COMMONWEALTH OF VIRGINIA

DEPARTMENT OF EDUCATION

P.O. BOX 2120

RICHMOND, VIRGINIA 23218-2120

 

SUPTS. MEMO NO. 38

February 11, 2005

 

INFORMATIONAL


TO:

Division Superintendents

 

FROM:

Jo Lynne DeMary

Superintendent of Public Instruction

 

SUBJECT:

Changes to Governor Warners Amended 2004-2006 Biennial Budget Proposed by the Senate and the House of Delegates

The committees proposed changes were adopted this week by the full membership of the House of Delegates and the Senate. The adopted changes affect fiscal years 2005 and 2006. Fiscal year 2005 began on July 1, 2004, and ends on June 30, 2005. Fiscal year 2006 begins on July 1, 2005, and ends on June 30, 2006.

Governor Warners amended 2004-2006 biennial budget (HB 1500/SB 700 as introduced) is the budget against which the House of Delegates and the Senate made changes. The attachments to this memorandum provide information on the changes adopted by the House and by the Senate. Unless changes are specifically noted in the attachments, Governor Warners proposals contained in the introduced version of HB 1500/SB 700 were adopted. Please note that Governor Warners proposed executive amendments to his budget that were not included in the introduced budget (HB 1500/SB 700) on December 17, 2004, must be adopted specifically by the House of Delegates and by the Senate to be included in their respective budgets and in the final budget.

The attachments to this memorandum include:

Attachment A A summary of changes proposed by the Senate and the House of Delegates to Governor Warners amended 2004-2006 biennial budget (HB 1500/SB 700).

The revised Direct Aid entitlements proposed by the Senate in Attachment B and the House of Delegates in Attachment C use the Department of Educations latest (from fall 2004) projections of March 31 average daily membership (ADM) for each school division for fiscal years 2005 and 2006. (Note: Attachments B and C show projected entitlements in .pdf format for each school division based on the departments projected ADM and cannot be changed. If you wish to see the effects of a different ADM on funding for your school division, please use the Excel calculation files described in the next paragraph.) The entitlements shown in Attachments B and C 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 Attachments B and C (Group III accounts) are funded on a reimbursement basis and represent the departments latest projections of those reimbursements; however, final payments on these accounts in fiscal years 2005 and 2006 will be based on actual qualifying expenses submitted to the department.

In addition to the entitlement information contained in Attachments B and C, two downloadable Excel files have been created to assist school divisions in calculating projected state entitlements and required local matches in fiscal years 2005 and 2006 for most Direct Aid programs based on the budgets proposed by the Senate and House of Delegates. These files give divisions the opportunity to change ADM to test the effect on state funding and projected local match requirements using the departments projected ADM (the basis of the entitlements shown in Attachments B and C) 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 files.

Also, please note that changing the ADM in these files only changes the estimated funding for accounts that are funded on the basis of ADM, excluding the school construction grants program payments that are funded based on ADM from the prior year. The estimated funding for all other accounts is unaffected by changing ADM in the files and, therefore, remains the same.

Attachment D to this memorandum provides detailed instructions for accessing the two Excel files from the Department of Education website. The Excel files may be downloaded from the following Web address:

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

The projected division entitlements for fiscal years 2005 and 2006 contained in Attachments B and C and in the Excel calculation files include full funding for various technical corrections that were identified after the Governor submitted his introduced budget. The Senate budget proposal includes funding for these technical corrections in fiscal years 2005 and 2006. The House budget proposal does not fully fund the technical corrections in either year. The per pupil amounts and total funding amounts contained in Attachments B and C and in the Excel calculation files have not been reduced in the House version and, therefore, reflect the full cost of the corrections for all school divisions for both years. The corrections not funded in the House budget proposal total approximately $11.6 million in fiscal year 2005 and $658,578 in fiscal year 2006. In the event the House budget proposal is adopted, and sufficient savings in actual costs are not achieved prior to the close of the fiscal year, or if additional funds are not made available when payments must be made, Basic Aid payments may have to be reduced or prorated for all school divisions. Projected division entitlements shown in Attachment B and in the Excel calculation file for the Senate show full funding for these technical corrections. Since the Senate amendments are fully funded, it is not anticipated that prorations will be required. Please see Attachment A for more information regarding the status of the issues related to these technical corrections.

Please note that the budget recommendations proposed by the House of Delegates and by the Senate are not final. A Conference Committee will make final recommendations after differences between the House and Senate budget proposals have been resolved. The current legislative calendar indicates that the Conference Committee's recommendations will be presented to each chamber during the week of February 21 for consideration and final adoption.

Final action by each chamber will occur before adjournment of the 2005 Session, which is scheduled for February 26, 2005. After the conclusion of the session, the department will provide you and your governing body with additional information and projected entitlements based on final General Assembly actions in a regulatory superintendents memorandum. After adjournment, the budget will be presented to the Governor. The Governor will have several options that include signing the budget with no changes, returning the budget to the General Assembly with vetoes, returning the budget to the General Assembly with amendments, or returning the budget to the General Assembly with some combination of vetoes and amendments. The General Assembly will consider any vetoes or amendments at the reconvened veto session scheduled for April 6, 2005.

Please note that 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 Senates and House of Delegates proposed amendments to the 2004-2006 budget and revised estimates 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/2005/inf038a.pdf
http://www.doe.virginia.gov/administrators/superintendents_memos/2005/inf038b.pdf
http://www.doe.virginia.gov/administrators/superintendents_memos/2005/inf038c.pdf
http://www.doe.virginia.gov/administrators/superintendents_memos/2005/inf038d.pdf