- Last Updated on 02:02 PM 03/26/12
- BY Tiffany Hudson
Halifax County School Board members continue to scratch their heads as they deal with filling a $1.8 million budget gap created largely by Virginia Retirement System reforms being proposed by the state.
The eight-member board held its second budget work session Thursday to discuss the proposed budget for the 2012-13 school year.
However, without a state budget, Chief Financial Officer Bill Covington had very little new news to offer school board members concerning the proposed budget.
He reviewed the state mandated 5 percent VRS raise in salaries proposed to be phased in over a five-year period to offset retirement costs.
In exchange for contributing 5 percent of their paychecks to VRS, school employees will get a 5 percent raise, and this will be extended over the next five years meaning school employees could see a 1 percent raise paid out each of the next five years.
However, Covington pointed out to school board members it is not an even wash.
When broken down, Covington explained the VRS mandate would require more than a one percent raise.
In actuality it would be a 1.01 percent increase due to the employee’s raise in Social Security and Medicare, and the employee won’t be bringing home the same salary.
Employees could find themselves on the losing end of this proposal, according to Covington, because higher earnings may place them in a higher tax bracket causing their actual take-home pay to be less due to the contribution to VRS.
Although the school board won’t have to pay the VRS, it will have to pay more toward the employees’ Social Security and Medicare taxes and will lose money toward VRS covered positions, a total of $39,580 in all.
“VRS is going to get its money. It’s going to end up with the same amount no matter what,” he added.
But the school system will be the one finding itself on the losing end of this proposition, the chief financial officer maintained.
That’s why the Virginia School Board Association, Virginia Association of School Superintendents, Virginia Association of Counties and Virginia Municipal League are all lobbying Governor Bob McDonnell to make the 5 percent VRS mandate optional.
According to Covington, these proposed changes in VRS will affect the budget document bottom line.
However, not all school employees are VRS covered positions forcing school board members to make yet another decision -— whether or not to give all employees a 1 percent raise.
“There’s one group of employees, bus drivers, who aren’t covered under VRS, and you all have to ask yourself if you want them to go with everyone and give them the one percent raise,” said Covington.
Board members have seen only the governor’s figures, which leave the school dealing with nearly a $2 million deficit as they begin work on the school budget.
Superintendent Paul Stapleton told board members Thursday night the senate finance committee had unanimously passed a revised senate budget that day which would be referred to the entire senate this week.
“This will alter the governor’s budget, and you won’t know things about it until probably your work session next week, but that’s the latest thing that we’ve got,” he added.
Covington outlined items the school system previously had cut from budgets in its effort to save positions between 2008-12. These included:
• Textbooks: $312,821
• Library book, supplies and periodicals: $53,561
• Instructional materials and supplies: $50,000
• Professional improvement: $275,000
• Repairs and maintenance: $75,000
• Contracted maintenance: $225,000
• Replace machinery and equipment: $10,000
• Purchase original machinery and equipment: $75,000
• Technology initiative: $216,000
“It was reductions we made, not in personnel, but everywhere we could cut in an effort to save positions,” Covington explained.
As board members reviewed the draft budget for the coming year, Covington explained the expenditure side and the revenue side continues to reflect “a big gap.
“I think this is where we will pause and go into closed session,” he said.
Board members then convened into closed session where they discussed personnel issues.
When board members emerged in open session, no action was taken.