.
So this is the Family Foundation (FF) claiming that VEA is making wild claims. Well, how about the claim that Virginia is spending “in excess of $11,000 per student”? Virginia, the eighth wealthiest state in the nation, is spending $4,987 per student this year which ranks us about 35th in the nation. Our teachers make a salary $5,954 (11%) below the national average. Citizens in 40 states pay higher state taxes than do we. The good news is that the Virginian’s who responded to the FF poll know more about state funding for our schools than does the FF.
Pot Shot #2
It is ironic that, when House of leadership says VEA is wrong in asserting that many educators will lose their jobs as a consequence of budget cuts, the locality in which the sponsor of the House budget bill (HB30) resides announced last night that 124 job cuts in the Bedford school board budget?
Parting Bicker
It looks like the General Assembly will be in session all weekend! Why won’t they just go home?
Pot Shot #1
I understand much of what the Family Foundation does. But for the life of me, I can’t understand why the Family Foundation would wish to harm the public schools which serve the vast majority of families in Virginia.
The group in a recent release says the following:
One diatribe being used is the myth that public education is getting cut to the bone and that tax increases are necessary “for the children.” The VEA is making wild claims about thousands of teachers losing their jobs. It must be noted, however, that spending on K-12 education in Virginia has increased 60 percent over the last 10 years while enrollment in public schools has increased only 7.2 percent. In 2004 the General Assembly infused public education with over a billion dollars in additional funding and every two years the antiquated funding formula guarantees a billion in extra taxpayer dollars into public education.
Interestingly, a poll participated in by The Family Foundation last year found that a majority of Virginians vastly underestimate the amount of money Virginia spends per pupil on public education. While most thought it was less than $6,000, in fact it is in excess of $11,000 per student!
It’s time for lawmakers to do what Virginia families are doing – cut expenses – not burden already struggling citizens.
So this is the Family Foundation (FF) claiming that VEA is making wild claims. Well, how about the claim that Virginia is spending “in excess of $11,000 per student”? Virginia, the eighth wealthiest state in the nation, is spending $4,987 per student this year which ranks us about 35th in the nation. Our teachers make a salary $5,954 (11%) below the national average. Citizens in 40 states pay higher state taxes than do we. The good news is that the Virginian’s who responded to the FF poll know more about state funding for our schools than does the FF.
Pot Shot #2
It is ironic that, when House of leadership says VEA is wrong in asserting that many educators will lose their jobs as a consequence of budget cuts, the locality in which the sponsor of the House budget bill (HB30) resides announced last night that 124 job cuts in the Bedford school board budget?
Parting Bicker
It looks like the General Assembly will be in session all weekend! Why won’t they just go home?
Thursday, March 11, 2010
Hoping We Are Wrong
The Republican leadership in the House has been repeatedly criticizing VEA's job loss projections. We tallied the number of positions that the state would be eliminating state funding for based on Basic Aid reductions proposed first by Kaine, then Senate working papers, then McDonnell, and finally the House and Senate. We thought it important that the policy makers and the public know the implications of the cuts.
We made our assumptions clear:
VEA assumed that 85% of the local school board budgets are allocated for personnel, so we backed out 15%.
We assumed that localities will not be able to make up for the loss of state funding.
We used state support for an SOQ teaching position as the proxy for a position ($33,000). This figure was provided by Senate Finance Committee staff.
A considerable number of K-12 educators, from assistant superintendents to cafeteria workers stand to lose their jobs as a consequence of the proposed budget cuts.
We used the direct aid entitlement amount for 2008-2009 as the base year (the major recession driven cuts have occurred since).
The highest number was based on the $731 million dollar cuts that Governor McDonnell espoused on February 17. The House leadership has since claimed that the 28,000 figure we attributed to the Governor’s proposal is the figure that we attributed to the House budget, and they claim we are exaggerating. We actually estimate that the House budget will eliminate state funding for 22,000 positions. But, the significant caveat on what really happens is whether or not local governments make up for the state cuts. Many will not. Some, poor localities cannot be realistically expected to do so.
Even the comparatively wealthy Richmond area suburban county Henrico County's school board adopted a preliminary budget that, according to today’s Richmond Times-Dispatch, “eliminates 123 positions through attrition. Of those, about 98 are teaching positions.”
Lee County is sending non-renewal notices to all teachers with less than three years experience. Some teachers hired as recently as January are now losing their jobs there.
Nothing would make us happier than seeing our estimates prove overblown.
One thing is very clear. The Senate budget contains $542 million more for PreK-12 Education than the House budget. Interestingly, Governor McDonnell is working behind the scenes to move the House toward the Senate position. I believe he is coming to grips with the extensive damage the House cuts will wreak.
This is the most frustrating time for your lobbyists. We wait on the side-lines as the conferees meet, standing ready to provide information when it is requested. We can only hope the budget that comes forth is close to the Senate’s position. Even that will be damaging to our schools. It is not too late for you to weigh in.
Send a message to the House conferees and to the Senate conferees now.
We made our assumptions clear:
VEA assumed that 85% of the local school board budgets are allocated for personnel, so we backed out 15%.
We assumed that localities will not be able to make up for the loss of state funding.
We used state support for an SOQ teaching position as the proxy for a position ($33,000). This figure was provided by Senate Finance Committee staff.
A considerable number of K-12 educators, from assistant superintendents to cafeteria workers stand to lose their jobs as a consequence of the proposed budget cuts.
We used the direct aid entitlement amount for 2008-2009 as the base year (the major recession driven cuts have occurred since).
The highest number was based on the $731 million dollar cuts that Governor McDonnell espoused on February 17. The House leadership has since claimed that the 28,000 figure we attributed to the Governor’s proposal is the figure that we attributed to the House budget, and they claim we are exaggerating. We actually estimate that the House budget will eliminate state funding for 22,000 positions. But, the significant caveat on what really happens is whether or not local governments make up for the state cuts. Many will not. Some, poor localities cannot be realistically expected to do so.
Even the comparatively wealthy Richmond area suburban county Henrico County's school board adopted a preliminary budget that, according to today’s Richmond Times-Dispatch, “eliminates 123 positions through attrition. Of those, about 98 are teaching positions.”
Lee County is sending non-renewal notices to all teachers with less than three years experience. Some teachers hired as recently as January are now losing their jobs there.
Nothing would make us happier than seeing our estimates prove overblown.
One thing is very clear. The Senate budget contains $542 million more for PreK-12 Education than the House budget. Interestingly, Governor McDonnell is working behind the scenes to move the House toward the Senate position. I believe he is coming to grips with the extensive damage the House cuts will wreak.
This is the most frustrating time for your lobbyists. We wait on the side-lines as the conferees meet, standing ready to provide information when it is requested. We can only hope the budget that comes forth is close to the Senate’s position. Even that will be damaging to our schools. It is not too late for you to weigh in.
Send a message to the House conferees and to the Senate conferees now.
Wednesday, March 10, 2010
Pay Cut vs. Furlough
You know it is the worst session in the world when in the final days you are trying to decide whether or not there should be language in the budget to allow school boards to furlough teachers. Currently, the code of Virginia does not allow it according to every lawyer knowledgeable of Virginia school law I’ve encountered. Below is the applicable section of the administrative code.
8VAC20-440-20. Contractual period defined.
The local school board shall define the length of the contract period for each employee.
A 10-month contractual period is defined to include 200 days as follows:
1. One hundred and eighty teaching days or 990 instructional hours (minimum required
by law);
2. Ten days for activities such as teaching, planning for the opening of school,
evaluation, completing records and reports incident to the closing of each semester or school year, committee assignments, and conferences;
3. Ten days for a continuation of activities under subdivisions 1 and 2 of this section, and such other activities as may be assigned or approved by the local school board.
Currently, the law allows school divisions to cut pay, but not furlough. The big advantage to a furlough as opposed to a pay cut is that a furlough does not appear to affect VRS’s average final salary computation. We are seeking to confirm this with VRS. The following was relayed to me by a school board member in this regard:
"According to VRS there is significant difference. In the furlough example I gave you, VRS informed us that the employer has the 'choice' to still pay the VRS contribution at the contracted salary amount even though [the] employee will be making less salary. This would preserve the employee's average final compensation.
In the second 'planned' reduction example, there is no 'choice[;]' the VRS contribution can only be paid on the contracted salary amount. Subsequently, negatively impacting the employee twice, once by a pay reduction and second by reducing their average final compensation.[sic]"
If a teacher's contract is for less than 200 days, technically a school board could furlough for one of the ten days referenced in section 3 above. In that case the teacher would lose a day's pay while not working a day less.
Furloughs will also be a tool local school boards can use to reduce reductions in force. If a lot of folks lose a day, a few can keep a job. Should furlough language go into the state budget?
8VAC20-440-20. Contractual period defined.
The local school board shall define the length of the contract period for each employee.
A 10-month contractual period is defined to include 200 days as follows:
1. One hundred and eighty teaching days or 990 instructional hours (minimum required
by law);
2. Ten days for activities such as teaching, planning for the opening of school,
evaluation, completing records and reports incident to the closing of each semester or school year, committee assignments, and conferences;
3. Ten days for a continuation of activities under subdivisions 1 and 2 of this section, and such other activities as may be assigned or approved by the local school board.
Currently, the law allows school divisions to cut pay, but not furlough. The big advantage to a furlough as opposed to a pay cut is that a furlough does not appear to affect VRS’s average final salary computation. We are seeking to confirm this with VRS. The following was relayed to me by a school board member in this regard:
"According to VRS there is significant difference. In the furlough example I gave you, VRS informed us that the employer has the 'choice' to still pay the VRS contribution at the contracted salary amount even though [the] employee will be making less salary. This would preserve the employee's average final compensation.
In the second 'planned' reduction example, there is no 'choice[;]' the VRS contribution can only be paid on the contracted salary amount. Subsequently, negatively impacting the employee twice, once by a pay reduction and second by reducing their average final compensation.[sic]"
If a teacher's contract is for less than 200 days, technically a school board could furlough for one of the ten days referenced in section 3 above. In that case the teacher would lose a day's pay while not working a day less.
Furloughs will also be a tool local school boards can use to reduce reductions in force. If a lot of folks lose a day, a few can keep a job. Should furlough language go into the state budget?
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