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Wise County School Board considering change to sick leave policy

January 22nd, 2014 8:46 pm by Stephen Igo

Wise County School Board considering change to sick leave policy

WISE — The Wise County School Board eyes changes to its sick leave policy that would only affect new hires. All current employees would not be affected.

The changes are driven by the needs of the Virginia Retirement System (VRS) in the process of seeking long-term financial stability. The VRS rates school divisions and employees pay are also likely to increase in 2014-15 by around 15 percent, according to projections provided to the school board on Monday.

The VRS-driven sick leave policy changes are part of the system’s “hybrid plan” school divisions must adjust and apply, and those changes eyed by the Wise County School Board would apply for new hires only.

Those changes include a maximum of 60 accumulated sick days per employee and acceptance of 60 transfer days. New hires would not be eligible for the school division’s sick leave bank.

School division employees earn one sick day per month, and employees can accumulate those days throughout their careers with a lump sum payout — based on set rates that are fractions of an individual’s final single day pay rate — upon retirement of unused sick days. Current workers can also donate some of their accumulated sick days to a sick leave bank that can be drawn on by any employee member of the bank who has an extended illness and has depleted his or her own sick days.

Schools Superintendent Jeff Perry told the board on Monday that sick leave banks are beginning to attract scrutiny from the Internal Revenue Service, and state school officials have advised school divisions not to start a sick leave bank if they don’t already have one and if they have one to begin looking into potential legal taxable income entanglements.

Accumulated sick leave time is not taxed until it is “cashed” in upon retirement or used in the course of an illness. But Perry said the IRS is apparently beginning to scrutinize the practice of providing deferred taxable income from one party to another without paying the tax once that benefit is provided.

In any event, Perry emphasized the sick leave policy changes now under review by the school board will apply to new hires only, with the current work force grandfathered in to the existing policies.

In other matters, the board got a very preliminary preview of budget matters for next fiscal year, including an expected increase in the school division’s composite index, the state formula for funding public school divisions. Projections are for Wise County’s composite index to go from .2045 to .2538.

That increase — driven in large part by the extra tax base now in effect as a result of Virginia Dominion Power’s new electricity generating station in St. Paul — will result in about $1.7 million less state funds for Wise County schools beginning in the 2014-15 fiscal year.

Wise County, experiencing a projected $3 million deficit largely as a result of plummeting coal severance funds, is unlikely to make up that difference, Perry told the board. Perry said his administration would like to build a budget for 2014-15 around a limited number of expenditure priorities, including improving employee take home pay as much as possible, addressing the chronic health insurance cost issue by offering employees three options, maintaining classroom instruction levels and addressing safety issues as needed.

“It’s going to be a tough year,” Perry said, “but if we can build a budget around those priorities,” then his staff and the board can address other facets of the budget as best as can be devised.

The health insurance options Perry has proffered for the board’s consideration would be for employees to choose a “cadillac” type of coverage that would mean higher out-of-pocket costs to the employee, a plan based pretty much on what employees now have, or the lowest cost option of catastrophic coverage only.

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