COMMONWEALTH OF VIRGINIA

DEPARTMENT OF EDUCATION

P.O. BOX 2120

RICHMOND, VIRGINIA 23218-2120

SUPTS. MEMO NO. 255

December 17, 2004

INFORMATIONAL

TO:

Division Superintendents

 

FROM:

Jo Lynne DeMary

Superintendent of Public Instruction

 

SUBJECT:

Amendments to the 2004-2006 Biennial Budget as Proposed by Governor Warner

 

Governor Warners proposed amendments to the 2004-2006 biennial budget (Chapter 4, 2004 Acts of Assembly, Special Session I) were presented on Friday, December 17, 2004, before a joint session of the Senate Finance, the House Appropriations, and the House Finance committees. These amendments to the 2004-2006 budget will be considered by the 2005 Session of the General Assembly, which is scheduled to convene on January 12, 2005. The Governors amendments adjust funding for both fiscal years of the biennium, fiscal year 2005 (current year) and fiscal year 2006. The recommendations made by the Governor regarding the Direct Aid to Public Education budget mainly include technical adjustments to the Standards of Quality (SOQ), incentive, and categorical accounts. The Governors recommendations include funding for the state share of all SOQ programs, and continuation of all existing incentive and categorical programs. The major actions taken in Governor Warners amended 2004-2006 budget include:

 

        Adjustments for enrollment changes, program participation, and other technical updates;

 

        Distribution of additional sales tax revenues;

 

        Distribution of additional lottery revenues;

 

        Additional funding for various technical corrections to Direct Aid accounts;

 

        A language change allowing funding for Governors Schools to be adjusted based on actual September 30th enrollment;

 

        Expansion of the interest rate subsidy program in fiscal year 2006;

 

        Funding for a three percent compensation supplement (effective December 1, 2005) in fiscal year 2006 for all positions funded in the Standards of Quality and other state-funded positions;

 

        Funding to provide a state supplement to the school breakfast program in fiscal year 2006.

 

Attachment A to this memorandum provides summary information on the funding changes proposed by the Governor that affect the Direct Aid to Public Education and Department of Education Central Office budgets. Attachment B to this memorandum lists the estimated school division entitlements for the SOQ, incentive, and categorical accounts for fiscal year 2005 (which began on July 1, 2004, and ends June 30, 2005) and for fiscal year 2006 (which begins July 1, 2005, and ends June 30, 2006) based on the Governors proposed amendments to the 2004-2006 budget.

 

These revised entitlements use the Department of Educations latest projections of March 31 average daily membership (ADM) for fiscal years 2005 and 2006. 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 shown in Attachment B (Group III accounts) are funded on a reimbursement basis and represent the departments latest projected entitlements; however, final payments on these accounts in fiscal years 2005 and 2006 will be based on actual reimbursements.

 

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 2005 and 2006 for most Direct Aid programs. This file gives divisions the opportunity to change ADM to test the effect on state funding and projected local match requirements using the departments projected ADM or a local projection of ADM. 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 is unaffected by changing ADM in the file and, therefore, 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 projected ADM and cannot be modified.)

 

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 Web address:

 

http://www.doe.virginia.gov/VDOE/Finance/Budget/calctools.html

 

Attachment D contains a copy of the amended appropriation act language for Direct Aid to Public Education included in the Governors introduced budget on December 17, 2004. All changes proposed by the Governor are shown in either underlined text (indicating new language) or text with a strike-through notation (indicating deleted language). This attachment provides explanatory information for many of the Direct Aid accounts.

 

It is important to remember that the information provided in Attachment B and in the Excel calculation template relate to the Governors proposed amendments to the 2004-2006 budget as introduced. The House of Delegates and the Senate will have the opportunity to amend the Governors budget proposals during the 2005 General Assembly session. The General Assembly will adopt a final amended 2004-2006 biennial budget before the end of the session, which is scheduled for February 26, 2005; therefore, the estimated entitlements contained in Attachment B and in the Excel calculation template are projections only and are subject to change as a result of legislative action by the General Assembly. The department will provide additional information during the General Assembly session as changes to the estimated Direct Aid entitlements occur. After the conclusion of the session, projected entitlements based on final General Assembly actions will be sent to you in another Superintendents Memorandum. Please note, the fiscal year 2005 entitlements will not be finalized until they are recomputed using actual March 31, 2005, ADM and other final program participation information. Actual fiscal year 2006 entitlements will not be finalized until after a similar process is followed next year.

 

Questions regarding the Governors proposed amendments to the 2004-2006 budget and revised estimate of Direct Aid entitlements for fiscal years 2005 and 2006 may be directed to Dan Timberlake, assistant superintendent for finance, or budget office staff at (804) 225-2025.

 

JLD/kcd

 

Attachments

 

http://www.doe.virginia.gov/administrators/superintendents_memos/2004/inf255a.pdf

http://www.doe.virginia.gov/administrators/superintendents_memos/2004/inf255b.pdf

http://www.doe.virginia.gov/administrators/superintendents_memos/2004/inf255c.pdf

http://www.doe.virginia.gov/administrators/superintendents_memos/2004/inf255d.pdf