COMMONWEALTH OF VIRGINIA

DEPARTMENT OF EDUCATION

P.O. BOX 2120

RICHMOND, VIRGINIA 23218-2120

 

SUPTS. MEMO NO. 3

February 28, 2003

REGULATORY

TO:

Division Superintendents

 

FROM:

Jo Lynne DeMary

Superintendent of Public Instruction

 

SUBJECT:

Amendments to the 2002-2004 Budget Passed by the 2003 General Assembly

 

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 in fiscal years 2003 and 2004 based on budget actions adopted by the 2003 General Assembly. Fiscal year 2003 began on July 1, 2002, and ends on June 30, 2003. Fiscal year 2004 begins on July 1, 2003, and ends on June 30, 2004.

 

On February 22, 2003, the 2003 Session of the General Assembly adopted changes to the amended 2002-2004 biennial budget as introduced by Governor Warner (reference Informational Superintendent's Memorandum No. 171, dated December 23, 2002). Highlights of the General Assemblys adopted budget for 2002-2004 include: a 2.25 percent teacher compensation increase effective January 1, 2004, but contingent upon a determination that general fund revenue targets will be met in fiscal year 2004; additional general fund support for VRS retirement and social security payments in fiscal year 2004, which decreases the use of Literary Fund revenues; partial restoration of the interest rate subsidy program in fiscal year 2004 at $10.0 million; and changes to the Student Achievement Grants program introduced by Governor Warner. In addition, funding is provided in fiscal year 2004 for separate SOL history tests and for the continuation of the algebra readiness diagnostic test.

 

For fiscal year 2004, the General Assembly recommends funding the Student Achievement Grants program at a decreased amount (equal to the existing amount of funding for Dropout Prevention of $10.1 million) eliminating the portion of funding that was to come from the School Health Incentive program and the Technology Resource Assistants program. Funds from these two programs are used to support the compensation increase. The 2003 General Assembly also adds language to include Dropout Prevention as one of the allowable uses of funding under the Student Achievement Grants program.

 

Attachment A to this memorandum provides a summary of the final actions of the 2003 General Assembly. Attachment B to this memorandum shows the estimated entitlements for each school division for the Standards of Quality (SOQ), incentive, and categorical accounts for fiscal years 2003 and 2004, based on the final General Assembly actions. These entitlements are based on the Department of Educations latest projections of March 31 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 (Group III accounts) shown in Attachment B are funded on a reimbursement basis and represent the departments latest projected entitlements; however, final payments on these accounts in fiscal years 2003 and 2004 will be based on actual reimbursements.

 

Please note that the estimated fiscal year 2003 and fiscal year 2004 entitlements related to the career and technical education (formerly vocational education) categorical account have changed from the estimates contained in the Governors introduced budget (reference Informational Superintendent's Memorandum No. 171, dated December 23, 2002). The formula used to calculate the estimated entitlements shown in Attachment B of this memorandum and in the Excel calculation file (referenced below) has been updated and the distribution for regional programs reflect how the funds are actually paid (to each participating division rather than to fiscal agents). Payments related to the career and technical education categorical account (Group III) are made on a reimbursement basis using prior year expenditure data. Consequently, final payments will be distributed to eligible school divisions based on available funding divided by prior year actual expenditures to determine a reimbursement percentage. (reference Administrative Superintendents Memorandum No. 5, dated January 31, 2003).

 

In addition to the entitlement information contained in Attachment B, a downloadable Excel file has been created to assist school divisions in calculating projected state entitlements and local matches in fiscal years 2003 and 2004 for the SOQ, incentive, and categorical programs. This file gives divisions the opportunity to test the effect of using the departments projected ADM or a local projection of ADM on state funding and local match requirements. Attachment C to this memorandum provides detailed instructions for accessing the Excel file from the Department of Education website. The Excel file may be downloaded from the following address:

 

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

 

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 divisions may vary. When divisions 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 when using the Excel calculation file. Also, please note that changing the ADM in this file only changes the estimated funding for accounts that are funded on the basis of ADM. The estimated funding for all other accounts remains the same. (Attachment B contains projected entitlement information for each school division in PDF format. This attachment shows projected entitlements based on the departments ADM and cannot be modified.)

 

The amended 2002-2004 budget passed by the General Assembly now goes to Governor Warner for action. The Governor will have several options that include signing the budget bill as presented to him with no changes, returning the budget bill to the General Assembly with vetoes, returning the budget bill to the General Assembly with amendments, or returning the budget bill to the General Assembly with some combination of vetoes and amendments. He must take this action prior to the reconvened veto session scheduled for April 2, 2003, when the General Assembly will consider any amendments or vetoes from Governor Warner. Consequently, unless signed by Governor Warner with no changes, the budget bill as adopted by the General Assembly will not become final until after the reconvened session has concluded and the budget bill is signed by the Governor.

 

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.

 

JLD/mv

 

Attachments

 

/administrators/superintendents_memos/2003/reg003a.pdf

/administrators/superintendents_memos/2003/reg003b.pdf

/administrators/superintendents_memos/2003/reg003c.pdf