INFORMATIONAL

Governor Gilmore's proposed amendments to the 1998-00 budget were presented
last Friday, December 18, 1998, to a joint meeting of the Senate Finance
Committee, the House Appropriations Committee, and the House Finance
Committee.  This budget will be considered by the 1999 Session of the
General Assembly which is scheduled to convene on January 13, 1999.  The
recommendations made by the Governor include several new initiatives, as
well as technical revisions to the Standards of Quality and other related
accounts.

Highlights of Governor Gilmore's budget include:

* An additional $123 million in fiscal year 1999 and $122 million in fiscal
year 2000 resulting from the dedication of 100 percent of the annual lottery
revenues to the Basic Aid funding formula.

* Additional funding to establish eight Best Practices Centers.  This means
that the department will be able to locate one center in each of the eight
superintendent's regions.

* Restoration of the Early Reading Intervention program in fiscal year 2000
to permit all school divisions to participate in this program.  This program
had previously been reduced to serve only those school divisions with average
daily memberships of 2,500 or less.

* An additional $8 million in fiscal year 2000 to hire 400 new teachers in
fiscal year 2000.  The Board of Education will administer this grant program
to distribute funding for the new teachers based on criteria that include
school performance on the Standards of Learning tests.

Attachment A provides additional information relating to the funding proposed
in the Governor's Budget.  Attachment B is a printout that reflects the
estimated entitlements from the major SOQ and related accounts that your
locality will receive in fiscal years 1999 and 2000.  Please note that
this printout includes only the Standards of Quality and Incentive-Based
accounts.  For now, you should continue to use the amounts listed on
Regulatory Superintendent's Memo No. 1, dated March 19, 1998, to obtain
funding levels for Categorical accounts (Section 3).  Categorical accounts
will be included on the Regulatory Memo that will be sent to you after the
adjournment of the General Assembly session.  The last attachment is an
explanation of how your school division is affected by the proposed use of
lottery funds for Basic Aid.

It is important to remember that this information relates to the Governor's
budget proposed to the 1999 General Assembly.  It is subject to change as the
House of Delegates and the Senate prepare their versions of the budget.  A
final budget will be adopted by the General Assembly near the end of February
1999.  We will provide additional information regarding any changes to the
Governor's budget as the information becomes available.

If you have questions, please call Daniel S. Timberlake, Assistant
Superintendent for Finance, June F. Eanes, Budget Director, or Kent Dickey,
Assistant Budget Director, at (804) 225-2025.

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Attachments