Friday, March 19, 2010

A Balanced Budget Through Salary Cuts & Lower Standards

Today, the Virginian Pilot reports that Virginia school spending will really be $700 million less rather than the $250 million reduction in Direct Aid reported regarding the State Budget deal that I discussed here and here. Why is that?

Many localities also use the state retirement plan to fund their school system's retirement. The General Assembly also passed legislation this year "adjusting" actuarial formulas regarding when people will retire and rates of return to reduce our payment requirements. The legislation also required new employees to contribute 5% of their salary towards their retirement - a 5% pay cut. Pay freezes are one thing - 5% cuts are entirely different. This will effect our ability to compete for teachers with other jurisdictions and professions. Another reasons I voted "No."

The state also allowed our localities to increase their class sizes and lower certain academic standards.

The effect? Localities also have to spend less on retirement, thus $700 million total less spent statewide on schools. In other words, we cut teacher salaries which were already 37th in the United States.

So is lowering our standards and cutting salaries going to have any long-term effects? You decide.

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