RICHMOND, VA (WWBT) - Some serious belt tightening could be on the horizon for state and local governments as the governor works to pump more money into the critically underfunded Virginia Retirement System. The governor wants to increase employer contributions to $2.2 billion!
According to a recent legislative study: the state's pension plan is short nearly $20 billion. Governor Bob McDonnell said that's unacceptable.
State and local governments would need to make some tough choices on where to cut back. One county leader said the governor's proposal makes sense.
During his monthly radio call-in show at WRVA, Governor McDonnell said a significant increase in employer contributions into the state pension plan is one step toward closing a major gap.
"I want to look state employees in the eye and say, when you retire your money will be there. You can't do that today," said McDonnell.
Under the governor's two year plan, the state would pump nearly $600 million into the VRS. $1.6 billion would come from state and local governments for teachers' retirement.
Chesterfield County Administrator Jay Stegmaier said local governments will need to come up with a substantial amount of money to fund their share of the cost for teachers.
"It is a very tight budget and I think in terms of the VRS contribution, we've identified this. Everyone knew it was coming and we prepared for it," said Stegmaier.
Stegmaier said they'll get a better picture when the governor releases his budget.
"If that budget continues to fund the numbers of teachers and support staff, we need to maintain a quality education, then we will be able to work this out," said Stegmaier.
McDonnell said the state is also going to have to set some spending priorities.
He said there are thousands of programs in the proposed budget that need a closer look as far as whether to maintain the same funding or phase out entirely.
One program McDonnell said doesn't need funding anymore is public broadcasting.
"There is revenue growth that will, in part, fund these new initiatives but part of the money is coming out of savings," said McDonnell.
As far as employee contributions, McDonnell said any proposals would be brought up during the General Assembly session in January.
The VRS proposal is part of the governor's budget to be announced Monday.