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SUPTS. MEMO. NO. 1
March 5, 1999 |
| TO: | Division Superintendents |
| FROM: | Paul D. Stapleton
Superintendent of Public Instruction |
| SUBJECT: | Final 1998-2000 Budget Passed by the General Assembly |
Pursuant to Section 22.1-93, Code of Virginia, the Department of Education is providing "...estimates to be used for budgetary purposes relative to the Basic School Aid Formula..." for the 1998-2000 biennium. These estimates represent the state funding projected to be distributed to school divisions during the current fiscal year (fiscal year 1999) and next fiscal year (fiscal year 2000). On Saturday, February 27, 1999, the 1999 Session of the General Assembly adopted the final budget for the 1998-2000 biennium. Highlights of the General Assembly's actions include: approval of Governor Gilmore's recommendation for five new Best Practice Centers bringing the total to eight statewide; dedication of lottery revenues to public education; approval of a six percent salary increase effective January 4, 2000; and, provision of bond proceeds for the purchase of student information management software for eligible school divisions. HB 1450, as passed by the General Assembly, now goes to Governor Gilmore for action. Governor Gilmore will have the option of signing the bill as presented to him, amending parts of the bill, or vetoing parts of the bill. He must take this action prior to the reconvened session where the General Assembly will consider any amendments or vetoes from Governor Gilmore. Consequently, unless signed by Governor Gilmore with no changes, the budget as adopted by the General Assembly will not become final until after the reconvened session has concluded. The reconvened session is currently scheduled for April 7, 1999. The budget proposed by Governor Gilmore in HB 1450 is the base against which the General Assembly changes have been made. All actions described in this memorandum are changes to Governor Gilmore's introduced budget (HB 1450). As you review this information, please refer to Informational Supts. Memo. 192, dated December 22, 1998, which describes HB 1450 as introduced. The information presented in Informational Supts. Memo. No. 33, dated February 10, 1999, which describes the actions by both the House of Delegates and the Senate, is repeated in this memorandum. For the purposes of this memo, fiscal year 1999 means the current year that began on July 1, 1998, and ends on June 30, 1999. Fiscal year 2000 means the year that begins on July 1, 1999, and ends on June 30, 2000. Attachments are enclosed to provide detailed information on changes enacted by the General Assembly. These attachments include: Attachment A Changes to HB 1450 passed by the General Assembly for the 1998-2000 biennium. Attachment B Summary of Account Information. Attachment C School division specific printout for the budget passed by the General Assembly in HB 1450 for the 1998-2000 biennium. Attachment D School division specific printout listing the schools eligible for the revised Primary Class Size Reduction program. Attachment C is divided into three groups designated by the Roman numerals to the left of the accounts. The first group (I) lists all of the Standards of Quality accounts. The second group (II) lists all of the incentive-based accounts that require school divisions to apply for the funds and to meet certain criteria. The third group (III) lists all of the categorical accounts for each school division. The funds projected for groups I and II are based either on the most recent data available to the Department of Education or the Department of Education's projected March 31 Average Daily Membership (ADM) where funding is enrollment driven. While the Department has confidence in the projections of total ADM statewide, projections by individual locality are subject to change for factors that are better known at the local level. You are encouraged to substitute your own projections of ADM if you believe that your local projections are more accurate than the Department's. The numbers represented for the accounts in group III are estimates based on the most recent data available to the Department of Education. If you have any questions, or need additional information, please contact Daniel S. Timberlake, Assistant Superintendent for Finance, June F. Eanes, Budget Director, or Kent Dickey, Assistant Budget Director, at (804) 225-2025. PDS/dst Attachments c: Local Governing Bodies ------------------------------------------------------------ Changes Proposed to the 1998-2000 Biennial Budget by the 1999 General Assembly Revised Sales Tax Estimate Senate - Sales tax estimates are revised upward by $4.5 million in fiscal year 1999 and $500,000 in fiscal year 2000. The revised estimate for fiscal year 1999 is $668.4 million and the revised estimate for fiscal year 2000 is $700.9 million. House - The sales tax estimate for fiscal year 1999 is the same as that proposed by the Senate (an increase of $4.5 million for a total of $668.4 million). The revised estimate for fiscal year 2000 is $698,423,000, a reduction of $1,977,000. Final Action (Conference Report) - Sales tax estimates are revised upward by $4.5 million in fiscal year 1999 and $132,997 in fiscal year 2000. The revised estimate for fiscal year 1999 is $668.4 million and the revised estimate for fiscal year 2000 is $700.5 million. Note: The individualized sheet for your school division, included with this memo, reflects these changes along with the corresponding offset changes to Basic Aid and Enrollment Loss. Inflation Adjustment Senate - Reduces funds by $11.8 million in fiscal year 1999 and $12.0 million in fiscal year 2000 to adjust for actual inflation as of the fourth quarter of 1998. House - Reduces funds by $2.8 million in fiscal year 1999 and $12.0 million in fiscal year 2000 to adjust for actual inflation as of the fourth quarter of 1998. This action is similar to the Senate's action except that in fiscal year 1999, the House only adjusts inflation for the last three months of the year. Final Action (Conference Report) - Adopts Senate proposal to reduce funds by $11.8 million in fiscal year 1999 and $12.0 million in fiscal year 2000 to adjust for actual inflation as of the fourth quarter of 1998. NOTE: These inflation adjustments mean that each school division's basic aid per pupil amounts will be decreased in both years of the biennium. Likewise, any other account that uses basic aid to determine its funding will be reduced including: salary supplements, at-risk payments, enrollment loss, and textbooks. Fiscal year 1999 payments will be adjusted with final average daily membership changes on the May and June EDI payments. Eliminate "Harper" Payments Senate - No action. House - Reduces funding by $13.8 million in fiscal year 2000 due to the elimination of the Harper Settlement payments in fiscal year 2000. Language has been included directing the Virginia Retirement System to reduce the rates charged to local school divisions in fiscal year 2000 to reflect this change. Final Action (Conference Report) - Adopts House proposal to reduce funding by $13.8 million in fiscal year 2000 due to the elimination of the Harper Settlement payments in fiscal year 2000. Language has been included authorizing the Virginia Retirement System (VRS) to reduce the rates charged to local school divisions in fiscal year 2000 to reflect this change. If adopted by the VRS Board, the actual retirement rates to be paid to VRS by school divisions will be reduced by 0.48 percent. As a result of this reduction, the employer share of the retirement rate will be 9.04 percent in fiscal year 2000. The employee share of 5.00 percent is not affected by this proposed change. NOTE: Although state payments are proposed to be reduced and it is the intent of the General Assembly that the rates be reduced, the rate reduction is still subject to adoption by the VRS Board of Trustees. Teacher Salary Increase Senate - Provides an additional $19.4 million to increase teacher salaries from 2.25% to 4.00% effective January 1, 2000. House - Provides an additional $52.2 million to increase teacher salaries from 2.25% effective January 1, 2000, to 6.00% effective December 1, 1999. Final Action (Conference Report) - Provides an additional $39.8 million to increase teacher salaries from 2.25% effective January 1, 2000, to 6.00% effective January 4, 2000. School divisions are eligible to receive these funds if they provide an equivalent increase. The following table lists different effective dates and their corresponding equivalent increases: July 1, 1999 2.95% August 1, 1999 3.22% September 1, 1999 3.54% January 1, 2000 5.90% If you need an equivalent increase for a starting date other than what is listed above, please contact Kent Dickey at (804) 225-2025. Distribution of Lottery Funds Senate - Distributes the lottery funds based on the state share of $198.80 per pupil in fiscal year 1999 and $195.00 per pupil in fiscal year 2000. An additional $14.9 million in fiscal year 1999 and $14.8 million in fiscal year 2000 is included to provide a hold harmless provision for school divisions that would have received more funds under the distributions proposed by Governor Gilmore in the introduced budget. School divisions must match these funds based on their composite index. These funds may be used for any school purpose. Companion legislation (SB 1225) provides that division superintendents must certify the public education purpose for which these funds will be used. House - Removes the lottery funds as proposed by Governor Gilmore in the introduced budget from both years of the biennium ($245.8 million). These funds are combined with the School Construction Grant funds in fiscal year 2000 ($55.0 million) to create a capital improvements program totaling $300.8 million in fiscal year 2000. Every school division would receive the same funding as they would have received from these distributions in the introduced budget proposed by Governor Gilmore. An additional $125,164 is included to provide a hold harmless for any school division that would receive more funds from a distribution based on the state share of $300 per pupil. Companion legislation (HB 2513) for this proposal stipulates that local governments must maintain their spending for school operating programs in order to receive these funds. NOTE: HB 2513 originally dedicated approximately $9.4 million of lottery revenue to capital projects in higher education. This provision was amended on the House floor on February 9, 1999. This portion of lottery revenue was dedicated back to public education. The individual sheets reflect the amounts school divisions will receive based on the original proposal of $300.8 million for public education. The remaining $9.4 million has not yet been distributed. These funds will be distributed by subsequent House action that is likely to occur on February 11, 1999. Final Action (Conference Report) - Adopts the Senate version for distributing the revenues. This distribution removes the lottery revenues from the computation of Basic Aid payments and allocates funds to school divisions based on the state share of $198.80 per pupil in fiscal year 1999 and $195.00 per pupil in fiscal year 2000. An additional $14.9 million in fiscal year 1999 and $14.8 million in fiscal year 2000 is included to provide a hold harmless provision for school divisions that would have received more funds under the distributions proposed by Governor Gilmore in the introduced budget. Local governing bodies must appropriate sufficient local funds to: 1. match these funds based on the composite index, and 2. maintain the same level of local financial support provided in FY 1996. These funds must be used solely for educational purposes. No more than 50% can be used for recurring costs (operating costs, such as teacher salaries). No less than 50% can be used for non-recurring costs defined as school construction, additions, infrastructure, site acquisition, renovations, technology, and other expenditures related to modernizing classroom equipment, and debt service payments on school projects completed during the past ten years. Unexpended funds from the current fiscal year (FY 1999) shall be carried over by the locality to be appropriated to the school division in the second year of the biennium (FY 2000). School Construction Senate - Adds language expanding the use of school construction funds for infrastructure improvements to include but not be limited to, building and site utilities, school access roadways, and drainage systems. House - Removes the construction funds currently appropriated in fiscal year 2000 ($55.0 million) for the School Construction Grants program and combines them with the lottery funds contained in Governor Gilmore's introduced budget ($245.8 million) to create a capital improvements program totaling $300.8 million in fiscal year 2000. Language is added requiring local governing bodies to carryover any unspent school construction funds at the close of fiscal year 1999 to fiscal year 2000 to be used for the same purpose. NOTE: HB 2513 originally dedicated approximately $9.4 million of lottery revenue to capital projects in higher education. This provision was amended on the House floor on February 9, 1999. This portion of lottery revenue was dedicated back to public education. The individual sheets reflect the amounts school divisions will receive based on the original proposal of $300.8 million for public education. The remaining $9.4 million has not yet been distributed. These funds will be distributed by subsequent House action that is likely to occur on February 11, 1999. Final Action (Conference Report) - Adds language expanding the use of school construction funds for infrastructure improvements to include but not be limited to, building and site utilities, school access roadways, and drainage systems. Language also is added to require local governing bodies to carry over any unspent school construction funds at the close of fiscal year 1999 to fiscal year 2000 to be used for the same purpose. Standards of Learning Test Scoring Senate - Provides $1.5 million in fiscal year 1999 and $1.8 million in fiscal year 2000 to reduce the amount of time required by the testing vendor to score the tests. The time for scoring will be reduced from 21 work days to 14 calendar days. This action will permit testing to be moved closer to the end of the course thereby providing more instructional time. House - Same as Senate. Final Action (Conference Report) - Adopts the Senate and House proposal to provide $1.5 million in fiscal year 1999 and $1.8 million in fiscal year 2000 to reduce the amount of time required by the testing vendor to score the tests. The time for scoring will be reduced from 21 work days to 14 calendar days. This action will permit testing to be moved closer to the end of the course thereby providing more instructional time. Administrative and Student Information Management Software Senate - Provides language authorizing the issuance of Virginia Public School Authority bonds for the purpose of replacing outdated systems such as the "Columbia" system. These bond proceeds will be available only to school divisions who are eligible because their current systems are not sufficient to meet the data requirements of the Standards of Accreditation. House - Same as Senate. Final Action (Conference Report) - Adopts the Senate and House proposal to authorize the issuance of Virginia Public School Authority bonds for the purpose of replacing outdated systems such as the "Columbia" system. These bond proceeds will be available only to eligible school divisions. An eligible school division is defined as one that has been identified as having a student management and information system that is not sufficient to meet the data requirements of the Standards of Accreditation. The bonds would be issued in the spring of 2000, with the proceeds available to school divisions after the issuance of the bonds. Eligible school divisions will receive $10,000 per school and $25,000 per division. In total, $14 million will be available. NOTE: Guidance will be provided to school divisions related to eligibility and reimbursement requirements no later than May 1, 1999. For now, school divisions need to be aware that expenditures incurred prior to the enactment of the appropriation act (date signed into law) likely will not be eligible for reimbursement. Further, school divisions wishing to reimburse themselves from these bond proceeds for expenditures occurring after the date of enactment will be required to adopt reimbursement resolutions. New SOL Remediation Teachers Senate - Eliminates funds. House - Distributes the $8 million proposed by Governor Gilmore in fiscal year 2000 for 400 new teachers based on the 400 elementary schools (one teacher per school) with the lowest composite pass rates on the Standards of Learning tests. The House maintains the Governor's methodology of providing a flat grant of $20,000 for each teacher. Final Action (Conference Report) - Adopts the Senate proposal to eliminate the new funding proposed by Governor Gilmore for 400 new teachers. GED Programs Senate - Provides an additional $2.4 million in fiscal year 2000 to expand general education development (GED) preparatory programs and testing. Language has been included stating that GED students shall be counted in Average Daily Membership (ADM). Two positions are added to the Department of Education to support the expanded program. House - Provides an additional $1.3 million in fiscal year 2000 to expand general education development (GED) preparatory programs and testing. This provision includes language that states GED students may be counted in Average Daily Membership (ADM). The House amendment estimates that the inclusion of these students will increase statewide ADM by 492 students in fiscal year 2000. NOTE: This estimated impact accounts for the difference in ADM projections contained in the House and Senate versions of your individual sheets. One position is added to the Department of Education to support the expanded program. Final Action (Conference Report) - Adopts the Senate proposal to provide an additional $2.4 million in fiscal year 2000 as start-up funding to expand general education development (GED) preparatory programs and testing at the high school level pursuant to SB 962 and HB 2384. Language has been included stating that GED students shall be counted in Average Daily Membership (ADM). Two positions are added to the Department of Education to support the expanded program and to evaluate the on-going cost of these programs. Governor's School Programs Senate - Provides an additional $54,233 in fiscal year 1999 and $160,150 in fiscal year 2000 to fund enrollment at the Commonwealth Governor's school. An additional $266,947 is provided in fiscal year 2000 for the increased cost of the summer programs. House - Provides an additional $54,233 in fiscal year 1999 and $160,150 in fiscal year 2000 to fund enrollment at the Commonwealth Governor's school. An additional $200,000 is provided in fiscal year 2000 for the purchase of technology equipment at the Appomatox Governor's school. An additional $50,000 is provided in fiscal year 2000 to study the feasibility of establishing a Governor's School program on student leadership. Final Action (Conference Report) - Provides an additional $54,233 in fiscal year 1999 and $160,150 in fiscal year 2000 to fund enrollment at the Commonwealth Governor's school. An additional $100,000 is provided in fiscal year 1999 to increase the amount of planning funds for the Appomatox Governor's school. An additional $50,000 is provided in fiscal year 2000 to study the feasibility of establishing a Governor's School program on student leadership. Language is included to permit school divisions to carry forward any unspent planning grant funds for a Governor's School at the close of fiscal year 1999 to fiscal year 2000. Early Intervention Reading Program Senate - Language is added to require that school divisions must agree to assess students at the end of the school year after they have received intervention services as a condition for receiving state funds. House - Same as Senate. Final Action (Conference Report) - Adopts the Senate and House proposal to include language requiring school divisions to agree to assess students at the end of the school year after they have received intervention services as a condition for receiving state funds for this program. Standards of Learning (SOL) Remediation Program Senate - No action House - Adds language requiring local governing bodies to carryover any unspent SOL Remediation funds at the close of fiscal year 1999 to fiscal year 2000 to be used for the same purpose. Language also is added to permit these funds to be used for students who may require remediation to perform adequately on the Standards of Learning tests. Final Action (Conference Report) - Adopts the House proposal to add language requiring local governing bodies to carry over any unspent SOL Remediation funds at the close of fiscal year 1999 to fiscal year 2000 to be used for the same purpose. Language also is added to permit these funds to be used for students who may require remediation to perform adequately on the Standards of Learning tests. School Health Incentive Fund Senate - No action House - Adds language to restrict the use of these incentive funds to nursing services only. Final Action (Conference Report) - Adopts the House proposal to add language restricting the use of these incentive funds to nursing services only. Cost of Competing Adjustments Senate - No action. House - Adds language directing the Joint Legislative Audit and Review Commission to study the need for including the school divisions of Clarke, Fauquier, Frederick, Stafford, and Winchester in the cost of competing methodology used for Planning District Eight. The findings are to be reported to the 2000 Session of the General Assembly. Final Action (Conference Report) - No action taken. Other Budget Actions Senate - Provides additional funding in fiscal year 2000 (unless otherwise noted) for: Advancement Via Individual Determination - Petersburg ($75,000), Advancement Via Individual Determination - Staunton ($29,193), Project ECOLE ($50,000), VGAP - Fredericksburg ($95,000), New Century Consortium ($75,000), Southwest Virginia Public Education Consortium William King Outreach ($10,000 in fiscal year 1999 and $115,000 in fiscal year 2000), Lightspan Program in Alleghany Highlands ($25,000), and Jobs for Virginia Graduates ($350,000). House - Provides additional funding for: Achievable Dream - Newport News ($200,000), Achievable Dream - Hampton ($30,000), Alternative School Grants ($100,000), Advancement Via Individual Determination - Virginia Beach ($100,000), English as a Second Language Teachers ($190,000), National Certification Bonus for Teachers ($140,000), and Mentor Teacher Program ($600,000). Final Action (Conference Report) - Provides additional funding in fiscal year 2000 (unless otherwise noted) for: Advancement Via Individual Determination - Petersburg ($75,000), Advancement Via Individual Determination - Staunton ($29,193), Project ECOLE ($50,000), VGAP - Fredericksburg ($95,000), New Century Consortium ($75,000), Southwest Virginia Public Education Consortium William King Outreach ($10,000 in fiscal year 1999 and $115,000 in fiscal year 2000), Lightspan Program in Alleghany Highlands ($15,000), National Certification Bonus for Teachers ($140,000), English as a Second Language Teachers ($190,000), Expansion of Achievable Dream in Newport News ($200,000), Achievable Dream - Hampton ($30,000), Advancement Via Individual Determination - Virginia Beach ($100,000), Alternative School Pilot Grants - Newport News, Norfolk, Gloucester ($60,000), Mentor Teacher Program ($300,000), and Jobs for Virginia Graduates ($344,000). ------------------------------------------------------- Attachment B SUMMARY OF ACCOUNT INFORMATION Automatically Must Requires New Receiving Apply/ Local Rvnue Account Funding Certify Match Codes BASIC AID X X SALES TAX X SALARY SUPPLEMENT X X TEXTBOOKS X X VOCATIONAL ED - SOQ X X GIFTED ED - SOQ X X SPECIAL ED - SOQ X X REMEDIAL ED - SOQ X X RETIREMENT X X HARPER SETTLEMENT X SOCIAL SECURITY X X ENROLLMENT LOSS X REMEDIAL SUMMER SCHOOL X MAINTENANCE X X LOTTERY X X 2402020 LOTTERY HOLD HARMLESS X X 2402510 AT RISK X X PRIMARY CLASS SIZE K-3 X X AT RISK FOUR YEAR OLDS X X EARLY READING INTERVENTION X X SOL TEACHING MATERIALS X X SOL REMEDIATION X X ADDITIONAL TEACHERS X SOL TEACHER TRAINING X COMPOSITE INDEX TRANSITION X DROPOUT PREVENTION X X TRUANCY X X HEALTH INCENTIVE FUND X X SCHOOL CONSTRUCTION X X GED FUNDING X 2402030 TECHNOLOGY X X VOCATIONAL ED - CAT - OCCUPATIONAL PREP X ADULT X EQUIPMENT X X SPECIAL ED CAT- HOMEBOUND X HOSPITALS X X TUITION X ADULT EDUCATION X ENGLISH AS A 2ND LANGUAGE X READING RECOVERY X AVID X X FOSTER CARE X ALTERNATIVE ED X ELECTRONIC CLASSROOM X SCHOOL FOOD X GOVERNOR'S SCH (ACADEMIC & REGIONAL) X VA GUARANTEED ASST PROGRAM X