Schools, Municipalities Fight Virginia Pension System Change

The budget of every local government across Virginia is at stake as a coalition of municipalities and school systems opposes a measure that would reorganize the state retirement system. The group is asking the governor to reject the bill, which passed in the General Assembly shortly before its legislative session ended on March 10.

The Virginia Association of Counties, the Virginia Association of School Superintendents, the Virginia Municipal League and the Virginia School Boards Association are all calling on Republican Governor Bob McDonnell to reject the plan to change how the Virginia Retirement System is funded, at least for this year. 

At issue is a measure approved by lawmakers that would increase salaries for school employees and local government workers by 5 percent, with the money going toward retirement programs. 

Mike Amyx, executive director of the Virginia Municipal League, says the higher salaries would create more taxes, which would mean employees would have reduced take-home pay. And local governments would be out tens of millions of dollars, he adds.

"The timing is absolutely terrible," Amyx says. "Schools and local governments are deeply into their budget process, and they've been thrown a curve ball as to how they are going to come up with the additional cost."

The coalition supports a reenactment clause, which would temporarily pull the bill and give local governments an opportunity to understand the ramifications.