Localities are already cash strapped. Having dodged a bullet on de-evolution of state roads, another bullet seems to have been put into the revolver… and the trigger finger is being squeezed.
SB 497 is the bill. The deal on VRS? Force local employees to pay the 5% VRS contribution… and then force localities to give employees a 5% raise.
Unfunded mandate? You bet.
Tax increase? No question.
Richmond passing its responsibilities on to localities once again? Yep.
The worst part? It doesn’t fix the Virginia Retirement System by one bit — the costs merely shift from the state to 134 cash-strapped localities whose only tools to meet this enormous cost will be through property taxes, real estate taxes, meals taxes, BPOL taxes, and any number of regressive tax hikes to meet the gap.
Does that sound like fiscal conservatism to you?
So what’s the fix? Give localities the OPTION of raises rather than mandating the expense.
What’s worse for most localities is that many are on the verge of finalizing and voting up their advertised rates to taxpayers (Fluvanna will be advertising our rate on Wednesday). How are we possibly going to go back into our budget and find the hundreds of thousands of dollars necessary to provide a 5% salary increase to teachers, deputies, and staff if Richmond sticks us with the bill?
…and can 134 localities turn on such a dime? Doubtful.
McDonnell can, at a masterstroke, kill two birds with one stone. Make the contribution optional for localities, and in doing so relieve local governments of the burden of the VRS unfunded mandate while introducing to localities the option of de-leveraging. It’s a rare opportunity… one I hope Governor McDonnell and the General Assembly takes.
