Monday, January 31, 2011

Labor Day Bill + VEA Bill Advances

The last day of January was an interesting one at the General Assembly.

First, in an unexpected development, a Labor Day bill granting Roanoke City a waiver from the mandatory post Labor Day school opening passed the House Education Committee on a 14-8 vote. Republican Delegate Cleaveland did an excellent job of presenting the bill, HB1483, and his Democratic Roanoke Valley neighbor, Delegate O. Ware, offered able support, pointing out that the city’s children were at a disadvantage in competing with their Roanoke County neighbors, as the county starts school two weeks before Labor Day, and both localities have to give the SOL tests at the same time. I think the dam is breaking – doing away with the Labor Day Bill statewide is looking like a possibility in the years ahead.

A bill on VEA’s legislative agenda, Senator Barker’s SB1031, was reported from the Senate Committee on Education and Health Subcommittee on Public Education on a 5-0 vote! This is the bill to allow school boards to retain unspent funds at the end of the fiscal year rather than having them revert to the city council or board of supervisors.

Please check your email, you should have a cyber-lobby alert.

Friday, January 28, 2011

Think Before You Mess With VRS!

There seems less certainty now regarding how the session will address VRS reform. That is good news. A knee-jerk reaction to the Governor’s Chicken Little rhetoric could have a negative impact upon the ability of the commonwealth to attract and retain high quality personnel and, there are legitimate questions regarding the adequacy of some of the proposals on the table to afford retirees some dignity in their final years.

It seems that if we are going to take a rational approach in regard to Virginia Retirement System reform, some questions should be answered regarding the pending retirement legislation and the degree to which they will “fix” VRS.

1. Does changing who pays the 5% employee contribution add one cent to the fund?

2. Is there a danger that current retirees won’t get their checks in the years ahead?

3. Does creating a defined contribution plan for future hires, be it optional or mandatory, reduce the $17.6 billion unfunded liability of VRS?

4. If we adhere to the ten year repayment schedule, in regard to last year’s VRS contribution shortfall, and; from this day forward, honor the VRS Board of Trustee’s certified rate; won’t we achieve a sounder funding status? If we follow this path, isn’t it likely that we will move to a much firmer footing within a decade?

5. Isn’t the actuarial horizon of the $17.6 billion rather long? Consequently, don’t we have decades to address this problem?

6. I keep hearing that the current system is not sustainable. Isn’t it a fact, that if we bite the bullet and pay the certified rate that the system is sustainable?

7. Aren’t the high anticipated contribution rates, which will be a burden in the short-run, just a repayment for our failure to make appropriate contributions most of the time over the past twenty years?

8. In the 2008 JLARC report on state compensation, PricewaterhousCoopers found that the defined contribution model in the report d would provide 52% of the replacement income of the current defined benefit plan. Shouldn’t we take the time to do this same kind of analysis on each proposal to know the expected consequence of each on those that will retire after years of honorable service to the commonwealth?

Your legislators, both delegates and senators, are heading home for the weekend. Look for a chance, by letter, call, email or in face-to face conversation to ask them if this isn’t just too big an issue to address in a short session when so many questions remain unanswered.

Thursday, January 27, 2011

An Overview of Key VRS Bills

My day was a strange one. The General Assembly is in session, but I spent the day in the hospital with my mother who had hip surgery. She is doing well, but there were complications and her recovery will take a bit longer than anticipated.

I managed to turn off the damn TV in the waiting area and analyze what seem to be the most important of the forty-one VRS related bills.

HB1784 (Tata) and SB861 (Wagner) allow local governments to establish their own retirement systems in lieu of VRS.

HB2410 (Putney) provides for an optional defined contribution plan for new hires. New hires will have to make an irrevocable election of the defined contribution plan or the defined benefit plan within the first 60 days of employment.

This bill provides for an employer contribution of 2%, a 100% employer match of the first 5% the employee contributes, and a 50% match of the next 3%. So, if the employee contributes 8% the employer provides a 8.5% contribution.

If the employee leaves with two years of experience, he receives 50% of the employer contribution.

If the employee leaves with three years of experience, he receives 75% of the employer contribution.

If the employee leaves with four or more years of experience, he receives 100% of the employer contribution.

If one leaves before two years of service the employer contribution is forfeited.

The employee directs all investment decisions.

No loans or hardship distributions are allowed from the employer contribution.

Current VRS participants can switch to the defined contribution plan no later than March 31, 2012.

HB2465 (C. Jones) creates a mandatory defined contribution plan for those who hire on after January 1, 2012.

The employer match is 50% of the first 5% the employee contributes.

If the employee leaves with two years of experience, he receives 50% of the employer contribution.

If the employee leaves with three years of experience, he receives 75% of the employer contribution.

If the employee leaves with four or more years of experience, he receives 100% of the employer contribution.

If one leaves before two years of service the employer contribution is forfeited.

No loans or hardship distributions are allowed from the employer contribution.

Current VRS defined benefit plan participants can switch to the defined contribution plan no later than March 31, 2012.

SB1115 (Watkins/Stosch) establishes an optional defined contribution plan for new hires. Those hired after January 1, 2012 must make an irrevocable election when hired.

This bill provides for an employer contribution of 2%, a 100% employer match of the first 5% the employee contributes, and a 50% match of the next 3%. So, if the employee contributes 8% the employer provides a 8.5% contribution.

If the employee leaves with two years of experience, he receives 50% of the employer contribution.

If the employee leaves with three years of experience, he receives 75% of the employer contribution.

If the employee leaves with four or more years of experience, he receives 100% of the employer contribution.

If one leaves before two years of service the employer contribution is forfeited.

No loans or hardship distributions are allowed from the employer contribution.

SB1008 (Watkins/Stosch) requires that the employee pay the 5% employee contribution, but allows a 1% per year phase-in. The contribution increases by 1% in years when the employee gets at least a 1% increase. It provides for an optional defined contribution plan.

Current defined benefit plan participants can switch to this plan by October 1, 2011.

This bill provides for an employer contribution of 2%, a 100% employer match of the first 5% the employee contributes, and a 50% match of the next 3%. So, if the employee contributes 8% the employer provides a 8.5% contribution.

If an employee participates in the defined contribution plan and moves to a locality that does not offer the defined contribution plan, he can use funs from his defined contribution account to purchase service credit in the defined benefit plan at a rate determined by the VRS Board.

An employee must have five years of service to collect the employer contribution upon termination of service.

Wednesday, January 26, 2011

Are Elementary Art and Music Programs Threatened?

To follow up on yesterday’s posting, the new language Delegate O’Bannon’s HB1644 inserts into the code reads as follows:

“A program of daily physical education available to all students in grades kindergarten through eight consisting of at least 150 minutes per week on average during the regular school year. Each local school board shall incorporate into its local wellness policy a goal for the implementation of a similar program for high school students during the regular school year.”

The following words are the final words of the bill:

“That the provisions of this act shall become effective beginning with the 2014 - 2015 school year.”

These words allegedly provide time for the bill’s implementation, but the true purpose of these words may me to keep the bill from having a fiscal impact on the current budget cycle, to allow the bill’s sponsor to claim no fiscal impact and to keep the bill’s costs from being taken into consideration.

This strategy worked today, and the efforts of those, who favor increasing the time students have for physical activity without harming our music art and other programs failed.

More time for physical education should be provided. Doing this will probably require more P.E. teachers and a longer school day. This will cost money, and if the General Assembly chooses to impose this good policy on our schools, the General Assembly should help pay the costs.

It appears that the General Assembly will not even examine the cost implications of the bill.

My fear now is that localities will implement the policy with no help from the state, and that the localities which are cash poor at this juncture and tired of unfunded state mandates will do so at the cost of art and music.

This bill is headed to the full house following a 16-6 Education Committee vote to report the bill. There may be an effort on the floor to refer this bill to the Appropriations Committee to examine the costs. Please call or email your delegate urging them to support referring the bill back to Appropriations.

Tuesday, January 25, 2011

Childhood Obesity and Physical Education

No one doubts that we have a child-hood obesity problem in Virginia. We also know that increasing the portion of the day our children devote to physical activity is one component of addressing this problem, along with proper diet, sleep habits and other factors.

That is why House bills 1644 (O’Bannon) and 1710 (A. Howell) along with Senate bills 803 (Lucas), 966 (Northam) and 934 (John Miller) are on the fast track.

HB1710 has been rolled into O’Bannon’s HB1644, and two of the Senate bills were rolled into Northam’s SB966. Perhaps it is a coincidence that physicians are carrying both of the surviving bills, but the two doctors certainly understand the health consequences of Virginia’s childhood obesity epidemic. Senator Saslaw, though not a physician, provided a quip that reveals the problem, “Some of our kids look like circus freaks.”

It appears that in both the House and Senate, the surviving bills require 150 minutes of “daily physical education” per week in grades K-8 and “a goal for implementation of a similar program in high school students.” They give our schools until 2014-2015 to meet the requirement.

None of the bills speak to the costs associated with implementing this policy. To his credit, House Education Subcommittee Chairman Scott Lingamfelter steered the house bill to the House Appropriations Committee for an examination of the fiscal impact of the legislation.

The costs are but one factor to consider. If the time for physical education in the school day is expanded, what will we take out of the day? In many of our elementary schools, physical education, music, art and sometimes library time are provided on a rotating basis. If daily physical education is required, what becomes of music and art? It appears that the school day would need to be extended to preserve these programs. This could make the costs of implementation high.

The physical education, music, art and library time rotations also provide the planning time for elementary teachers. If more physical education teachers are not provided to implement the requirement, when will elementary teachers have time to plan?

In addition, currently, students are pulled for tutoring during this time period. The fact that the target test scores to meet AYP have been ratcheted-up yet again makes this tutoring all the more important. When will these tutoring sessions take place?

It seems that implementing these bills will be a far more complicated, consequential and expensive that the bill’s sponsors imagined. It’s the right thing to do, but will the state come up with the funds to implement the policy? Don’t hold your breath.

Although VEA has not taken a position on this legislation, we are trying to ask the right questions. You may wish to weigh (no pun intended) in on the issue with your delegate and senator.

Monday, January 24, 2011

350 Lobby Day Participants

Three hundred and fifty VEA members participated in our 2011 VEA Lobby Day. We thank each and every one of them for standing up for public education on this cold day in Richmond.

Here is the lobby day message they delivered to legislators:

1. As Virginia’s economy recovers from the Great Recession, and state revenues pick up – place high priority on repairing the damage done to our schools in the past two years, when we have seen state funding per-pupil fall by almost 15%.

2. Please support the budget amendments from Delegate Tata and Senator Houck to provide 3% salary increases to school employees (see the one-sider in your folder).

3. Please protect the VRS defined benefit program, reject the notion of re-imposing the 5% employee contribution, and reject efforts to move to a defined contribution plan. Please commit to repaying last year’s VRS shortfall and to honoring the certified contribution rate from the VRS Board of Trustees in the future. That is the route to a strong VRS (see the one-sider in your folder) .

4. Please protect the General Fund, upon which core services such as public education depend for funding. Reject efforts to increase debt and future debt service costs and reject tax credits which deplete the fund. The percentage of the state budget going to public education is at an all-time low point (29.88%) and “shrinking the pie” will only make things worse. The course we are on will “starve” our schools.

5. Restore the “Hold Harmless” funds appropriated in Chapter 874. Cutting these funds cuts instructional funding in 97 school divisions.

Please share with your representatives how the cuts to public education are eroding the quality of the educational opportunity of the children you serve.

Sunday, January 23, 2011

65% Passes House by a Two Vote Margin

The vote on Delegate Loupassi’s “65% Solution” bill was interesting. Our goal was to weaken the bill as much as possible in the House to make it easier to kill in the Senate. The 48-46 vote to pass the bill was far from a party-line vote. Twelve Republicans voted with us, and two Democrats voted against us. A "NAY" vote supported the VEA position.

YEAS--Abbitt, Albo, Anderson, Athey, Bell, Richard P., Bell, Robert B., Byron, Carrico, Cline, Cole, Comstock, Cosgrove, Cox, J.A., Cox, M.K., Garrett, Gilbert, Greason, Iaquinto, Joannou, Jones, Kilgore, Knight, Landes, LeMunyon, Lingamfelter, Loupassi, Marshall, D.W., Marshall, R.G., Massie, May, Morefield, Morgan, O'Bannon, Oder, Orrock, Peace, Pogge, Poindexter, Pollard, Putney, Robinson, Sherwood, Stolle, Villanueva, Ware, R.L., Wilt, Wright, Mr. Speaker--48.

NAYS--Abbott, Alexander, Armstrong, BaCote, Barlow, Bulova, Carr, Cleaveland, Crockett-Stark, Dance, Ebbin, Edmunds, Englin, Filler-Corn, Habeeb, Herring, Hope, Howell, A.T., Hugo, Ingram, James, Johnson, Keam, Kory, Lewis, McClellan, McQuinn, Merricks, Miller, J.H., Miller, P.J., Phillips, Plum, Purkey, Rust, Scott, E.T., Scott, J.M., Shuler, Sickles, Spruill, Tata, Torian, Toscano, Tyler, Ward, Ware, O., Watts--46.

ABSTENTIONS--0.

NOT VOTING--Brink, Janis, Morrissey, Nutter, Surovell--5.

Of those not voting, Surovell told VEA that he had to be in Northern Virginia on Friday to attend to pressing personal business.

Let’s watch this one on the Senate after crossover.

Please make a point of thanking your delegate if she/he voted right on this one.

Friday, January 21, 2011

Hope for a Better Budget for Education

Following the development of Virginia’s budget is even more difficult than following the process for bills. Many of the decisions are made in behind-the-scenes meetings that are technically open to the public, but the unspoken word is that you attend to the detriment of your cause.

Yesterday, member’s budget amendments were posted, and these amendments provide an insight regarding their respective priorities. Look, for example, at the amendments proposed by Delegates O’Bannon and Cox. You can view the Delegates and Senator’s amendments at the following sites:

House - http://leg2.state.va.us/WebData/11amend.nsf/House+Patron?OpenForm

Senate - http://leg2.state.va.us/WebData/11amend.nsf/Senate+Patron?OpenForm

Thanks to Delegate Tata and Senator Houck, we are still in the battle to win a pay increase for school employees. Although Tata’s budget amendment is entitled with the word “teacher,” it includes all SOQ positions. Houck’s K-12 funding amendment is a “place holder” for funds to provide the option of improving pay or saving jobs.

We are fortunate, too, that a number of members from both parties are fighting to restore the Hold Harmless funds that were slashed by the Governor ($57,599,781).

House Amendments
Bacote - 132 6h Restore Composite Index in FY2012 $57,599,781
Carr - 132 5h Restore Composite Index in FY2012 $57,599,781
Tata - 132 1h Teacher 3% Salary Adjustment $99,355,544
- 132 2h Restore Composite Index in FY2012 $57,599,781

Senate Amendments

Barker - 1 3s Jt. Sub. To Study Virtual School Funding
- 30 1s JLARC Study of VRS
- 132 4s Freeze Virtual School Enrollment
Houck - 132 7s K-12 Funding YR1 $83,159,970 YR2 $87,698,039
Marsh - 132 2s Restore FY12 LCI Hold Harmless $57,599,781
Quayle - 132 1s Restore FY12 LCI Hold Harmless $57,599,781
Reynolds - 132 3s Restore FY12 LCI Hold Harmless $57,599,781

Our job now is to support these amendments to make the reports that come out of the House Appropriations Committee and Senate Finance Committee more generous to public education than what the Governor proposed on December 17th.

Thursday, January 20, 2011

65% and Home Schoolers on Public School Sports Teams

HB 1416 was taken up on second reading in the House today, and after an acrimonious debate in which the Virginia Education Association and the Virginia Association of School Superintendents were said to be unions by the bill’s sponsor Manoli Loupassi. Delegate Pollard pointed out to Loupassi public employees in Virginia, by law, cannot unionize. Delegate Morrisey did an excellent job of revealing the bill’s flaws to no avail, and the bill passed on a voice vote. The final vote will be tomorrow.

The goal of the bill, getting more money into the classroom, is laudable, but the real impact of the bill will be cutting the support services so important to the success of teachers in the classroom (librarians, counselors, bus drivers, custodians and etc.).

This morning the Students and Daycare Subcommittee of the House Education Committee reported Delegate Bell’s HB2395, a bill to allow home schooled students to participate in interscholastic (public school) sports, to the full committee. This bill should come before the House Education Committee on VEA Lobby Day, this Monday. Please contact the House Education Committee members urging opposition to HB2395 (link to committee information).

If we do this for public schools shouldn’t we do this for our public universities? Why should you have to go to UVA to play on the sports teams?

Wednesday, January 19, 2011

It’s time for some sober reflection on the VRS issues: The sky is not falling.

Virginia is confronted with an unfunded liability in the various Virginia Retirement System (VRS) funds of $17.6 billion. The General Assembly has failed to adequately fund the VRS. They have provided sufficient funds to meet the VRS Board of Trustee’s certified contribution rate only four times in the last twenty years for the teacher fund and six times in the last twenty years for the state employee fund.

It has taken us a decade to dig the hole we are in. As recently as 2001, the teacher fund, for example, was actually over-funded (106%).

The VRS plan for teachers is relatively conservative in its benefit structure. In terms of replacement income, we rank 37th among the states.

We strongly support efforts to make the VRS fiscally sound, but we do not feel that taking money from under-paid teachers, ESP, and from our school divisions is the best way to address this problem.

It is important to recognize that the sky is not falling. The market value of the VRS fund now exceeds $50 billion. Current retirees need not live in fear of losing their benefits.

The Governor suggests that we address this problem by making employees pay the 5% employee contribution to VRS, by giving future hires a choice of participating in VRS as we know it or in a defined-contribution plan, and by increasing the employer contribution rate for school board employees by 2% in the year ahead.

This plan breaks a promise made to state workers and school board employees who were told in the 1980s that the 5% employee contribution would be paid on their behalf in lieu of a raise. We were told that this was an irrevocable decision.

This action was taken by the state and local school boards because it was less expensive for the employer to pick up the 5% contribution than to provide a 5% salary increase, since the increased costs of certain fringe benefits would not have to be provided (FICA and VRS). Employees saw a 5% increase in take home pay, but it cost the employer less than 5%.

The Governor’s plan for a one time infusion of $311 million, a third or which comes from local revenue, will do little to address a $17.6-billion problem.

The actuarial horizon of the unfunded liability is, according the VRS, 80 to 90 years. We don’t have to repair the damage of underfunding and the Great Recession in a day. The best course of action is to follow the ten year repayment schedule for last year’s underfunding which was adopted in the biennial budget and to honor the rate certified by the VRS Board of Trustees in all future years. That is a reasonable approach to fill the hole, and an approach that does not impose an unfair hardship on VRS members.

Virginia, the 7th wealthiest state in the nation, currently pays her teachers a salary $5,400 below the national average. When we compare the average pay of teachers to the average pay of all workers in each state, only South Dakota teachers fare worse than Virginia’s teachers.

Most Virginia’s teachers have earned the same pay for the last three years, and many of them have seen salary reductions from cuts and furloughs.

This is no time to cut the salaries of Virginia’s teachers by re-imposing the 5% employee VRS employee contribution.

The Commonwealth is also considering the bifurcation of the teacher retirement plan by offering a defined-contribution option to future hires.

“The process by which the level of salaries and benefits is considered should be based on an established set of principles and goals.” - JLARC Review of State Employee Compensation, Oct. 2008

In the case of instructional staff in our public schools, the primary goal should be to attract and retain highly skilled teachers. Research indicates that, “Skilled teachers are the most critical of all schooling inputs.” – Dr. Ronald Ferguson, Harvard University

“Studies at the state, district, school, and individual level have found that teachers’ academic background, preparation for teaching, and certification status, as well as their experience, significantly affect their students’ achievement.” - Linda Darling-Hammond, Stanford University

While providing a defined-contribution option to school employees may in the long-term reduce the cost of providing a retirement benefit to employees, and it might even be attractive to prospective teachers who have no long-term commitment to the teaching profession, such a course is contrary to what should be the state’s goal of retaining experienced teachers in Virginia’s classrooms. The required service of 30 years to achieve full retirement benefits is a significant factor in retaining experienced teachers.

JLARC found that, “The defined benefit retirement plans the State provides are competitive
with what other employers offer and achieve their goals of retaining longer-tenured employees and providing an adequate benefit to retire.” – JLARC Review of State Employee Compensation, Oct. 2008

The adequacy of the retirement benefit generated by a defined-contribution plan to meet the needs of dedicated school board employees in their final years is questionable. PwC, in the 2008 JLARC study of Total Compensation for State Employees, found that “after 30 years of service, the defined contribution plan would have approximately 52 percent of the value of the current defined benefit plan. With Social Security, the defined contribution plan would also provide an income replacement of approximately 29 percent less than the current defined benefit plan.”

A Bedford County teacher, for example, who retires after 30 years experience in the current VRS pension will receive an annual benefit of $26, 223 (30 x 01.7% x $51,417). Using the PwC analysis, she would receive an annual benefit of $13,636 had she been in the defined-contribution plan.

A young person fresh out of college is not in the best position to make a decision of this consequence to her long-term well-being.

The defined-contribution option is not the best policy for the Commonwealth if our goal is to attract and retain high-quality personnel in our schools, and it is certainly not the best option for teachers and other school board employees.

As we work with the General Assembly in the days ahead, our shared goal should be to ensure the financial viability of VRS and to treat employees in an equitable manner that does not show them the door.

Tuesday, January 18, 2011

65%, Merit Pay and Vouchers

I am going to delay the posting of the promised retirement legislation analysis as more urgent legislative issues have arisen.

In a close vote (11-9) the House Education Committee voted Monday morning to report Delegate Manoli Loupassi’s HB 1416, the 65% solution bill. The bill will provide pressure on local school divisions to spend 65% of funding on instruction.

The ongoing concern regarding the bill is that it may negatively impact the programs not included in the USDOE definition of instruction such as guidance counselors librarians, pupil transportation, principals and assistant pricipals, nurses, food services, facilities maintenance (heating and cooling), testing to comply with SOLs and NCLB, curriculum development, PTs and OTs and other services necessary for SPED.

YEAS--Landes, Cole, Athey, Pogge, Massie, Loupassi, Greason, Bell, Richard P., Stolle, LeMunyon, Robinson--11.

NAYS--Tata, Rust, Shuler, Alexander, Ebbin, McClellan, Tyler, Bulova, Morrissey--9.

ABSTENTIONS--0.

NOT VOTING--Lingamfelter, Ware, O.--2.

The bottom line is that if this bill passes, the jobs of many who are necessary to support classroom instruction will be lost. The most threatened positions are custodians, bus drivers, librarians, guidance counselors, schools social workers, physical and occupational therapists, food service workers and maintenance personnel.

Please call your delegate today urging him/her to vote against HB 1416.

The Governor held a press conference this morning to proclaim his support of pay-for-performance and Delegate Massie’s tuition tax credit bill, HB 2314.

The merit pay initiative will provide $3 million dollars to pilot pay-for-performance in eight hard-to-staff divisions. The bonus payments will be $5000 per teacher.

The voucher bill will drain $25 million from the General fund to provide $4,500 private school scholarships to students who qualify for free-or-reduced lunch. It should be noted that private school tuitions in Virginia can be as much as $20,000.

So, our Governor, who cut $50 million in public education funding with his introduced budget amendments, is now proposing that the state spend $25 million to provide private school vouchers.

Monday, January 17, 2011

VRS Legislation from the Democrats

Friday we examined the Virginia Retirement System (VRS) legislation from the Republican side of the aisle. Today, let’s look at the bills from the Democratic legislators.

HJ 649 from Delegate Plum directs the Joint Legislative Audit and Review Commission to study the Virginia Retirement System to determine whether the General Assembly is complying with its Constitutional obligation to fund the Virginia Retirement System using methods that are consistent with generally accepted actuarial principles.

HJ 680 from Delegate Englin proposes a Constitutional amendment requiring that contributions to defined benefit retirement plans that are maintained for state employees and employees of participating political subdivisions and school divisions be made in strict adherence with contribution rates and times for the payment of the contributions as recommended by the Board of Trustees of the Virginia Retirement System (VRS).

The contrast between what is proposed by the two parties is sharp.

Tomorrow, I’ll post your lobbyists take on where we stand on VRS legislation.

Friday, January 14, 2011

Retirement Legislation Part One

Virginia’s two political parties have sharply contrasting approaches in regard to pension legislation. The following three bills are the most significant bills from the Republican side of the aisle.

Two Virginia Beach Republicans, Delegate Tata and Senator Wagner, have submitted companion bills (HB 1784 and SB 861). These bills permit “any locality or school board to establish a defined contribution retirement plan in lieu of any other retirement plan, for employees hired after such plan is established.” Stated more simply, any locality could choose not to be in VRS. The consequence of this bill would be severely reduced retirement benefits for teachers and other local employees.

Two central Virginia Republican Senators , Stosch and Watkins, have submitted the Governor’s bill, SB 1008. This bill “allows political subdivisions that participate in the Virginia Retirement System to establish a … defined contribution plan.”

The adequacy of the retirement benefit generated by a defined contribution plan to meet the needs of dedicated school board employees in their final years is questionable. PricewaterhouseCoopers, in the 2008 JLARC study of Total Compensation for State Employees, found that “after 30 years of service, the defined contribution plan would have approximately 52 percent of the value of the current defined benefit plan. With Social Security, the defined contribution plan would also provide an income replacement of approximately 29 percent less than the current defined benefit plan.”

A Bedford County teacher, for example, who retires after 30 years experience in the current VRS pension plan will receive an annual benefit of $26, 223 (30 x 01.7% x $51,417). Using the PwC analysis, she would receive an annual benefit of $13,636 had she been in the defined contribution plan.

The Employee Benefit Research Institute found that fewer than 50% of workers in defined contribution plans had more than $25,000 saved. A quarter of workers had put away next to nothing.

In SB 1008, Local employers would retain the option of paying member retirement contributions on behalf of their employees participating in the Virginia Retirement System.

The Governor indicated that he will submit legislation to do the following:

Require employees hired after 7/2011 to pay the 5% VRS employee contribution

Allow school divisions to make employees hired before 7/2010 to pay the 5%---if pay raise given of at least 3%. No phase in of 5% allowed.

Hired after 7/2010 but before 7/2011? Who knows?

I am yet to find these provisions in a bill and legislation is required to enact these proposals.

In a subsequent posting, I will summarize the bills from the Democratic side of the aisle.

Thursday, January 13, 2011

VEA Initiated Legislation

Your lobbyists are swamped by the thousands of bills that have been filed, and we are working to identify those that will affect students, those who work in schools, and the quality of public education. The following measures that VEA has initiated are now “Prefiled and ordered printed”:

HB 1786 School boards; funds appropriated by locality shall be reappropriated to board.

A BILL to amend and reenact § 22.1-100 of the Code of Virginia, relating to unexpended local school and educational funds.

Summary as introduced:

Local school boards; unexpended funds. Provides that any funds appropriated by the locality to a local school board that are not expended in any fiscal year must not revert to the locality but shall be reappropriated to the local school board.

Patron: Tata

HJ 649 Study; Virginia Retirement System; report.

Directing the Joint Legislative Audit and Review Commission to study the Virginia Retirement System. Report.

Summary as introduced:

Study; Virginia Retirement System; report. Directs the Joint Legislative Audit and Review Commission to study the Virginia Retirement System to determine whether the General Assembly is complying with its Constitutional obligation to fund the Virginia Retirement System using methods that are consistent with generally accepted actuarial principles.

Patron: Plum

SB 805 Health insurance; credits for retired school division employees.

A BILL to amend and reenact § 51.1-1401 of the Code of Virginia, relating to health insurance credits for retired school division employees.

Summary as introduced:

Health insurance credits for retired school division employees. Provides that the health insurance credit currently being provided to retired teachers would also be provided to all retired employees of the local school division at the option of the local school division and as a cost borne by the local government.

Patron: Marsden

SB 1022 Virginia Retirement System; creditable compensation of teachers.
A BILL to amend and reenact § 51.1-124.3 of the Code of Virginia, relating to creditable compensation of teachers under the Virginia Retirement System.

Summary as introduced:

Virginia Retirement System; creditable compensation of teachers. Provides that the creditable compensation of teachers for retirement purposes under the Virginia Retirement System shall include all compensation payable to teachers by their public school boards, including compensation that is not pursuant to a contract for teaching.

Patron: Puckett

SB 1031 Public schools; unexpended funds.

A BILL to amend and reenact § 22.1-100 of the Code of Virginia, relating to unexpended school funds.

Summary as introduced:

Public schools; unexpended funds. Allows local school divisions to keep any unexpended funds from the Commonwealth or local sources for use the next year.

Patron: Barker

Much more information regarding VEA’s bills will follow, but this will give you the bill numbers to reference as you advocate for the VEA agenda. Please note that the bill numbers are “hot links” which will take you to a display of the status and history of the bills.

Tangentially, economist, Robert Reich recently did an interview on NPR which explains why it is so hard to gain support for public education in today’s America. I think you will find it most insightful.

Wednesday, January 12, 2011

The General Assembly Session Begins Today

The General Assembly technically starts at noon today, but the Senate Finance Committee Subcommittee on public education met yesterday afternoon, and Sarah Herzog, legislative analyst for public education issues, presented an Overview of the Governor's Proposed Amendments to the 2010-2012 Budget for Public Education and Other Education Agencies. Although the Governor had one half of a billion dollars in additional revenue, he actually cut public education by over $50 million. In light of the more than 14 percent cuts in public education funding since 2009, at least some of the additional funds should have gone to repairing the damage to our schools.

Job #1 for your VEA lobbyists will be to urge legislators to develop a budget proposal more in keeping with the values of Virginia – a budget which restores our investment in the education of the children of Virginia.

Tuesday, January 4, 2011

VEA Legislative News Flash is Out

The Pre-Session issue of the Legislative News Flash is now available. View or download a copy below. We'll publish other print versions of the News Flash during the session, but the most recent information will always be at this blog.

VEA Legislative News Flash, Pre-Session Issue