The York County School Board passed a budget for 2014 after agreeing to almost $1.8 million in cuts — including a switch to the county’s healthcare plan and the elimination of six teaching positions — to offset a less than expected contribution from the Board of Supervisors.
The board voted 3-2 to pass the budget, with board members Cindy Kirschke and Robert George representing the no votes.
The changes from the proposal are as follows:
- Employee contributions to the Virginia Retirement System will rise 2 percent, with employees receiving a pay raise equal to that amount to offset their out-of-pocket cost. The original proposal asked for a 4 percent increase in contributions.
- Employees receive an additional 0.2 percent raise to cover increased payroll taxes due to the 2 percent VRS raise.
- Employees will now pay their share of dental costs, which will save the school division about $20,000 annually.
- The healthcare plan will switch from the current plan to the one offered to employees of York County.
- Six full-time teaching positions will be eliminated. Those cuts are expected to come from attrition rather than employee dismissal.
A 2 percent salary increase that has been the subject of discussion among school board members since the budgeting process began remains in place.
School board member Page Minter said changes to the healthcare plan were necessary to avoid recurring changes in the future.
“At some point you have to face it and do what’s best overall,” Minter said.
Kirschke wanted the school board to continue to explore ways to keep the current healthcare plan in place. Some areas where the healthcare plan will change are the maximum out-of-pocket expenses for a hospital stay will change from a flat $250 per stay to a rate of $200 per day up to $1,000 per hospital stay. Drug prescription co-pays will also rise by $5 to $10 depending on whether the drug was generic, brand name or patented brand name.
She also wanted to look into reducing the number of teaching positions that would be cut by contributing 1 percent to VRS instead of 2 percent. VRS requires employees of localities and school divisions to contribute 5 percent of their retirement funding, with employers giving corresponding pay increases to make up the difference. The option was given for the increase to be implemented all at once or to be spread out over five years. The school division implemented 1 percent last year.
Vice chairman Mark Medford echoed his comments from a meeting Monday — he said that no matter what direction the board went, there would be some people who are unhappy.
“We have a rich, premier plan right now,” he said of the school division’s healthcare plan. “It’s reached that point of what do we do to remain solvent?”
Chairwoman Barbara Haywood said the decision on what to cut from the proposal was “one of the toughest decisions in my 24 or 25 years on the school board.” She said she changed her mind from an earlier approach that would have preserved the school division’s healthcare plan while increasing employee premiums by 20 percent because that would have required 11 teaching positions to be eliminated.
George said that by keeping the current plan, it was “in a sense kicking the can down the road.” By changing the plan now, the likelihood of a premium increase next year is much lower. He said he would have rather upped VRS contributions by 1 percent, and taken the money saved — about $200,000 — and used it to give a one-time payment to division employees; that would represent about a $118 payout.
In crafting the 2014 budget, the school board was allocated $1.17 million in additional funding from the county than what it received in 2013 — that pushes the county’s allocation of funding to the school division to more than $50 million.
The school board originally asked for a $2.9 million increase in funding from the county. When York County Administrator James McReynolds presented his proposed budget to the Board of Supervisors, he asked for a $2.3 million increase in funding, which would have left the school division with a $600,000 shortfall rather than the almost $1.8 million they dealt with over the past few weeks.
The Board of Supervisors spent much of their budget discussions talking about McReynolds’ proposal, with the $1.17 million increase instead of the $2.3 million increase not coming up at a meeting until two days before the vote.
Funding from the county has become increasingly important as the state and federal governments slash how much money is sent to the school division. Since 2009, the school division has lost more than $10 million in funding from the state government alone. Sequestration has cost it hundreds of thousands of dollars more.
In the past few years, the schools have faced an increase in contributions to VRS of $6.1 million, said Dennis Jarrett, the chief financial officer for the school division.
York County gave its employees the full 5 percent VRS increase last year. The school board wanted to give its employees the full 5 percent increase when it was going through the budgeting process last year. The supervisors agreed to give the school board $3.9 million in additional funding last year; however, that was contingent upon the board signing a memorandum of understanding that said any additional state monies the school division above $150,000 would have to be given to the county.
The school division then received an additional $750,000 in state funding and was required to give most of that to the supervisors. Haywood wrote a letter to the supervisors last year asking to keep more than $700,000 to finance the full 5 percent VRS increase, but the supervisors did not agree to the request.
That leaves the school division in the position where all employees hired after July 1 of last year are required to contribute the full 5 percent to VRS without a matching salary increase, effectively lowering their take home pay. By the start of the next school year, more than 200 employees will be in that position, said Superintendent Eric Williams.
A York County spokesperson said the money from the memorandum of understanding was deposited into the county’s general fund and has not yet been designated for a specific purpose.
The increased VRS costs come on top of $4.7 million in additional healthcare costs in the last two years.
Furthermore, the school division must contend with a number of mandates from the state and federal governments, some of which come with little or no funding. In addition to the mandated VRS increases, the school division has been required to pay for mandated special education services, Jarrett said.
Other mandates include costs related to Standards of Learning testing as prescribed by the No Child Left Behind Act. The school division is on the hook for coordinating testing at each school, as well as investing in technology and the support staff necessary to operate that equipment.
In the face of declining revenues and soaring expenses, the school division has slashed a number of jobs. With the six jobs that were cut with Wednesday’s vote, the division will have eliminated 132 jobs in recent years. Those positions include school board staff, maintenance department staff, support positions in schools like clerical positions, para-educators and a guidance counselor.
