COMMONWEALTH OF VIRGINIA

DEPARTMENT OF EDUCATION

P.O. BOX 2120

RICHMOND, VIRGINIA 23218-2120

SUPTS. MEMO NO. 1

March 4, 2005

REGULATORY

TO:

Division Superintendents

 

FROM:

Jo Lynne DeMary

Superintendent of Public Instruction

 

SUBJECT:

Amendments to the 2004-2006 Biennial Budget Passed by the 2005 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 following the conclusion of the General Assembly session based upon the budget actions taken by the General Assembly with respect to public education. The revenue estimates provided in this memorandum represent the state funding that is projected to be distributed to school divisions in fiscal years 2005 and 2006 based on amendments to the 2004-2006 biennial budget adopted by the 2005 General Assembly on February 27, 2005. 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.

 

The 2005 General Assembly adopted changes to the 2004-2006 biennial budget as introduced by Governor Warner (HB 1500/SB 700; reference Informational Superintendent's Memorandum No. 255, dated December 17, 2004). The attachments to this memorandum provide information on the changes to the Governors introduced budget that were adopted by the General Assembly. Unless changes are specifically noted in the attachments, Governor Warners proposals contained in the introduced version of HB 1500/SB 700 were adopted as outlined in Informational Superintendents Memorandum No. 255. Please note that the amended 2004-2006 budget adopted by the General Assembly and the entitlements for each school division contained in Attachment B to this memorandum are based on the departments latest projections of March 31 average daily membership (ADM) for those accounts that use ADM to determine the amount of funding.

The attachments to this memorandum include:

 

 

 

 

The projected Direct Aid entitlements adopted by the General Assembly shown in Attachment B use the Department of Educations latest (from fall 2004) projections of March 31 ADM for each school division for fiscal years 2005 and 2006. (Note: Attachment B shows 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 in those accounts where funding is based on ADM, please use the Excel calculation file described in a subsequent paragraph.)

 

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 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. Several of the categorical account entitlements (Group III accounts) shown in Attachment B 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 for reimbursement. 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.

 

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 required local matches in fiscal years 2005 and 2006 for the Direct Aid accounts in groups I, II, and III based on the amended 2004-2006 budget adopted by the 2005 General Assembly. 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 (the basis of the entitlements shown in Attachment B) or a local projection of ADM for those accounts funded on the basis 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.

 

Please note that changing the ADM in the Excel file 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 file and, therefore, remains the same.

 

Attachment C to this memorandum provides detailed instructions for accessing the Excel file from the Department of Education Web site. The Excel file may be downloaded from the following Web address:

 

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

 

Informational Superintendents Memorandum No. 38, dated February 11, 2005, provided information on proposed funding for various technical corrections in fiscal years 2005 and 2006. The funding to support these corrections in fiscal year 2005 was recommended by the Governor in his introduced budget and through his executive amendments. The General Assembly directed that school division entitlements and per pupil amounts reflect the corrected data in fiscal year 2005 and fiscal year 2006. Consequently, the per pupil amounts and projected division entitlements contained in Attachment B to this memorandum and in the Excel calculation file include full funding for the technical corrections for all school divisions in fiscal years 2005 and 2006. The amounts shown in Attachment B and in the Excel calculation file have not been reduced to reflect an estimated proration amount in the event sufficient funding is not available.

 

Please note that the final appropriation approved in fiscal year 2005 for Basic Aid did not include sufficient funding to support these corrections discussed above unless significant savings occurs in other Direct Aid accounts and can be transferred to Basic Aid. If sufficient savings in actual costs are not achieved prior to the close of the current 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 in fiscal year 2005. Based on the department's estimates, the Basic Aid appropriation is underfunded by approximately $11.7 million in fiscal year 2005 or approximately 0.5% of the total projected Basic Aid entitlements for fiscal year 2005. The amendments to fully fund the fiscal year 2006 entitlements were approved.

 

The budget bill containing the amended 2004-2006 biennial budget passed by the 2005 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 6, 2005, when the General Assembly will consider any amendments or vetoes proposed by Governor Warner. Consequently, unless signed by Governor Warner with no changes, the budget bill as adopted by the 2005 General Assembly will not become final until after the reconvened session has concluded and the Governor signs the budget bill into law. If budget changes are made at the reconvened session that affect school divisions, you will be notified in another memorandum.

 

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 amended 2004-2006 biennial budget adopted by the 2005 General Assembly and the 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/reg001a.pdf http://www.doe.virginia.gov/administrators/superintendents_memos/2005/reg001b.pdf

http://www.doe.virginia.gov/administrators/superintendents_memos/2005/reg001c.pdf

 

C: local governing bodies