COMMONWEALTH OF VIRGINIA

DEPARTMENT OF EDUCATION

P.O. BOX 2120

RICHMOND, VIRGINIA 23218-2120

SUPTS. MEMO NO. 261

December 21, 2007

INFORMATIONAL

TO:

Division Superintendents

 

FROM:

Billy K. Cannaday, Jr.

Superintendent of Public Instruction

 

SUBJECT:

2008-2010 Biennial Budget as Introduced by Governor Kaine

 

Governor Kaine presented his 2008-2010 biennial budget on Monday, December 17, 2007, before a joint session of the Senate Finance, the House Appropriations, and the House Finance committees. This budget will be considered by the 2008 Session of the General Assembly, which is scheduled to convene on January 9, 2008. The Governors introduced budget for the 2008-2010 biennium covers fiscal year 2009 (which begins July 1, 2008, and ends June 30, 2009) and fiscal year 2010(which begins July 1, 2009, and ends June 30, 2010). The introduced budget bill containing Governor Kaines budget recommendations for the 2008-2010 biennium is House Bill/Senate Bill 30.

 

The Governors recommendations for the 2008-2010 Direct Aid to Public Education budget include increased state funding for biennial rebenchmarking updates, as well as funding for new initiatives. The Governors proposed budget provides funding for the state share of all Standards of Quality (SOQ) programs, and the continuation of all existing incentive, categorical, school facilities, and supplemental education programs in Direct Aid. Overall, total state funding for public education in the 2008-2010 biennium will increase by approximately $1.1 billion over the fiscal year 2008 base.

 

Attachment A to this memorandum provides a summary of the funding changes proposed by the Governor for the 2008-2010 Direct Aid budget. Budget proposals for the departments Central Office budget that pertain to school divisions are also summarized in Attachment A. Key recommendations in Governor Kaines 2008-2010 introduced budget impacting public education funding include:

 

  • technical updates to continue and revise the SOQ, incentive, categorical, and school facilities funding for the most recent funded salary amounts, prevailing support costs, inflation, enrollment projections, and other updates;
  • new composite indices for the 2008-2010 biennium;
  • new sales tax and Lottery revenue estimates;
  • revisions to the employer rates for fringe benefit contributions paid to the Virginia Retirement System (VRS);
  • continuation of the SOL Web-based Technology Initiative funded through Virginia Public School Authority (VPSA) note proceeds;
  • continuation of the Literary Fund Interest Rate Subsidy program to support school construction over the biennium;
  • a 3.50 percent compensation supplement for instructional positions and a 3.0 percent compensation supplement for support positions funded in the SOQ and other state-supported programs, effective July 1, 2009, in fiscal year 2010;
  • an expansion of the Virginia Preschool Initiative;
  • new incentive funding for data coordinators in at-risk high schools;
  • additional funding for National Board Certification bonuses, Career Switcher Mentors, and the Virtual Virginia program.

 

Attachment B to this memorandum lists the projected entitlements for each school division for the SOQ, incentive, categorical, and school facilities accounts for fiscal years 2009 and 2010 based on the Governors introduced 2008-2010 budget. The projected entitlements shown in Attachment B are based on the Department of Educations latest projections of March 31 average daily membership (ADM) for fiscal years 2009 and 2010 only and cannot be modified. The entitlements shown in Attachment B do not include the supplemental education grants authorized by the General Assembly that are unique to certain school divisions. Several of the categorical account entitlements 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 2009 and 2010 will be based on actual, eligible reimbursement requests submitted by school divisions and approved by the department.

 

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 2009 and 2010 for most Direct Aid programs. This file gives divisions the opportunity to change ADM to test the effect on projected state funding and projected local match requirements using the departments projected ADM or a local projection of ADM. (Attachment B contains projected entitlement information for each school division in PDF format based on the departments projected ADM only and cannot be modified.)

 

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 value in the Excel 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 Excel file and, therefore, remains the same.

 

Also note that sales tax estimates in the Excel calculation file are revenue projections only. Actual sales tax payments made to school divisions in fiscal years 2009 and 2010 on a semi-monthly basis will be based on actual sales tax receipts. However, pursuant to the appropriation act, the Basic Aid entitlement calculation is based on the estimated sales tax appropriation only and is not adjusted for actual sales tax revenues received.

 

Attachment C to this memorandum provides detailed instructions for accessing the Excel calculation 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

 

Attachments D and E summarize several of the major data inputs that are updated in the calculation of Direct Aid accounts for the 2008-2010 biennium. Attachment D lists the sources of various input data updated for the 2008-2010 biennium; Attachment E shows the SOQ funded instructional salaries used for the 2008-2010 biennium.

 

It is important to remember that the information provided in Attachment B and in the Excel calculation file relates to the Governors 2008-2010 biennial budget as introduced. The House of Delegates and the Senate will have the opportunity to amend the Governors budget proposals during the 2008 General Assembly session. The General Assembly will adopt a final 2008-2010 biennial budget before the end of the 2008 session, which is scheduled for March 8, 2008; therefore, the projected entitlements contained in Attachment B and in the Excel calculation file are projections only and are subject to change as a result of legislative action by the 2008 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 actual fiscal year 2009 and fiscal year 2010 entitlements will be paid on the basis of final costs computed using actual March 31 ADM and other final program participation information that applies to each fiscal year and each program.

 

Questions regarding the Governors introduced budget for the 2008-2010 biennium and projected Direct Aid entitlements for fiscal years 2009 and 2010 may be directed to Kent Dickey, assistant superintendent for finance, or budget office staff at (804) 225-2025.

 

BKCJr/shd

 

Attachments

 

http://www.doe.virginia.gov/administrators/superintendents_memos/2007/inf261a.pdf

http://www.doe.virginia.gov/administrators/superintendents_memos/2007/inf261b.pdf

http://www.doe.virginia.gov/administrators/superintendents_memos/2007/inf261c.pdf

http://www.doe.virginia.gov/administrators/superintendents_memos/2007/inf261d.pdf

http://www.doe.virginia.gov/administrators/superintendents_memos/2007/inf261e.pdf