Tuesday, January 31, 2012

What a difference a year makes!

Senator Marsden's SB 198, the bill which would have allowed local school boards to provide the retiree health care credit to support personnel, failed to report from the Senate Finance Committee this morning. Senator Hanger made the motion to report, and we thank him.

This bill was reported from the same committee last year only to die in the House. Look at the committee votes from both years:

2011

YEAS--Houck, Howell, Miller, Y.B., Marsh, Lucas, Whipple, Reynolds--7.

NAYS--Colgan, Wampler, Stosch, Saslaw, Watkins--5.

ABSTENTIONS--Quayle, Norment--2.

2012

YEAS--Howell, Saslaw, Hanger, Miller, Y.B., Marsh, Lucas--6.

NAYS--Stosch, Norment, Watkins, Newman, Ruff, Wagner, McDougle, Vogel--8.

ABSTENTIONS--0.


For those who doubt that elections make a difference, this vote proves otherwise.

Monday, January 30, 2012

House Vote on Labor Day Bill Sets Up Senate Battle

This morning the House Education Committee, on a strong vote, reported Delegate Bob Tata’s HB 1063, which returns control of the school calendar to local school boards.

YEAS--Tata, Rust, Massie, Greason, Bell, Richard P., Stolle, LeMunyon, Robinson, Yost, Yancey, Dudenhefer, Alexander, Ware, O., Tyler, Bulova, Morrissey, Keam--17.

NAYS--Landes, Lingamfelter, Cole, Pogge--4.

NOT VOTING--McClellan--1.

McClellan was out of state on pressing personal business, but she would have voted for the bill.

This sets up a battle after crossover. The vote on Marsden’s similar bill in the Senate Education and Health Committee was as follows:

YEAS--Martin, Lucas, Newman, Barker, Northam, Miller, J.C., McWaters, Black, Carrico--9.

NAYS--Saslaw, Howell, Blevins, Locke, Smith, Garrett--6.

This vote was to Pass-By-Indefinitely, so a NAY was a vote for the bill. We need to flip two votes to get the bill to the floor in the Senate.

A special thanks goes to Senator Harry Blevins, who chairs the Education Subcommittee of Senate Education and Health. The Governor’s teacher contract bill was to be taken up without VEA even having a chance to see the substitute being proposed. He let the bill go by for the day so that we can try to get our hands on it and prepare to testify. Senator Obenshain is carrying the bill.

Friday, January 27, 2012

Share the Truth About School Funding!

I’ve addressed the need to keep the education funding debate honest in previous postings, but I’d like to retrace my steps to add a bit of additional information.

In the Governor’s budget address, in his State of the State address, and frequently since he cited the JLARC Review of State Spending to justify his proposed education funding levels saying:

“… in K-12 education, according to the JLARC report, total funding has grown 41% over the last decade, while student enrollment has only gone up 6%.”

VEA members hear this and wonder why their classes are bigger, supplies are in short supply, and their salaries have, in most places, been cut or are stagnant.

This nugget from the Senate Finance Committee comes explains why reality does not comport with the Governor’s statement:

"GF and NGF Appropriations Over Ten Years (GF and NGF) –FY 2002 to FY 2011. Per JLARC’s annual report on State Spending, total Direct Aid (GF and NGF) increased 41 percent while enrollment increased 6 percent and inflation increased 23 percent. This results in an inflation-adjusted per pupil increase of about 12 percent over ten years."

However, Page 14 of the JLARC State Spending report the Governor references also offers a telling analysis:

“DOE (Direct Aid) … was not among the ten fastest growing agencies …, having grown more slowly (21%) than inflation, which grew 23% over the period.” (Table references are deleted.)

The report points out that the implementation of the federal mandates associated with NCLB and special education requirements had a substantial impact on the cost of public education.

Page 3 says, “… this report does not address the merits or adequacy of funding for governmental functions, agencies, or programs.”

Let’s look at the facts. Virginia’s per-pupil spending from state sources ranks 35th in the nation (CQ Education State Ranking 2011-2012). Our average teacher salary is $4,510 below the national average (CQ Education State Ranking 2011-2012). But, we are the 7th wealthiest state in per capita personal income (CQ State Rankings 2011).

In year two of the proposed budget we will be running our schools on $547 less per-pupil than in FY 2009. We have 2,116 fewer teachers in our schools today (VA DOE) than we did in 2009 , but we have about 45,000 more students (Weldon Cooper Center).

Spread the truth as you talk to folks this weekend, and have a good one.

Thursday, January 26, 2012

GA Schizophrenic on Labor Day, Wants Homeschoolers to Play on Public School Sports Teams

This was an eventful day and long for education related legislation. The Students and Early Education subcommittee of the House Education Committee, which meets at 7:30 a.m., took up two bills relating to home schooling.

Delegate Rob Bell's HB 947 prohibits public schools from joining the Virginia High School, which does not allow participation of home schooled in sports, and allows home schooled students to participate in public school sports programs. The vote was as follows:

YEAS--Bell, Richard P., Landes, Stolle, Robinson, Yost, Morrissey--6.

NAYS--Alexander, Keam--2.

In the Senate Education and Health Committee, efforts to repeal the "King's Dominion Act" (SB 257)and grant local school boards control of the school calendar failed despite the Governor's support of the legislation. The vote was as follows (The motion was to pass by indefinitely, so a yes vote was a vote against the bill):

YEAS--Martin, Lucas, Newman, Barker, Northam, Miller, J.C., McWaters, Black, Carrico--9.

NAYS--Saslaw, Howell, Blevins, Locke, Smith, Garrett--6.

At the 5 p.m. meeting of the Teachers and Administrative Action Subcommittee of the House Education Committee, Delegate Bob Tata’s HB 1063, which repeals the “King’s Dominion Act” and grants local school boards control of the school calendar reported on the following 7-1 vote”

YEAS – LeMunyon, Robinson, Yost, McClellan, Morrissey, Keam –7

NAYS – Cole – 1

So, the school calendar bill is dead in the Senate, but alive in the House. Please call your delegate urging support of HB 1063. It should be in full committee on Monday and, we hope, heading to the floor after that.

Click here to find your delegate's phone number.

Wednesday, January 25, 2012

The Annual Contract Bills

I usually write the entries on this blog, but what follows was written by VEA Senior Staff Attorney Dena Rosenkrantz, who is providing able assistance to the VEA Lobby Cadre as we lobby the Governor’s annual contract bill.

House Bill 576 (Richard Bell) and the companion Senate Bill 438 (Obenshain) propose radical changes in teacher contracts. As these bills move through the General Assembly, where they will surely be amended, pay careful attention to how the law changes the answers to these questions:

• How can a new teacher be dismissed during the school/contract year?
New teachers are currently employed on an annual contract. The teacher is entitled to statutory notice and hearing procedures on a recommendation to dismiss or terminate the contract during the school/contract year. As introduced, HB 576 provides new teachers employment only on a probationary contract allowing “dismissal without cause.” This leaves new teachers with no right to notice or hearing, and open to dismissal during the school year for any or no reason.

• Who is a new teacher subject to dismissal without cause?
Currently, even an experienced teacher who moves from one Virginia school division to another can be required to complete one year of probationary service before returning to continuing contract. As introduced, HB 576 and SB 438 require every teacher new to the division to have a probationary contract regardless of previous employment in another school division. And, once again, the probationary contract allows “dismissal without cause.”

• Who is a teacher?
As introduced, HB 576 and SB 438 define a teacher as a person who “holds a valid teaching license” and “is regularly employed full-time as a teacher, guidance counselor, speech language pathologist, or library-media specialist /librarian.” If personnel such as school psychologists, diagnosticians, technology resource teachers and others licensed by the State Board and working with students are not listed in the definition, will they continue to be employed on teacher contracts?

• Who decides how a teacher is evaluated?
Local school boards are now required to develop an appropriate evaluation procedure that addresses student academic progress and the skills and knowledge of instructional personnel, including instructional methodology, classroom management and subject matter knowledge. HB 576 and SB 438 require using procedures the Board of Education introduced as Guidelines. No one has experience with the Board of Education Guidelines or understands how they will be applied to the majority of teachers in subjects without standardized tests.

• Who decides how often/when a teacher is evaluated?
State law currently requires annual evaluation of new, annual contract teachers. The local school board decides when and how often to evaluate more experienced, continuing contract teachers. Many school divisions put experienced teachers on two- or three-year evaluation cycles. HB 576 and SB 438 require all new teachers (including experienced teachers who transfer from one division to another) to be evaluated twice a year. Then all teachers have to be evaluated each school year. The expense and personnel needed for annual evaluations makes this bill controversial even with school boards and administrators.

• Who decides the order of layoff in case of reduction in force?
Currently, local school boards do. Continuing contract does not protect a teacher from termination in a reduction in force. However, school boards can use length of service in making layoff decisions. HB 576 and SB 438 require the employee with the lowest performance evaluation to be released first when a reduction in force is necessary. Employees cannot be retained based on seniority.

• How is an experienced teacher judged “incompetent” and let go?
State law currently defines incompetence as including but not limited to “consistent failure to meet the endorsement requirements for the position or performance that is documented through evaluation to be consistently less than satisfactory.” The teacher accused of incompetence must get notice and opportunity for hearing before being dismissed. HB 576 and SB 438 specify two consecutive years of unacceptable evaluations, two out of three years of unacceptable evaluations, and any combination of needs improvement and unacceptable evaluations in three out of the past five years as just cause to dismiss a teacher. Further and most important, HB 576 specifies that experienced teachers are employed on annual contract, meaning experienced teachers can be denied employment for the next school year without receiving dismissal notice and hearing.


HB 576 and SB 438 will make radical changes in teacher employment—most especially how teachers are judged incompetent and fired. As introduced, the bill provides new teachers a probationary contract allowing “dismissal without cause.” Therefore, new teachers will have no right to notice or hearing, and could be dismissed during the school year for any or no reason. And the bill provides experienced teachers with the limited protection of annual contract. Experienced teachers will have the notice and hearing protection for dismissal during the school/contract year, but can be denied reemployment for the next school year with notice by June 15th. Keep your eyes on this bill and let your Delegate and Senator know how you feel.

I thank Dena for her good work on these bills.

HB 576 will be heard in the House Education Subcommittee on Teachers and Administrative Action on February 2 at 5 p.m. The committee members are as follows (all phone numbers are in 804):

LeMunyon (Chair) 698-1067, DelJLeMunyon@house.virgnia.gov
Cole 698-1088, DelMCole@house.virginia.gov
Robinson 698-1027, DelRRobinson@house.virginia.gov
Yost 698-1-12, DelJYost@house.virginia.gov
Yancey 698-1094, DelDYancey@house.virginia.gov
McClellan 698-1171, DelJMcClellan@house.virginia.gov
Morrissey 698-1074, DelJMorrissey@house.virginia.gov
Keam 698-1035, DelMKeam@house.virginia.gov


SB 438 will be heard by the Education Subcommittee of the Senate Committee on Education and Health. The committee members are as follows:
Blevins (Chair) 698-7514, district14@senate.virginia.gov
Howell 698-7532, district32@senate.virginia.gov
Locke 698-7502, district02@senate.virginia.gov
Black 698-7513, district13@senate.viginia.gov
Carrico 698-7540, district40@senate.virginia.gov

Tuesday, January 24, 2012

A More Complete Summary of the VRS Bills

Earlier in the session, I posted a summary of the retirement legislation that would have an impact on the teacher group (all covered school board employees). Since then a number of additional bills have been introduced, and the VEA Legislative Committee has taken a position on some of these bills. For the others, the committee will take a position at tomorrow’s meeting. What follows is a summary of each of the bills and an indication of VEA’s position.

But, first, I want to commend our Governor for stepping up to the plate and addressing the underfunding of the Virginia Retirement System (VRS). For 20 years, the General Assembly and various governors have kicked the can down the road, shifting the burden for paying the bill into the future. Bob McDonnell is committed to properly funding the VRS. On this issue he is dead right, and he deserves credit.

Here are the bills, and my goal is to stick to the facts.

HB 208 (Jackson Miller) and SB 216 (Barker) - This bill allows retired law enforcement officers to be employed as school security personnel without losing their retirement benefits. The bill requires a gap in service to be determined by the VRS Board of Trustees. It prohibits individuals who are participating in early retirement incentive programs from becoming employed. It stipulates that no additional VRS benefits will result from this employment. VEA supports these bills.

SB 243 (Obenshain) – This bill, among other things not related to retirement, allows a public charter school to decide whether or not its teachers participate in VRS. VEA has yet to take a position on this bill.

SB 298 (Janet Howell) – Requires the VRS Board of Trustees to conduct a fiscal impact analysis whenever the appropriation for employer contribution rates included in the budget bill submitted by the Governor to the General Assembly is less than the Board-certified contribution rate, or when either house of the General Assembly adopts an amendment to the budget appropriating less than the Board-certified contribution rate. VEA supports this bill.


SB 497 (Watkins) – Allows school boards to phase in the 5% employee contribution over a maximum of five years. In other words, your school board could decrease your pay each year by 1% until your VRS employee contribution reaches 5%. VEA has yet to take a position on this bill.


SB 498 (Watkins) – Creates a new hybrid retirement program, administered by the VRS, that contains a defined-contribution and a defined-benefit component. All new state and local employees commencing employment on or after January 1, 2014 would make an irrevocable election to participate in the hybrid plan or the traditional retirement plan. Employees in-service on December 31, 2013 would be given the opportunity to make a one-time, irrevocable election to participate in the new hybrid program. VEA has yet to take a position on this bill.

HB 257 (Stolle) and SB 506 (Wagner) – This bill enables local governments to establish their own defined-contribution plans for new hires. The new hires would not participate in the VRS. The local government or school board would determine the specifics of the plan. VEA opposes these bills.

HB 702 (Filler-Corn) and SB 198 (Marsden) – This bill provides the retiree health care credit to support personnel who are not presently eligible for the credit. VEA supports these bills.


HB 792 (Tata) – This bill allows local government employees to participate in the VRS deferred compensation plan. This would give a VRS-run option to corporate 403(b)/401(k) providers. VEA supports this bill.

HB 1129 (Bill Howell and Chris Jones) – Makes several changes to the VRS benefit structure. Some of these changes affect current employees.

As background, remember that your VRS retirement benefit is currently based on the following formula:

Average Final Compensation X 1.7 X Years of Service = Annual Benefit

Under the provisions of HB 1129, the calculation of average final compensation changes to cover a period of 60 months rather than 36 months. Under current law, the use of a 60-month period applies only to those employees hired on or after July 1, 2010. However, current employees affected by this change in average final compensation may use the 36-month period of calculation for compensation received prior to January 1, 2013, if it is greater than the 60-month period of calculation.

The bill reduces the cost of living adjustments (COLA) to those employees who reach the age for unreduced retirement benefits. Further, it reduces the COLA to the first two percent of inflation plus one-half of the next two percent, for a maximum total of three percent. Under current law, the COLA is the first three percent of inflation plus one-half of the next four percent, for a maximum total of five percent. Employees who are within five years of their unreduced retirement date at that time are grandfathered and not affected by this new cap on the COLA.

Finally, for those hired on or after January 1, 2013, the bill reduces the multiplier from 1.7 to 1.6.

VEA opposes this bill.

SJR 5 (Janet Howell) – This resolution proposes a rather complex amendment to the Constitution. Without going into the details, it requires that the state fund the VRS in accordance with the rate certified by the VRS Board of Trustees. The VEA is yet to take a position on this bill.

HJ 136 (Anderson) SJ 48 (Barker) - Directs the Joint Legislative Audit and Review Commission (JLARC) to study the system for determining eligibility for disability claims under the Virginia Sickness and Disability Program administered by the Virginia Retirement System. In conducting the study, JLARC shall (i) examine and compare the system operating when determinations of eligibility were made by Virginia physicians and health care professionals to the current system where the determinations are made by a contractor, (ii) review the differences in the rates of approval and denial under the two systems, and (iii) review and compare the rate of appeals under the two systems and the decisions of hearing officers regarding such appeals. The VEA is yet to take a position on this bill.

Monday, January 23, 2012

VEA's Lobby Day Message

Here is the message our lobby day participants deliverd to their delegates and senators:

Summary of VEA’s top concerns in the 2012 Session

Broad Principles

 The VEA supports the Governor’s plan to fund VRS, but supports maintaining the defined benefit retirement system and maintenance of the current benefit structure.
 The VEA opposes the diversion of public funds via tax credits or vouchers to create the new entitlement of paying private school tuitions at the taxpayer’s expense.
 The VEA opposes the elimination of continuing contract.
 The VEA will oppose any measures that narrow the taxing authority of local governments or reduce the ability of local governments to fund public schools in this time of extreme fiscal stress.
 The VEA opposes the provisions in the Governor’s transportation plan to reduce the General Fund by over $110 million in the next biennium, and, consequently, take money away from public schools.
 The VEA calls upon the Governor and the General Assembly to give priority to restoring funding for public education if the February revenue forecast provides additional funding.
 The VEA supports efforts to return control of the school calendar to the local school boards.
 The VEA supports efforts to logically fund virtual education programs.
Budget Issues

Fully Funding the Standards of Quality

The introduced budget underfunds the Standards of Quality by over $300 million in the next biennium. The VEA supports fully funding the standards.

Teacher Salary

If the February revenue forecast provides sufficient funds, provide funding for the state share of a 4% salary increase ($146 million).

No salary incentive funding has been provided by the state for teachers since 2008.

The current estimate for the state's share of 1.0 percent increase is $36.5 million per year.

The last time DOE determined the cost of raising Virginia’s teacher salary to the national average they estimated the FY 2012 share of the state cost would be $544 million.

Based on 2008-09 data, the Virginia teacher salary average is now about 12 percent below the national teacher salary average.


Analysis of Statewide Health Insurance - $0.5 million (Feasibility Study)

The Joint Legislative Audit and Review Commission’s (JLARC) December 2010 report on Use of Cooperative Procurement by Virginia School Divisions found that the “State could achieve savings by promoting more cooperative procurement use, and by consolidating school division health insurance plans.” The study asserted that, “Employee health insurance represents the area for greatest potential savings.”

JLARC said the savings would be substantial:

Although the amount of savings through such an arrangement is unknown without an actuarial analysis, three states that either recently implemented or considered implementing a statewide
public school health insurance plan estimated savings of between five and seven percent annually. Assuming Virginia would experience similar savings, between $47 million and $66 million would be saved annually (given $948 million in health insurance expenditures
in FY 2009).

In December of 2010, JLARC made the following recommendation:

Recommendation (1). The General Assembly may wish to direct that an actuarial analysis be conducted to determine the expected fiscal impact to the State, local school divisions, and other local jurisdictions of expanding the State employee health plan to include all public bodies in Virginia. The analysis should consider the impacts, if any, of the change upon State and local Standards of Quality costs for health insurance.

Friday, January 20, 2012

Assault on the Teaching Profession

What’s with House Bill 576, which will deprive Virginia’s experienced teachers of continuing contract status?

This bill is a solution looking for a problem. First, Virginia’s teachers, despite the public perception indicating otherwise, do not have “tenure.” What we do have is continuing contract, which is earned after three years of successful service and satisfactory evaluations. The notion that teachers in Virginia cannot be fired is simply not founded in fact.

Second, the performance of Virginia’s teachers is a significant factor for our state being routinely recognized as having among the best school systems in our nation. This month, Virginia was recognized as having the fourth best school system in the nation by Education Week’s “Quality Counts 2012.” Virginia’s grade was a B. However, under “The Teaching Profession” subcategory, Virginia received a B+ for teacher “Accountability for quality.”

The timing of this proposal could not be worse. It comes at a time when we are shifting to new performance standards and evaluation criteria for teachers, based in part on student performance data, which will be implemented beginning July 1, 2012. Initial implementation of this plan will require extensive training and will require collegial interaction between and extensive training of teachers and their instructional leaders. Incidentally, the Governor provides $415,500 for this training on this new evaluation plan, which works out to $4.21 per teacher.

We can’t afford to make Virginia a less attractive place to teach. Our teacher salary is 12 percent behind the national average, our retirement benefits have been degraded in recent years, and this bill would make Virginia’s teachers stand alone in the region in regard to a lack of job security and access to fair dismissal procedures. One-fifth of our teachers are over 55. Recruiting high quality new teachers to replace those retiring in the next decade will be a major challenge. The passage of this bill will have a very serious, negative impact on this effort.

Please click here to send your delegate a letter urging opposition to HB 576.

Thursday, January 19, 2012

Three Bills/Fight Tomorrow

The Senate Education and Health Committee took up a bill addressed in an earlier posting this morning. SB329, Senator Carrico’s bill to bar children prom pre-school if their parents fail to successfully complete a parenting course, failed to report. The debate was a microcosm of what it appears is happening in the Republican Senate caucus.

I won’t mention the Democrats other than to say that they all voted against it, and that Senator Saslaw was most outspoken in objecting to a bill that punishes children for the behavior of their parents.

The Republicans were divided, with the more conservative and newly elected members (Black, Carrico and Garrett) voting for the bill, and the more experienced Republicans voting against the measure (Martin, Newman, McWaters and Smith).

Over VEA objections, Senator Smith’s bill, SB 278, to change the date on which teachers on probationary contract must be non-renewed from April 15 to June 15 passed unanimously. The rationale for the change is that evaluations will now be based in part, up to 40%, on student test scores, and the scores won’t be ready in time for the April date. If this bill becomes law, teachers will have a longer window in which to seek other employment, but little notice that they do not have a job the following year.

This evening, Delegate Cline’s HB 250, which would have required school divisions to spend 67% of funds on instruction, was amended to only require reporting in the percentage by divisions.

Some of the battles are shaping up, and we’ll start fighting tomorrow. Stay tuned.

Wednesday, January 18, 2012

Bad Bill Killed/Funding Clarification

Much of VEA’s work at the GA is working to keep bad things from happening. This work often goes unnoticed, but it makes a huge difference in the long run.

Yesterday, a bill we had been lobbying against failed in the Standards of Quality Subcommittee of the House Education Committee.

The bill was Delegate Cole’s HB 138. The bill would have required public schools to determine whether each student enrolling in a public school was born outside the jurisdiction of the United States or is the child of an alien not lawfully present in the United States. Essentially, it would have made school personnel perform the duties of Immigration and Customs Enforcement (ICE) agents. This would have been a new burden on our schools, and would have undermined the relationship between school personnel and immigrant communities. An unintended consequence would have been a fear on the part of immigrants that would motivate keeping children away from school. In essence the children of undocumented aliens, some of whom are U.S. citizens, would be punished for the behavior of their parents.

Delegate Bulova made the motion to table and only Chairman Lingamfelter voted against the motion.

One of the statements that the Governor has been repeating like a mantra is harming our efforts to gain funding for public education in Virginia. Whenever he discusses public school funding he says, “… in K-12 education, according to the JLARC report, total funding has grown 41% over the last decade, while student enrollment has only gone up 6%.”

Yesterday, Sarah Herzog of the Senate Finance Committee staff told the rest of the story:

GF and NGF Appropriations Over Ten Years (GF and NGF) – FY 2002 to FY 2011. Per JLARC’s annual report on State Spending, total Direct Aid (GF and NGF) increased 41 percent while enrollment increased 6 percent and inflation increased 23 percent. This results in an inflation-adjusted per pupil increase of about 12 percent over ten years.

Note: GF = General Fund and NGF = Non General Fund

The JLARC State Spending report the Governor quotes points out that the implementation of the federal mandates associated with NCLB and special education requirements had a substantial impact on the cost of public education during this period.

Tuesday, January 17, 2012

Don't Let Them Use JLARC to Destroy VRS

There are a number of bills being considered by the General Assembly. I’d bet my last dollar that the proponents of these bill will all claim that the recent JLARC report, "Review of Retirement Benefits for State and Local Government Employees," recommended what they are doing in their bill. In fact, the Governor has already claimed that the report supports his VRS proposals. In fact, some of his proposals run counter to what the report recommended. The JLARC report explored a number of options, but it did not recommend shifting from a defined-benefit pension. Let's look at each bill, and then at some of what JLARC said.

But, first, let’s look at the brief summary from the JLARC report:

The defined benefit retirement plans administered by the Virginia Retirement System (VRS) are an important part of the total compensation provided to employees and have helped the State remain competitive as an employer, albeit marginally in 2011.

The retirement plans are effective at helping to maintain a stable and qualified public workforce. When paired with Social Security, the benefits provide employees with adequate income in retirement after a full career.

The asset to liability ratio of the plans has declined, which is due partly to the historical tendency for the State to pay less in payroll based contributions than is necessary to fully cover the costs of the plans. If the trend of paying lower than necessary contributions continues, the existing unfunded liabilities ($19.9 billion in FY 2011) will increase.


The General Assembly has options to modify the plans’ provisions to reduce future costs, although benefit reductions could diminish the State’s competitiveness. The General Assembly also has options to introduce an alternative plan for employees, and either a defined contribution or a combination plan would have advantages, depending on the State’s objectives. Neither is projected to produce substantial cost savings over the next ten years and could result in higher costs.

HB 257 (Stolle) – This bill enables local governments to establish their own defined-contribution plans for new hires. The new hires would not participate in the VRS. The local government or school board would determine the specifics of the plan.

What did JLARC say? The report said, “It appears that closing the defined benefit plans would not be advantageous for the State and local governments as employers from either a cost or a human resources perspective, or advantageous for most employees.”

“…retaining the defined benefit plan is a better workforce management strategy.”

SB 498 (John Watkins) creates an optional hybrid retirement program for state and local employees. The employee has 60 days to opt into this plan. If they do not opt in, they go into the existing DB plan. This bill offers a plan containing a defined benefit (DB) pension with a 1% multiplier and a defined contribution plan (DC). The employer contributes to the DB at the designated rate and 1.5% to the DC plus a match to employee contributions up to 2%. The employee would make a mandatory contribution of 4% to the DB and 3% to the DC. The employee could contribute up to an additional 2% to the DC in ½% increments (.5, 1, 1.5, 2).

Here is part of what the JLARC report said about this plan:

With the provisions that would be offered in this optional combination plan, employees at each income level used to measure income replacement could potentially exceed the income replacement targets if they could defer five percent of their salary to their retirement account in addition to the four percent required to the defined benefit portion, for a total of nine percent throughout their career. As discussed earlier in this chapter, however, a nine percent deferment level appears to be unlikely for most employees, given relatively low average salaries. Therefore, the maximum scenario is unlikely. However, even if employees deferred only five percent of their salary, which is the current rate at which State employees must contribute to the existing defined benefit plan, those with salaries at or below $60,000 at retirement could meet the target income replacements.
In the case of a retiree with 37 years of service, he or she will be guaranteed 37 percent of average final compensation at retirement through the defined benefit component, not including Social Security.

HB 1129 (Bill Howell and Chris Jones) – Makes several changes to the VRS benefit structure. Some of these changes affect current employees.

Under the provisions of this bill, the calculation of average final compensation changes to cover a period of 60 months rather than 36 months. Under current law, the use of a 60-month period applies only to those employees hired on or after July 1, 2010. However, current employees affected by this change in average final compensation may use the 36-month period of calculation for compensation received prior to January 1, 2013, if it is greater than the 60-month period of calculation.

In regard to this proposed change, the JLARC report said, “It is less likely that this option alone would significantly impair employees’ ability to retire at an appropriate time and with adequate income. However, this option may provide employees with some incentive to work longer in order to potentially increase the AFC on which their future benefit is calculated.”

In regard to the Cost of Living Adjustment (COLA), first, the bill delays the COLA for early retirees until they reach the age for unreduced retirement benefits.

The report says that, “In addition to cost savings, this option could result in retaining more experienced employees in the State and local workforce because it would create a disincentive for retiring early.”

Second, it reduces the COLA to the first two percent of inflation plus one-half of the next two percent, for a maximum total of three percent. Under current law, the COLA is the first three percent of inflation plus one-half of the next four percent, for a maximum total of five percent. Employees who are within five years of their unreduced retirement date at that time are grandfathered and not affected by this new cap on the COLA.

“PwC’s assessment of this COLA option in 2008 was that it would not have a substantially adverse impact on future retirees’ income or active employees’ ability to retire. In their analysis of this COLA option, Mercer found that it would not significantly impair the State’s competitiveness.”

"Ten years after retiring, this COLA would have resulted in a benefit approximately six percent below the current Plan 1 approach.”


Finally, for those hired on or after January 1, 2013, HB 1129 reduces the multiplier from 1.7 to 1.6.

The report said that, “For lower salaried employees whose income replacement needs are highest, their ability to retire with adequate income would be a concern under this option.”

Further, the report points out that, “Nationally, for states that participate in Social Security, the average benefit multiplier is 1.97 percent.”

"A slightly lower multiplier will be perceived by prospective employees as less generous than that provided by other states, and certainly less generous than that provided to existing employees. It is possible that this change could have a negative impact on the State’s recruitment goals. It would also result in a less competitive total compensation package for newly hired employees. Finally, employees hired under this provision could be paying contributions equal to those of employees receiving greater benefits.”


In general, the report points out that, “it appears that further modifications to the defined benefit plans could diminish the ability of some agencies to recruit qualified employees.”

We have a battle ahead in the 2012 session. Many will be trying to diminish our retirement benefits and the benefits of future education employees. I hope this posting arms you with information which will help you defend our pension benefits as you interact with your senator and delegate.

Monday, January 16, 2012

The Legislative Committees Swung Into Action Today

MLK Day was business as usual at the General Assembly. The Committees and subcommittees began their work, and motorcyclists, gun rights advocates, Soil and Water Conservation Boards, and the Family Foundation all had their legislatives days.

The House Appropriations Committee took up Delegate Massie’s tuition tax credit bill (HB 321) to provide the new entitlement of tax-payer financed tuition to private schools, only to re-refer the bill. It is not clear where the bill is headed at this time.

The Public Education Subcommittee of the Senate Education and Health Committee took up a number of bills. Senator John C. Miller’s SB 185, which calls for eliminating the science and social studies testing at the third grade level was reported. This bill was recommended by the JLARC study of Third Grade Reading Performance in Virginia. This study had recommended that:

“To help schools bring greater focus to reading skill development in third grade, the Board of Education should limit the SOL tests taken by third grade students to reading and math.”

The subcommittee favorably reported SB 185 to the full committee.

The Subcommittee also took up Senator Charles W. Carrico’s SB 329. This bill would have required parents of children participating in pre-school programs to satisfactorily complete “all parenting classes.” If the parents did not do this the child would have been removed from the program. VEA joined others in testifying against this bill, which punishes the child for the actions of his parents, and the subcommittee recommended passing the bill by indefinitely on a 3 to 2 vote.

These two bills should be heard by the full committee on Thursday.

Please check in tomorrow.

Friday, January 13, 2012

VRS Legislation

Friday the 13th is not a good day to have 140 legislators rushing home on Virginia’s highways. But, the first week of the session is over and they are heading home. I wish them safe passage, and I am glad to see things shut down for the weekend.

Today, I’ll address the Virginia Retirement System (VRS) bills that could affect public school employees.

But, first, I want to commend our Governor for stepping up to the plate and addressing the underfunding of the VRS. For 20 years, the General Assembly and various governors have kicked the can down the road, shifting the burden for paying the bill into the future. Bob McDonnell is committed to properly funding the VRS. On this issue he is dead right, and he deserves credit.

Here are the bills, and my goal is to stick to the facts. Once the VEA Legislative Committee provides direction on the bills, we will shift to advocacy of VEA’s positions.

HB 208 (Jackson Miller) - This bill allows retired law enforcement officers to be employed as school security personnel without losing their retirement benefits. The bill requires a gap in service to be determined by the VRS Board of Trustees. It prohibits individuals who are participating in early retirement incentive programs from becoming employed. It stipulates that no additional VRS benefits will result from this employment.

HB 257 (Stolle) – This bill enables local governments to establish their own defined-contribution plans for new hires. The new hires would not participate in the VRS. The local government or school board would determine the specifics of the plan.

HB 702 (Filler-Corn) – This bill provides the retiree health care credit to support personnel who are not presently eligible for the credit.

HB 792 (Tata) – This bill allows local government employees to participate in the VRS deferred compensation plan. This would give a VRS-run option to corporate 403(b)/401(k) providers.

HB 1129 (Bill Howell and Chris Jones) – Makes several changes to the VRS benefit structure. Some of these changes affect current employees.

As background, remember that your VRS retirement benefit is currently based on the following formula:

Average Final Compensation X 1.7 X Years of Service = Annual Benefit

Under the provisions of this bill, the calculation of average final compensation changes to cover a period of 60 months rather than 36 months. Under current law, the use of a 60-month period applies only to those employees hired on or after July 1, 2010. However, current employees affected by this change in average final compensation may use the 36-month period of calculation for compensation received prior to January 1, 2013, if it is greater than the 60-month period of calculation.

The bill reduces the cost of living adjustments (COLA) to those employees who reach the age for unreduced retirement benefits. Further, it reduces the COLA to the first two percent of inflation plus one-half of the next two percent, for a maximum total of three percent. Under current law, the COLA is the first three percent of inflation plus one-half of the next four percent, for a maximum total of five percent. Employees who are within five years of their unreduced retirement date at that time are grandfathered and not affected by this new cap on the COLA.

Finally, for those hired on or after January 1, 2013, the bill reduces the multiplier from 1.7 to 1.6.

SJR 5 (Janet Howell) – This resolution proposes a rather complex amendment to the Constitution. Without going into the details, it requires that the state fund the VRS in accordance with the rate certified by the VRS Board of Trustees.

Thursday, January 12, 2012

Annual Contract - What does our Governor mean?

What does the Governor mean when he says annual contract? My goal below is to summarize the bill in an unbiased manner. Our legislative committee is yet to act on the bill.

Governor McDonnell proposes the elimination of continuing contract. Here is what he said in last night’s State of the Commonwealth address:

“I am asking that we remove the continuing contract status from teachers and principals and provide an annual contract in its place. This will allow us to implement an improved evaluation system that really works and give principals a new tool to utilize in managing their schools. Along with the merit pay pilot program we approved last year, we will provide more incentives and accountability to attract and retain the best and brightest teachers.”

To understand what he is proposing let’s look at the bill, HB 576, patroned by Delegate Richard P. Bell, which, if passed, will implement the Govenor’s proposal. The provisions apply to principals, assistant principals and teachers. For the sake of simplicity, I will use the word teacher to apply to all three.

But, before we dive into the bill it is important to note that the backdrop for the bill is the soon to be implemented “Guidelines for Uniform Performance Standards and Evaluation Criteria for Teachers, Principals and Superintendents.” This is the plan which makes student test scores a major component of teacher evaluation.

What does HB 576 propose. I’ll try to give the broad strokes.

First, the probationary period is shortened from three years to two years (probationary teachers may be dismissed without cause). During the probationary period, teachers will be evaluated twice yearly – mid-year and at year’s end. Under the current system, a teacher with satisfactory evaluations moves to continuing contract after three years of service. Under the new system a teacher with satisfactory evaluations moves to annual contract after two years. Teachers on annual contract will be evaluated on an annual basis.

Second, if a teacher on annual contract has unsatisfactory evaluations for two or two of three years, they can be moved to probationary contract or dismissed.

Assistance must be provided prior to termination.

Teachers on annual contract must be given a “notice of noncontinuation” by June 15 (under current law this notice must be given by April 15), and resignations can be offered after the June 15 date as well.

The bill contains the following reduction in force (RIF) provisions:

“If workforce reduction is needed, a division school board shall retain employees based upon educational program needs and the performance evaluations of employees within the affected program areas. Within the program areas requiring reduction, the employee with the lowest performance evaluations shall be the first to be released. A division school board shall not prioritize retention of employees based solely upon seniority.”

Thanks for checking in today. I'll address the retirement issue tomorrow.

Wednesday, January 11, 2012

Here We Go Again!

Here we go again!

The session has just begun, and efforts to discount the credibility of education advocates are already underway. The truth is the best way to counter these efforts we are seeing to cover up Virginia’s underfunding of our schools.

First of all, what is being said to cloud the waters?

The Governor’s budget address cited the JLARC Review of State Spending to justify his proposed education funding levels saying:

“… in K-12 education, according to the JLARC report, total funding has grown 41% over the last decade, while student enrollment has only gone up 6%.”

However, Page 14 of the same report offers a more telling analysis:

“DOE (Direct Aid) … was not among the ten fastest growing agencies …, having grown more slowly (21%) than inflation, which grew 23% over the period.”

The report points out that the implementation of the federal mandates associated with NCLB and special education requirements had a substantial impact on the cost of public education.

Page 3 says, “this report does not address the merits or adequacy of funding for governmental functions, agencies, or programs.”

In this morning’s Richmond Times-Dispatch, the Speaker of the House, William Howell, said, “The Virginia Education Association is going to say, "We're not getting enough for K-12 education. You're starving us. You're cutting us." Well, in fact, we'll be giving them a good bit more money, but they like to call that a cut because it's not as much as they would have liked.”

Let’s look at the facts. Virginia’s per-pupil spending from state sources ranks 35th in the nation (CQ Education State Ranking 2011-2012). Our average teacher salary is $4,510 below the national average (CQ Education State Ranking 2011-2012). But, we are the 7th wealthiest state in per capita personal income (CQ State Rankings 2011).

In year two of the proposed budget we will be running our schools on $547 less per-pupil than in FY 2009. We have 2,116 fewer teachers in our schools today (VA DOE) than we did in 2009 , but we have about 45,000 more students (Weldon Cooper Center).

We’ll be doing our best to make sure that the decisions regarding funding our schools are based on facts rather than sound-bites. Please help by sharing the facts with your Senator and Delegate.

Thanks for checking in on the first day of the session. Please check this post again tomorrow, and please plan to attend VEA Lobby Day on January 23.

Tuesday, January 10, 2012

Daily Reports Begin Wednesday, January 11

VEA's General Assembly Daily Reports (2012 edition) start up tomorrow, January 11. Be sure to check the blog every day to stay on top on the legislation that can influence schools for better or worse. Robley Jones, VEA Director of Government Relations and Research, distills what you need to know.

Click the link on the right to review VEA's Legislative Agenda for the 2012 session.

Below: VEA President Dr. Kitty Boitnott responds to Governor Bob McDonnell's education proposals at a news conference Jan. 9.