After meeting on Thursday afteroon to discuss the County budget, the Clarke County Supervisors appeared divided on a proposed two-percent pay raise for County and Public Schools employees as well as a possible two-cent tax hike that could offset costs if a pay raise is approved. The Supervisors also heard news of a new unfunded mandate from Richmond designed to repair the Commonwealth’s ailing retirement system but would cost Clarke County taxpayers an additional $67k per year.
With the County’s budget now on its final track for a planned April 18th approval pending an April 11 public hearing, County lawmakers made last minute budget changes on Thursday designed to reduce a pending budget deficit.
One significant change suggested was a $150K cut to the Clarke County Public Schools operating budget.
Supervisor John Staelin (Millwood) characterized the suggested school funding cut amount as “arbitrary” and an attempt to balance the pain associated with budget cuts across all areas of County spending. Staelin also expressed reservations about increasing school funding given what he sees as recent and pending flat school census populations.
“The schools have been increasing staff even though they’re expecting the same level of students this year and next year,” Staelin said.
Staelin then led a discussion of County government’s staffing levels which County administrator David Ash said had declined by eight positions in 2011 with an additional three-position reduction in force planned for FY2013. One of the FY2013 cuts, according to Ash, is the County’s real estate assessor.
Clarke County Commissioner of Revenue, Donna Peake, previously held the County’s real estate assessor position before being elected to her current office as Revenue Commissioner. The real estate assessor position had been vacant since Peake’s election.
Supervisor Barbara Byrd (Russell) added that she believes that the County does an excellent job of serving its 14,500 citizens with its approximately 65 full-time employees.
“We don’t have any fluff here” Byrd said.
Much of Thursday night’s discussion appeared aimed at finding a consensus approach for addressing the potential budget deficit facing the County. To address the deficit the Supervisors are must either further reduce County spending levels through additional cuts in County government and Schools or generate more revenue through a tax hike.
Joint Administrative Services director Tom Judge provided the Supervisors with two possible revenue generation scenarios; a $0.015 tax hike which would leave the County with a $554K deficit or a $0.02 tax hike that would reduce the deficit to $447K. The tax rate hike would mean either a 2.4-percent or 3.2-percent increase, respectively, for Clarke County taxpayers.
Neither tax hike option appeared to have the Board’s full support.
“In the end we will still be spending $390K to provide employees with a two-percent pay increase,” said Supervisor David Weiss (Buckmarsh). “That’s just not something that I’m comfortable with.”
Weiss said that the fundamental question is whether public employees should be receiving pay raises when private sector employees are not.
“We’ve asked our County government departments to defer their needs” Weiss added. “In the larger scheme of things this just doesn’t jive.”
No consensus vote was taken on either the tax increase proposition or regarding a pay raise for employees, however, both issues will be addressed at the Supervisor’s next regular meeting on Tuesday when they are expected to finalize the budget prior to April’s public hearing.
Judge also briefed the Supervisors on a recent vote by the General Assembly to address underfunding in the Virginia Retirement System by mandating a locally funded five-percent pay raise for all Virginia-county and school employees that would then be offset by a reduction in the VRS contribution to the employee’s retirement account by the County.
Although the financial slight-of-hand by Richmond theoretically should create a net-zero result for County coffers, Judge said that minor variances in the way that benefits are calculated on the higher gross pay caused by the five percent increase means that the change will effectively cost Clarke County $67K per year.
On an employee level, Judge said that a government or school employee earning $30K annually will see a net reduction in take-home pay of $53.70.
Although the proposed change has yet to be signed by Governor McDonnell, Judge said that there is already discussion in Richmond that the law will be passed along with an amendment to phase the requirement in over five years.
None of the Supervisors voiced support for the approach being proposed by the General Assembly.
“This is another example of the Commonwealth foisting costs unto employees and county governments,” said Supervisor Staelin. “This change has income implications to employees and tax implications for Clarke County taxpayers.”
Staelin characterized the move as an attempt to balance the Virginia Retirement System’s funding problems on the backs of municipalities and employees.
“It’s not a question of the VRS system needing reform,” added Supervisor Weiss. “It’s a question of how you implement the reform.”
The Clarke County Board of Supervisors will meet again on Tuesday, March 20, 2012 at 1:00pm to hear public comment on the proposed budget.