GOV. WARNER'S SECRETARY OF ADMINISTRATION ISSUES MEMO ON STATE BUDGET

Sandra D. Bowen, secretary of administration for Gov. Mark Warner, sent a memo to all state agencies Friday to clarify some of the governor's budget proposals and specifically detail his reasons for cutting salary increases from the introduced budget.

According to the memo, salary increases "would have required deeper cuts in agency budgets, and more reductions in funding for programs that many Virginians consider essential."

Bowen noted that the new budget proposal includes an additional $37 million to minimize premium increases to health insurance coverage and increase the portion of each employee's insurance premium that the commonwealth pays. In addition, the proposal eliminates the previously proposed deductible of $150 per family and added co-insurance.

Next week, an announcement will be made regarding funding for the Virginia Retirement System. "The Governor's amendments change the rates paid by state agencies and institutions of higher education to the Virginia Retirement System (VRS) for retirement contributions made on behalf of state employees � in part by using the contribution rate that the VRS actuary recommended, and in part by clearing up accounts for which no beneficiary is known. Although these changes do allow budget savings in this year and in the next biennium, let me assure you that the retirement system is sound and your benefits will not be reduced now or in the future by these actions. The commitment that the Commonwealth has made to you regarding your retirement benefits remains unchanged," Bowen explained in the memo.

She concluded, "Governor Warner is committed to finding ways to recognize the value that each state employee brings to state service. We will be aggressively looking for ways to encourage, support, recognize, and reward your efforts. We know that each of you is the face of state government to every Virginian you see, talk to, or deal with each day."