Amid
the tumult of the budget approval earlier in the week, the General Assembly
also “accepted” Gov. McDonnell’s amendments on Wednesday to bills that will
make broad changes to Virginia’s public employee pension system.
Virginia localities got a financial break when the Virginia House of
Delegates and Senate gave the okay to Gov. McDonnell’s proposal to permit
cities, towns and counties a five year window to phase in pay raises on the
order of 5% that teachers and local employees will be required to add to the
underfunded Virginia Retirement System (VRS).
County and city heads requested the amendment due to concerns about the
immediate and large expansion in payroll expenses they will incur that would
force a raise in taxes or a cut in services.
In a statement after the passage of the VRS reforms in the General
Assembly, Gov. McDonnell struck a high-minded note. “We owe it to our dedicated
and hard working teachers, police officers and state employees to ensure that
their retirements will be there for them when their public service concludes,”[1]
McDonnell stated.
Indeed, the implicit contract between state employee and state government,
that the former should expect a reasonable retirement package from the latter
in lieu of greater pay and greater opportunity for advancement in the private
sector, is not only right on a practical level, it’s simply the right thing to
do morally.
But while McDonnell’s statement had all of the bells and whistles of a
political speech, it’s not farfetched to assume that Virginia’s GOP may come
back to this issue in the near future to undermine Virginia’s “implicit
contract.”
Virginia,
like every other state in the U.S., should continue to respect the “implicit
contract” between state employee and state government. Turning our backs on
those who have served the commonwealth to save a few dollars is a recipe for a
host of negative outcomes.
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