INFORMATIONAL

TO:

Division Superintendents

FROM:

Jo Lynne DeMary

Superintendent of Public Instruction

SUBJECT:

Amendments to the Fiscal Year 2004 Direct Aid to Public Education Budget as Proposed by Governor Warner (the “Caboose Bill”)

Governor Warners’s proposed amendments to the fiscal year 2004 (which began on July 1, 2003, and ends on June 30, 2004) state budget (the “Caboose Bill”) were presented on Wednesday, December 17, 2003, before a joint session of the Senate Finance, the House Appropriations, and the House Finance committees. These amendments to the fiscal year 2004 budget will be considered by the 2004 Session of the General Assembly, which is scheduled to convene on January 14, 2004.

The recommendations made by the Governor regarding the Direct Aid to Public Education budget mainly include technical adjustments to the Standards of Quality (SOQ), incentive, and categorical accounts. The Governor’s recommendations include funding for the state share of all Standards of Quality (SOQ) programs, and continuation of all existing incentive and categorical programs.

Attachment A to this memorandum provides summary information on the major fiscal year 2004 amendments proposed by the Governor that affect the Direct Aid accounts.

Attachment B to this memorandum lists the estimated school division entitlements for fiscal year 2004 for the SOQ, incentive, and categorical accounts based on the Governor’s proposed amendments. These revised entitlements use the Department of Education’s latest projections of March 31, 2004, average daily membership (ADM). The entitlements shown in Attachment B do not include the direct grants (Group IV accounts) authorized by the General Assembly that are unique to certain school divisions.

Several of the categorical account entitlements shown in Attachment B (Group III accounts) are funded on a reimbursement basis and represent the department’s latest projected entitlements; however, final payments on these accounts for fiscal year 2004 will be based on actual reimbursements.

In addition to the entitlement information contained in Attachment B, a downloadable Excel file has been created to assist school divisions in calculating projected fiscal year 2004 state entitlements and local matches for most Direct Aid programs. This file gives divisions the opportunity to change ADM to test the effect on state funding and projected local matches using the department’s projected ADM or a local projection of ADM. Attachment C to this memorandum provides detailed instructions for accessing the Excel file from the Department of Education Web site. The Excel file may be downloaded from the following address:

http://www.pen.k12.va.us/VDOE/Finance/Budget/calctools.html

It is important to remember that the information provided in Attachment B and in the Excel template relates to the Governor’s proposed budget amendments for fiscal year 2004. The House of Delegates and the Senate will have the opportunity to amend the Governor’s budget proposals during the 2004 General Assembly session. The General Assembly will adopt a final fiscal year 2004 budget before the end of the session, which is scheduled for March 13, 2004; therefore, the estimated entitlements contained in Attachment B and in the Excel calculation template are projections only and are subject to change throughout the session. The department will provide additional information during the General Assembly session as changes to Direct Aid entitlements occur.

In addition, the fiscal year 2004 entitlements will not be finalized until they are recomputed using actual March 31, 2004, ADM and other final program participation information. Although we have confidence in the accuracy of our ADM projections on a statewide basis, experience has shown that the accuracy of our projections for individual localities may vary. When localities believe that they have more accurate projections of their March 31 ADM, they are encouraged to substitute their estimates for those provided in this memorandum. Also, please note that changing the ADM in the Excel calculation template only changes the estimated funding for accounts that are funded on the basis of ADM. The funding for all other accounts remains the same.

Questions regarding the proposed fiscal year 2004 budget amendments and revised fiscal year 2004 Direct Aid entitlements may be directed to Dan Timberlake, assistant superintendent for finance, or budget office staff at (804) 225-2025.

JLD/mmv

Attachments

http://www.pen.k12.va.us/VDOE/suptsmemos/2003/inf222a.pdf

http://www.pen.k12.va.us/VDOE/suptsmemos/2003/inf222b.pdf

http://www.pen.k12.va.us/VDOE/suptsmemos/2003/inf222c.pdf