|FROM:||Jo Lynne DeMary
Superintendent of Public Instruction
|SUBJECT:||State Revenue Estimates for Fiscal Years 2001 and 2002 and Issues Related to the 2000-2002 Biennial Budget|
Section 22.1-93, Code of Virginia, requires the Department of Education to provide "...estimates to be used for budgetary purposes relative to the Basic School Aid Formula…." The revenue estimates provided in this memorandum represent the state funding that is projected to be distributed to school divisions during the 2000-2002 biennium based on the latest information available to the department. For purposes of this memorandum, fiscal year 2001 began on July 1, 2000, and ends on June 30, 2001. Fiscal year 2002 begins on July 1, 2001, and ends on June 30, 2002.
On February 24, 2001, the General Assembly adjourned the 2001 regular session without adopting amendments to the biennial budget enacted at the 2000 Session (Chapter 1073, 2000 Acts of Assembly). As a result, Chapter 1073 continues as the state budget that is in effect for the 2000-2002 biennium. In the absence of legislative action to enact an amended budget or administrative action by the Governor to make changes to Chapter 1073, payments to school divisions will be the appropriations contained in Chapter 1073.
Chapter 1073 provides authority to the Governor to take certain types of administrative actions in order to keep the Commonwealth’s expenditures from exceeding its revenues. Through Executive Order 74 (01), however, the Governor has directed that no appropriations for Direct Aid to Public Education be withheld in order to balance the state budget.
If a special session of the General Assembly is convened to amend Chapter 1073, it is not certain what effect the outcome of the special session would have on the state budget and the state funding received by school divisions. At this time, there has been no definitive announcement that a special session will be convened.
The two attachments to this memorandum
provide information on factors affecting state funding for school divisions,
assuming that Chapter 1073 will continue as the budget in effect for the
2000-2002 biennium. They also contain estimated school division entitlements
for fiscal years 2001 and 2002.
|Attachment A:||Summary of Funding Issues that Impact Local School Divisions|
|Attachment B:||Pursuant to Section 22.1-93, Code of Virginia, projected school division entitlements for fiscal years 2001 and 2002 based on Chapter 1073, but updated for the latest ADM projections, program enrollments, program participation rates, and certified VRS rates. These entitlements are shown on a formula-driven basis without any proration.|
The entitlements shown in Attachment B are 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.
The state funds projected for groups I and II are based either on the most recent data available to the Department of Education or the department'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 due to 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. A downloadable Excel file was created to assist divisions in calculating projected state entitlements and local matches for these 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. The file can be downloaded from the following address:
Please remember that final payments will be based on actual enrollment and participation data. Based on projected enrollment, estimated participation data, and other information available at this time, it appears that the department will have sufficient funding to pay all accounts in full. Please be aware, however, that certain accounts may have to be prorated if actual enrollment increases the state’s cost beyond the appropriations contained in the current budget.
The entitlements shown for the group III accounts are estimates based on the most recent data available to the department. As with the accounts in groups I and II, payments could be prorated if actual costs exceed the available appropriations. At this point in time, the department does not anticipate that proration of the accounts in group III will be necessary.
New information will be provided to you as it becomes available. If you have any questions, or need additional information, please contact Daniel S. Timberlake, assistant superintendent for finance, or budget office staff at (804) 225-2025.
c: Local Governing Bodies