SUPTS. MEMO. NO. 1
March 12, 1996
|FROM:||William C. Bosher, Jr.
Superintendent of Public Instruction
|SUBJECT:||Aid to Localities Appropriations, 1996-98 Biennium|
As required by Section 22.1-93 of the Code of Virginia, we are hereby submitting "estimates to be used for budgetary purposes relative to the Basic School Aid Formula" for school years 1996-97 and 1997-98. Aid to locality estimates are based on the 1996-98 budget adopted on March 11, 1996 by the General Assembly, which is subject to final approval by the Governor. As I have mentioned to you in earlier memoranda and conversations, it is important to remember that the budget as proposed by the Governor included more than $635 million over the biennium in support of public education. This included sufficient funding to cover the state share of the SOQ, provide for a teacher salary increase in the second year, fund all statutory/categorical programs according to current policy, and fund the majority of the policy initiatives proposed by the Board of Education. In his report to the House Appropriations Committee, Delegate Councill, Chairman of the Subcommittee on Elementary and Secondary Education remarked, "The Subcommittee . . . was in the enviable position of starting with a public education budget which included the lion's share of the total proposed new spending in 1996-98." In a like manner, Senator Walker, Chairman of the Subcommittee on Education and Co-Chairman of the Senate Finance Committee in his report stated, "we are all aware that the Public Education budget came over to us with, in the neighborhood of, $600 million in new funding for the biennium. That is certainly a comfortable neighborhood from which to start a journey." Given that level of substantial funding, the General Assembly was able to focus on expansion and continuation of successful programs which were implemented as part of previous educational opportunities initiatives. These programs include reduced K-3 class sizes, educational technology, maintenance supplement payments, and truancy/safe schools. In order to more fully describe these initiatives, as well as the many other changes adopted by the legislature, attached to this memorandum are the following: A. Information regarding selected aid to locality accounts which were affected by final actions of the General Assembly (Attachment A). B. Language excerpts from the 1996-98 Appropriations Act which (1) allows telephone companies to offer different rate schedules for telephone lines used in public schools for technology purposes, and provides for the negotiation of rates by the Superintendent of Public Instruction and the Director of the Council of Information Management; (2) authorizes the Superintendent of Public Instruction and the State Treasurer to study the feasibility of establishing an Elementary and Secondary Education Equipment Trust Fund; (3) relates to state participation in federal programs; (4) establishes the new assessment program relating to the Standards of Learning; and (5) implements the Educational Technology Grant program in 1996-98 (Attachment B). C. An individualized printout which projects payments to each locality from state funds (Attachment C). D. An individualized sheet which reflects those schools in each locality that are eligible for participation in the reduced K-3 class size initiative (Attachment D). E. A printout which reflects those schools that are eligible for participation in the Truancy/Safe Schools initiative (Attachment E). The dollar estimates provided on the attachments, where applicable, are based on the Department of Education's projection of March 31 average daily membership (ADM) for each locality. While we have confidence in our projection of total ADM for the State, experience has shown that the projections for individual localities are subject to change. When localities believe that they have more accurate projections of their March 31 ADM (adjusted or unadjusted), they are encouraged to substitute their estimates for those provided in this document. The following general remarks concerning these projections also should be noted: 1) In addition to ADM estimates, these projections are based on current estimates of program participation rates, fiscal year sales tax, and other input variables to the respective formulae. These projections are thus subject to adjustment as these variables change. 2) These estimates include only State funds (General Fund, Literary Fund contributions to Teacher Retirement and Social Security, and Driver Education contribution to Basic Aid). Federal funds have been excluded from the LEA by LEA analyses, as data are not available to develop such estimates at this time. 3) The estimates provided for the Vocational Education categorical accounts include each locality's share of any allocations for a regional vocational technical center. Each locality's share has been determined based upon the percentages of participation provided to the Department. Again, please recognize that these projections are estimates. There is no guarantee that the allocations will be received exactly as projected. Questions may be directed to Mrs. Kathryn S. Kitchen, Division Chief of Finance at (804) 225-2025 or to Mrs. June F. Eanes, Budget Director at (804) 225-2060. WCB,Jr./kk Attachments cc: Chairperson of Governing Body or Mayor AUTHORITY: Section 22.1-93, Code of Virginia and the 1996-98 Appropriations Act, as approved by the General Assembly on March 11, 1996.
Attachment A Page 1 Information Regarding Selected Aid to Locality Accounts SOQ ACCOUNTS A. Basic Aid and other SOQ per pupil amounts (with the exception of Maintenance Supplement addressed below) are based upon fourth quarter inflation factors and the revised cost of competing adjustment for the divisions in Planning District 8 as adopted by the House and Senate on February 22, 1996. These per pupil amounts are reflected on Attachment C to this memorandum. B. Fringe benefit rates have not been changed from the Governor's Budget as introduced. For 1996-97 the rates are (1) 6.41% for the employer share of teacher retirement (divisions electing to pay the employee share should add 5% to this rate), (2) 7.65% for social security, and (3) a premium holiday for group life insurance (no contributions will be required during the 1996-97 fiscal year). For 1997-98 the rates are (1) 7.29% for the employer share of teacher retirement, (2) 7.65% for social security, and (3) .07% for the employer share of group life insurance. Non-professional retirement rates are provided separately to each locality by the Virginia Retirement System. C. Funding included in the Governor's Budget for a 3% teacher salary increase effective 12/1/97 has been eliminated. The budget as adopted by the General Assembly includes funding for a 1.75% increase effective 1/1/97 and an additional 2.00% increase effective 1/1/98. This funding is reflected on Attachment C under "Salary Supplement." In order to be eligible to receive these funds, localities must certify that equivalent increases in teacher salaries have been granted in the fiscal year. D. An additional $390,259 in 1996-97 and $379,464 in 1997-98 was included for Enrollment Loss in each year to recognize a percentage of the enrollment decline as follows: Composite Index Percentage .0000 - .1999 85% .2000 - .3499 70% .3500 - .4999 45% .5000 or more 30% E. Funding is included to provide for the state share of $11.50 per pupil in 1996-97 and $10 per pupil in 1997-98 for the Maintenance Supplement Account. F. Funding is included to provide for a "no loss" provision for localities. This funding will ensure that no locality receives less "state allocations" in 1996-97 than it received in 1995-96. For purposes of this payment "state allocations" shall include payments from Basic Aid, Salary Supplement, Textbooks, Vocational Education SOQ, Special Education SOQ, Gifted, Remedial, Remedial Summer School, Public School Employee Benefits (Retirement, Social Security, Group Life Insurance, Harper Account), Sales Tax, Enrollment Loss, At-Risk, Maintenance Supplement, Primary Class Size, Educational Technology, and English as a Second Language.
Attachment A Page 2 G. A "Composite Index Transition Payment" has been established in 1996-97 to provide a "one-time buffer payment" to school divisions experiencing a negative state funding impact due to the recalculation of the components of the composite index of local ability-to-pay for the 1996-98 biennium. The additional payment shall be made to local school divisions requesting such payment in an amount equal to ten percent of the difference between the funding the division would have received in the Governor's Budget as introduced in state allocations in the first year under their 1996-98 composite index and the amount they would have received in the Governor's Budget as introduced in the first year using the 1994-96 composite index. For purposes of this payment "state allocations" shall include payments from Basic Aid, Salary Supplement, Textbooks, Vocational Education SOQ, Special Education SOQ, Gifted, Remedial, Remedial Summer School, Public School Employee Benefits (Retirement, Social Security, Group Life Insurance, Harper Account), Sales Tax, Enrollment Loss, At-Risk, Maintenance Supplement, Primary Class Size, Educational Technology, and English as a Second Language. SOQ RELATED ACCOUNTS A. As described in Supts. Memo. No. 38 (Informational), dated February 19, 1996, the final budget includes additional funds for the K-3 class size reduction initiative. Criteria for eligibility have been expanded as follows: Qualifying School % Individual Eligible for Free Lunch K-3 School Ratio Class Size 20% but less than 50% 20 to 1 25 50% but less than 70% 18 to 1 22 70% or more 15 to 1 20 Language is included to allow divisions to participate at a higher ratio with a commensurate reduction in state and required local funds if local conditions do not allow participation at the eligible rate. This would allow a school which qualifies for 15 to 1 to participate at the 18 to 1 ratio at local option. B. The $15 million proposed by the Governor in 1997-98, which represented a return of lottery proceeds to localities, has been eliminated. C. As described in Supts. Memo. No. 38, additional funding has been included in the 1996-98 budget in support of educational technology. Full language is provided in Attachment B to this memorandum. While maintaining the $55 million proposed by the Governor in 1996-97 and the $20 million in 1997-98, an additional $46.2 million has been included in 1997-98 to be used to continue progress in this area. Funding will be provided in both years through the Virginia Public School Authority. In 1996-97, divisions will be eligible to receive a grant of $53,000 per division plus $26,300 for each school reporting membership as of September 30, 1996 (including regional Governor's Schools, division and regional Vocational Centers, and regional Special Education programs). Funding will be available in the spring of 1997. In 1997-98, divisions will be eligible to receive a grant of $25,000 for each school reporting membership as of September 30, 1997 (including regional Governor's Schools, division and regional Vocational centers, and regional Special Education programs). In both years, localities will be required to provide a match for these funds equal to twenty percent of the grant amount, with at least twenty-five percent of the local match being used for teacher training.
Attachment A Page 3 D. An additional $2,077,023 each year has been provided for an incentive payment to eligible school divisions for reducing truancy and supporting safe schools in elementary and middle schools. School divisions eligible for funding are those with schools in the lowest 13.4% for elementary and middle school attendance. Funds will be distributed according to the following formula: Number of Schools Participating Amount One School $20,000 Two to three schools 35,000 Four to five schools 50,000 Six or more schools 17,500 per school Localities will be required to provide a match for these funds based on the composite index and will be required to submit truancy intervention plans which outline implementation and evaluation of these programs. OTHER ACCOUNTS A. An additional $1,555,707 has been included in 1996-97 to fund the state share of $1,500 per school to be used for teacher training and curriculum development associated with the implementation of the Standards of Learning. B. Funding in support of a new assessment program related to the Standards of Learning was revised. Sufficient funding has been provided to develop and administer new tests against the SOLs at not more than four grades levels. Funding included in the Governor's Budget in support of the Literacy Passport Test was not changed. A copy of the language amendment relating to the assessment program is provided at Attachment B. C. Funding proposed in the Governor's Budget of $600,000 each year to provide liability insurance for all teachers has been removed. D. Funding in the amount of $225,000 in 1997-98 in support of a pilot Specialized Treatment and Rehabilitation program to develop alternative approaches for dealing with juvenile offenders has been removed. E. $45,713 has been included in each year to fund the state share of an AVID program in Fairfax County. F. Funding for Project Discovery has been increased by $60,000 each year to serve an additional 150 students, with 75 to be in the Arlington program and 50 to be in the Richmond program. G. Additional funding of $97,024 each year has been included to provide for the local share of summer residential Governor's Schools and Foreign Language Academies, based upon the composite index of the participating division or 50% whichever is less. Further, language has been included to prohibit the local school division from charging students to attend the program. Additional funding in 1996-97 is included to provide planning grants for academic Governor's Schools as follows: $200,000 for a Northeastern program, $50,000 for an Essex program, and $75,000 for a regional "virtual" program in Southwest Virginia.
Attachment A Page 4 H. Funding of $135,000 each year has been provided to support the Southside Virginia Regional Technology Consortium for expanding the research and development phase of a technology linkage among fourteen public school divisions. I. An additional $75,000 has been included each year in support of a School to Work Transition Grants Program. Grants will be awarded on a competitive basis for model programs supporting the transition from school to the workplace and may be used for those programs already authorized by Section 22.1-209.01 of the Code of Virginia. J. An additional $100,000 each year has been included to match the Virginia Literacy Foundation grants to volunteer literacy groups that provide services for adults with 0-4th grade reading levels. An additional $200,000 in 1996-97 is provided for grants under the VIP/VIEW program. K. An additional $75,000 in each year has been included for incentive grants for Virginia teachers seeking certification from the National Board for Professional Teaching Standards. L. An additional $300,000 each year has been included to reinstate the Teacher Scholarship Loan Program. M. An additional $5,000 in 1996-97 and $10,000 in 1997-98 has been included to support a student exchange program among Virginia's school divisions. N. An additional $25,000 in 1996-97 has been included for regional parental/community involvement summits. The summits shall be led by the Virginia Congress of Parents and Teachers with the cooperation of other statewide organizations. O. An additional $20,000 each year has been included for An Achievable Dream, Inc., to operate an extended school-day and summer educational enhancement program in Newport News. P. An additional $150,000 in each year has been included for a Mentor Teacher Program. Interested localities will be required to apply for funding and provide a 50% local match. Q. An additional $200,000 in 1996-97 has been included to support the Virginia Commission on the Future of Public Education. R. The Literary Fund transfer to Teacher Retirement was increased in 1996-97 from $34,989,382 to $41,091,382 (an increase of $6,102,000) due to upward revisions in the projected revenues to the Literary Fund from the passage of HB 548. Sufficient funds are projected to remain in the Literary Fund to provide for a $10 million Literary Fund/VPSA subsidy program in the fall of 1997 and 1998, as well as provide for approximately $50 million in direct loans each year. This should allow approximately $80 million of projects to be funded in each year of the biennium and maintain the First Priority Waiting List at approximately 12 months. S. An amendment to the language governing programs for the At-Risk Four-Year-Old program to provide a waiver to the requirement that the funding not be used to supplant federal funding. Under current Congressional discussions about funding for the Improving America's Schools Act, there is potential for localities to lose funding for Title I. Any such reduction could affect programs for at-risk four-year-old children which are currently funded from Title I. This language amendment would allow a locality to use state and local funds from the At-Risk Four-Year-Old program to continue to provide services to a number of students equivalent to the percentage reduction in Title I funds. Affected localities must seek the allowed waiver in writing from the Superintendent of Public Instruction.
Attachment B Page 1 LANGUAGE AMENDMENTS 1. TELEPHONE LINES "e.1) For the purposes of Section 56-232, Code of Virginia, Contracts of Telephone Companies with State Government' and for the purposes of Section 56-234, Contracts for Service Rendered by a Telephone Company for the State Government' shall be deemed to include communications lines into public schools which are used for educational technology. The rate structure for such lines shall be negotiated by the Superintendent of Public Instruction and the Director of the Council of Information Management. Further, the Superintendent and Director are authorized to encourage the development of "by-pass" infrastructure in localities where it fails to obtain competitive prices or prices consistent with the best rates obtained in other parts of the state. 2) The State Corporation Commission, in its consideration of the discount for services provided to elementary schools, secondary schools, and libraries and the universal service funding mechanisms as provided under Section 254 of the Telecommunications Act of 1996, is hereby encouraged to make the discounts for intrastate services provided to elementary schools, secondary schools, and libraries for educational purposes as large as is prudently possible and to fund such discounts through the universal fund as provided in Section 254. The Commission shall proceed as expeditiously as possible in implementing these discounts and the funding mechanism for intrastate services, consistent with the rules of the Federal Communications Commission aimed at the preservation and advancement of universal service." 2. ELEMENTARY AND SECONDARY EDUCATION EQUIPMENT TRUST FUND "The Superintendent of Public Instruction and the State Treasurer shall study the feasibility of establishing an Elementary and Secondary Education Equipment Trust Fund with purposes similar to the Higher Education Equipment Trust Fund, and make recommendations to the Chairmen of the Senate Finance and House Appropriations Committees no later than November 1, 1996. The recommendations shall include, but not be limited to, the following: strategies for provision of a continuing and stable funding level for the purchase and purchase and/or replacement of educational technology equipment and infrastructure in Virginia's public schools, including the feasibility and cost of direct appropriations for replacement costs through the Standards of Quality funding formula; potential sources of security for a financing program; the appropriate structure for administration of a program; appropriate levels of funding anticipated through the year 2000; the impact of a financing program on the Commonwealth's debt capacity and strategies for minimizing such an impact; and the potential state and local costs of such a program." 3. STATE PARTICIPATION IN FEDERAL PROGRAMS "Upon the passage by eighty-five or more local school boards of resolutions requesting such, the Superintendent of Public Instruction shall, on behalf of local school divisions, apply by June 30, 1996 for federal funds as specified by the local resolution which are, or may become, available pursuant to federal legislation to support local school division efforts in the areas of teacher training, curriculum development and the purchase of instructional materials related to implementing the Standards of Learning. No funds received under this provision shall be retained by the state Department of Education but all such funds shall be distributed to requesting local school divisions pursuant to the requirements of the federal program. For purposes of this item, the Superintendent of Public Instruction is hereby designated as the "State Educational Agency" under the provisions of any such federal legislation and any successor act or amendment thereto. The provisions of this paragraph shall be effective upon passage of this act." Attachment B Page 2 4. NEW ASSESSMENT PROGRAM FOR THE STANDARDS OF LEARNING "Out of the amounts for State Education Services, $6,003,000 the first year and $6,003,000 the second year from the general fund are provided for the development and administration of new assessment materials and tests related to the Standards of Learning. Data generated from these new assessment materials or tests during 1996-97 shall be used only to determine the validity and reliability of the assessment materials and tests. The data generated from these new assessment materials or tests shall not be used to impose any school division, school, teacher or student level consequences. Nothing in the Virginia Freedom of Information Act or any other provision of state law shall afford public access to the data generated during 1996-97 from these new assessment materials or tests. Release of data from "norm-referenced" tests or the Literacy Passport tests administered during the same period shall not be affected by this provision." 5. EDUCATIONAL TECHNOLOGY PROGRAM "c.1) The Board of Education shall provide the sum of $12,676,000 in the second year from the Literary Fund to provide first-year debt service payments for an education technology grant program to be conducted through the Virginia Public School Authority, in an amount estimated at $55 million, for the purpose of providing technology improvements to school infrastructure, networking, and for purchasing technology equipment. 2) Grant funds are based on an average grant of $26,300 per school and an additional $53,000 for each school division. For purposes of this grant program, eligible schools shall include those reporting membership as of September 30, 1996, as well as division and regional vocational centers, regional special education centers, and regular school year regional Governor's Schools. 3) For purposes of this grant program, the funds may be used to provide for the retrofitting and upgrade of existing school buildings, to provide network-ready multimedia microcomputers for classrooms, and to provide network-ready microcomputers for student use. Funds may also be used to provide other educational technologies as set forth in the local school division's approved technology plan. 4) Localities are required to provide a match for these funds equal to twenty percent of the grant amount. At least twenty-five percent of the local match shall be used for teacher training in the use of technology. The Superintendent of Public Instruction is authorized to reduce the required local match for school divisions with a composite index of local ability-to-pay below .2000. 5) In developing the proposed 1998-2000 and 2000-2002 biennial budgets for public education, the Board of Education shall include a recommendation to the Governor to appropriate Literary Fund revenues sufficient to make the debt service payments for this program in fiscal years 1999, 2000, 2001, and 2002. d. The Director of the Department of Planning and Budget is authorized to increase appropriations from the Literary Fund in the second year in an amount equal to the revenues received from deposits of unclaimed property remitted by TRIGON as a result of the supplemental co-payment refund program. These revenues shall be distributed by the Board of Education to local school divisions for the purchase of graphing calculators and scientific probe and sensing device kits. To the extent that these objectives have been met, any additional revenues from these deposits may be distributed for the purchase of other educational technologies. Attachment B Page 3 e.1) An educational technology grant program shall be conducted through the Virginia Public School Authority, through the issuance of equipment notes in an amount estimated at $46.2 million in the Spring of 1