The York County School Board met for a work session Monday where they began to discuss how to approach cutting almost $1.8 million from their proposed 2014 budget after the Board of Supervisors approved a 1 cent real estate tax rate increase.
The approved tax rate came after more than a month of discussion between the supervisors about a 2.3-cent tax rate increase that would have allocated $2.3 million in additional funding for the school division. The 1-cent increase left the school division with $1.17 million in additional revenue, necessitating the reduction.
The school board members expressed disappointment in the supervisors’ decision, which came with no chance for public feedback on the 1-cent rate increase.
Nothing was set in stone at Monday’s meeting. The school board suggested a number of items for school division staff to explore with the intention of discussing them with more detail at a meeting next week. The school board also expressed the desire to host a public hearing once they had a more firm idea of the direction they would take with the budget.
The items and how they differ from the original proposal are as follows:
- A 2 percent rise in employee contributions to the Virginia Retirement System with a corresponding 2 percent salary increase to offset that expense for employees. The original 2014 proposal called for a 4 percent rise in employee contributions to VRS with a 4 percent salary increase to offset that cost.
- A 0.2 percent salary increase to offset payroll tax increases that would come with the added salary for VRS contributions. The original proposal asked for a salary increase of 0.8 percent across the school division to offset these payroll taxes.
- A potential change to the employee healthcare plan that would raise premiums by 20 percent while leaving drug payments where they are now. The original proposal wouldn’t have changed anything on the healthcare plan, leaving premiums fixed at their current rates.
Those items would produce more than$1 million in savings, though eliminating jobs within the division may be necessary to offset the $1.8 million gap. Superintendent Eric Williams said they should begin with the assumption that any cuts would be through attrition rather than dismissal of workers.
The VRS contributions are mandated by the state. Each locality was given the choice to have employees begin funneling 5 percent of their salary to the system with a 5 percent salary increase to offset that cost or to implement the contributions and corresponding salary increases in steps. Employees of York County received the full 5 percent, while the school division went with the 1 percent last year.
When the decision as to how to approach the VRS contributions was being made at the county level last year, the school board believed the county would be implementing the new requirement over five years instead of one. In order to receive an additional $3.9 million in funding, the school board was required to sign a memorandum of understanding that any additional money more than $150,000 that was awarded to the state would go to the county. When the school division found out it would receive an additional $750,000 in state funding, they asked the supervisors to let them use that money to go with the full 5 percent increase as the county had done, but the supervisors refused and made them hand the money over to the county.
Because of the 1 percent contribution, employees that began working for the school division after July of last year are forced to contribute the full 5 percent required by VRS, yet they are only receiving the 1 percent increase that was approved last year.
The school board agreed that a 2 percent salary increase for school division employees was still on the table. The composition of that increase remains unclear — it could come in the form of a direct salary increase or a combination of a salary increase and a step increase.
The school division is facing rising costs in healthcare and VRS mandates while the amount of money they receive from the state has shrunk by almost $10 million since 2009.
