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Changes to the Virginia Retirement System — a fund for state employees — continues to dominate budget discussions as the Fairfax County School Board prepares its 2012-13 spending plan.

Fairfax County Public Schools employs about 23,000 people, of which 93 percent are school-based employees.

Under changes to VRS, which were made by state legislators this year, public school employees participating in the fund will be required to pay a 5 percent employee contribution. That contribution currently is paid by local school systems.

The state also is requiring school systems to offset the effect on employees by increasing salaries by 5 percent.

Superintendent Jack D. Dale has recommended the school system fully implement the change this coming fiscal year rather than phase in the shift.

Full implementation would equal a 1.7 percent pay increase for current employees, but no market-scale adjustment in salary. The new, average starting salary for teachers would be $45,551 — a 5 percent increase from previous year meant to offset the retirement fund changes. Most of the alternatives to the superintendent’s proposed retirement shift resulted in lower starting salaries.

Educator advocacy groups favor another option being considered by the School Board, which involves phasing in the VRS changes during the course of five years, which would allow for a 4 percent market-scale adjustment for teachers this coming school year.

“We understand the General Assembly handed you a mess in dealing with changes to the [VRS]. ... It does nothing to benefit VRS and hurts employees and localities,” said Fairfax Education Association President Michael Hairston during a public hearing on the budget. “The salary increase generated by the change in [retirement] contribution is less than 2 percent. We ask that you fund a real increase in salary for all employees. … Making that change will have a negative impact on employees long term.”

During a budget discussion on May 17, School Board members said they favored the superintendent’s recommendation because of future unknowns that might affect the school system’s funding.

“If our goal is to maximize salary, then a one-year implementation plan is best for our employees because it gives everyone a 5 percent salary increase that goes forward,” said School Board member Ted Velkoff (At-large).

School Board Chairwoman Jane Strauss (Dranesville) said, “I’m very concerned about our ability to set money aside and push it forward. The state has spoken and we’re going to have to make this VRS shift. There is no forgiveness on this.”

Several other School Board members also said they were concerned about how future funding levels could affect the school system’s ability to balance paying for the VRS shift and in-classroom expenses.

“We have the funding to accomplish this now and I would rather use the whole $52.2 million to affect employee salaries now. … I’m also very concerned about our ability to put money aside in the future and how that might affect the revenue we’re able to get from the Board of Supervisors,” said School Board member Kathy Smith (Sully). “We don’t know what’s going to happen with the [Local Composite Index]. We don’t know what’s going to happen with other revenue sources. I think we’re taking a risk by delaying and putting this out to the future.”

She said the VRS option preferred by education advocacy groups was not realistic because of the level of funding the school system currently receives.

Although the School Board voted on an advertised $2.4 billion 2012-13 budget in February, which included an 8.9 percent increase in funding, the Board of Supervisors voted for a 4.5 percent increase. Within the county’s adopted $6.7 billion budget, the school system will receive $1.85 billion — or about 53 percent —of the county’s general fund. Other funding for schools comes from state and federal allocations.

To make up the difference in funding levels, School Board members are discussing possible cuts to the advertised budget, as well as factoring in the changes to the VRS.

“The impact to the salary isn’t as much as we had hoped it to be, but when you look out to the future the cumulative effect for our employees’ salary is the greatest except for [the option favored by the advocacy groups],” Smith said.

The School Board was scheduled to adopt its budget Thursday during a regular meeting. This meeting was scheduled for after the Fairfax County Times’ print deadline. For the latest on the school system’s budget visit www.fairfaxtimes.com Friday.

hhobbs@fairfaxtimes.com