DEPARTMENT OF EDUCATION
P.O.
SUPTS. MEMO NO. 012
October 27,
2006
REGULATORY
|
TO: |
Division
Superintendents |
|
FROM: |
Billy K. Cannaday,
Jr. Superintendent of
Public Instruction |
|
SUBJECT: |
Final Enacted
2006-2008 Biennial Budget Signed by Governor Kaine (Chapter 10, 2006 Acts of
Assembly, Special Session I) |
On October 25, 2006, Governor Kaine signed House Bill (HB) 5032
into law as the final enacted 2006-2008 biennial budget (Chapter 10, 2006 Acts
of Assembly, Special Session I). HB 5032
amended the previous 2006-2008 budget (Chapter 3) to correct the sales tax
estimates for fiscal year 2007 and fiscal year 2008, and provided funding for a
hold harmless sales tax payment to divisions in fiscal year 2007 only. HB 5032 did not provide for a hold harmless
sales tax payment to divisions in fiscal year 2008. Fiscal year 2007 began on July 1, 2006, and
ends on June 30, 2007. Fiscal year 2008
begins on July 1, 2007, and ends on June 30, 2008.
Previously, the
Department of Education notified you of the changes contained in HB 5032 in Regulatory
Superintendents Memorandum No. 009, dated October 6, 2006, and the
accompanying Excel calculation template.
The information contained in Regulatory
Superintendents Memorandum No. 009, as well as the data in the Excel
calculation template, reflect the final 2006-2008 appropriation act as approved
by the Governor and enacted as Chapter 10.
The Governor approved HB 5032 as adopted by the General Assembly with no
changes, and so the information in the HB 5032 calculation template can now be
considered final.
Please continue to
reference Regulatory
Superintendents Memorandum No. 009 and the Excel calculation template for
HB 5032 to calculate projected state funding and required local effort and
matches for fiscal years 2007 and 2008. Information
referenced in the memorandum and calculation template can now be considered the
final, enacted biennial budget for 2006-2008.
The Excel file may be downloaded from the following Web address: http://www.doe.virginia.gov/VDOE/Finance/Budget/calctools.html
Please note that
Chapter 10 contains the corrected sales tax estimates for fiscal years 2007 and
2008. Due to the reduction in the sales
tax estimates, the state share of Basic Aid, Enrollment Loss, and Supplemental
Basic Aid increases in both years. The
semi-monthly payments of the fiscal year 2007 Basic Aid entitlement will be
based on the adjusted fiscal year 2007 Basic Aid entitlement amount adopted in
Chapter 10 beginning on the November 16, 2006, electronic fund transfer (EFT) to
your school division. Adjustments to the
Enrollment Loss and Supplemental Basic Aid accounts will be reflected at the
time payments for these accounts are made.
In addition, Chapter 10 provides $56.7 million in fiscal year
2007 only for the hold harmless sales tax payment to divisions in order to
maintain the same level of projected state funding in fiscal year 2007 as
provided by the Chapter 3 budget. These
hold harmless payments will be made on a quarterly basis, with the first
quarter payment projected to be paid to divisions on the November 16, 2006,
EFT.
Chapter 10 authorizes the department to make the hold harmless
sales tax payments to school divisions in fiscal year 2007 on a quarterly
basis. The hold harmless sales tax
payment is subject to reduction based on any subsequent increases in the sales
tax estimates appropriated by the General Assembly or in the event actual sales
tax collections exceed the estimated sales tax.
To account for this potential reduction to the hold harmless sales tax
payments, Chapter 10 authorizes the department to make adjustments to the
quarterly hold harmless sales tax payments to prevent the overpayment of this
account pending any subsequent increases to the sales tax estimate approved by
the General Assembly or in the event actual sales tax collections exceed the
estimated sales tax. Any reduction to
the hold harmless sales tax payments in fiscal year 2007 due to a subsequent
increase in the sales tax estimate approved by the General Assembly or due to
actual sales tax collections exceeding the estimated sales tax will be
communicated to school divisions in a separate superintendent's
memorandum.
For all other
accounts, the funding actions contained in the Chapter 3 budget previously
communicated in Regulatory
Superintendents Memorandum Number 3 dated July 7, 2006, are maintained.
Questions regarding
Chapter 10, and the projections of Direct Aid entitlements for fiscal years
2007 and 2008 as contained in the Excel calculation template may be directed to
budget office staff at (804) 225-2025.
BKCJr/kcd