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Kaine Proposals Cut State Employee Take Home Pay Governor Kaine released his proposed 2010-2012 biennium budget on December 18. If enacted, state employees will see a reduction in take home pay. Governor McDonnell has indicated that he will work with the leadership of the General Assembly money committees to enact his own budgetary priorities rather than offering specific budget amendments to modify his predecessor’s budget. Governor McDonnell indicated his opposition during the fall campaign to some of the actions that were included in Governor Kaine’s outgoing budget, particularly the proposal for current state employees to begin contributing towards their retirement without some corresponding action to offset the effect on take home pay. This sets the stage for action by the General Assembly’s money committees on February 22, when the House Appropriations and Senate Finance Committees unveil their changes to the Kaine budget The VGEA lobbying team is at the General Assembly daily working for the VGEA Legislative Agenda (see related article) which would reverse many of the Kaine proposals. Below is the list of actions proposed by Governor Kaine that directly affect State employees and retirees: • Employees will contribute 2% of gross salary towards the cost of retirement effective July 1, 2011. • Employee health insurance premium costs will increase by 5.6%. • Eliminates prescription coverage for non-sedating antihistamine and erectile dysfunction drugs. • Suspends the employer cash match for the Deferred Compensation program. • Changes the definition of “continuation of a prior disability”, and thus eligibility for supplemental short-term disability benefits, under the Virginia Sickness and Disability Program to 45 days. Currently, an employee's disability which is related or due to the same cause or causes as a prior disability for which supplemental short-term disability benefits were paid is considered to be a continuation of the prior disability if the employee (i) is eligible for benefits payable under the Act, whether or not he is receiving such benefits, and (ii) returns to his position on an active employment basis for less than fourteen consecutive calendar days, or twenty-eight consecutive calendar days if the short-term disability is due to a major chronic condition. • Eliminates 1,870 state employee positions with an anticipated 664 employee layoffs, with most layoffs concentrated in the Department of Behavioral Health and Developmental Services. • Abolishes the Department of Employment Dispute Resolution, merging its functions into the Department of Human Resource Management. • Caps the post retirement cost-of-living increases for all persons employed after July 1, 2010 as follows: The annual increase in the Consumer Price Index shall be considered only to the extent of two (currently three) percent plus one-half of such additional increase up to six (currently seven) percent. • Raises the minimum retirement age for all persons hired after July 1, 2010 from 50 to 55 years of age. • Prohibits all employees hired after July 1, 2010 from participation in the Virginia Sickness and Disability Program until they have completed at least one year of continuous service after employment or re-employment. • Limits all persons hired after July 1, 2010 to not more than 60 percent of the employee’s creditable compensation under the short-term disability provisions of the Virginia Sickness and Disability Program until they have completed at least five years of continuous service after employment or re-employment. • There are no changes in co-pays for health insurance or prescriptions.
• Maintenance drug (90 day supplies) will have to be purchased from a soon-to-be established retail/mail order network. This network will include retail pharmacies and mail order providers. The employee will be able to purchase through either method at the same co-pay currently charged for mail order maintenance drugs.
• No salary increase.
• No additional furlough days