Mar 21

VRS Legislation Update

According to the VEA, the fiscal impact to instructional personnel of the legislative changes to VRS over the next 20 years could be as high as $3.8 Billion – that is $3.8 B less in benefits owing to the number of “offsets” the General Assembly is proposing in order to make VRS whole and to maintain the system with less state money. Personnel with less than 5 years and those with less than 20 years in the system will be hurt the most.

Educators are calling for time to figure out this complicated proposal that was hastily decided in the last few hours of the 2012 Session. Basically, as far as schools are concerned, the Governor and a few legislators pulled together the worst parts of the two bills introduced to re-vamp the VRS and revise existing plans and then leveraged their control over other deals, such as those related to transportation, to get the votes to pass this plan to fund VRS and save the state money. Unfortunately, that leaves localities and employees with a huge tab and leaves school employees and others with broken promises.

The plea from localities and educators alike will be, “Time out!” because local governments and local school divisions have not been able to decipher how all the pieces fit together nor how to advise employees and figure how to pay the bill. Add to these concerns the fact that most budgets for next year have been set, and you have a confusing mess that is on track to become state law on July 1 (with a delayed enactment date). Initial reports from local school divisions are dismal, with some cost estimates in the millions.

To make matters worse it is possible that the Governor may ask for an amendment that the 5% employee contribution and attending local match be raised to 6% when the Veto Session convenes on April 18.

If this leftover piece of legislation is significant to you from a financial standpoint, then contact your local General Assembly members now before the April 18th veto session takes place in Richmond.