DEPARTMENT OF EDUCATION
SUPTS. MEMO NO. 302
December 17, 2008
Patricia I. Wright
Superintendent of Public Instruction
Amendments to the 2008-2010 Biennial Budget as Proposed by Governor Kaine (HB 1600/SB 850)
Governor Kaine's proposed amendments to the current 2008-2010 biennial budget (i.e., Chapter 879, 2008 Acts of Assembly) were presented on Wednesday, December 17, 2008, before a joint session of the Senate Finance, the House Appropriations, and the House Finance committees. The Governor's amended budget includes a total general fund revenue reduction of approximately $2.9 billion compared to the biennial budget passed last spring and various measures across state government to address this revenue shortfall.
The Governor's amendments to the 2008-2010 budget will be considered by the 2009 Session of the General Assembly, which is scheduled to convene on January 14, 2009. The Governor's amendments adjust funding for both years of the biennium, fiscal year 2009 (current year) and fiscal year 2010. Fiscal year 2009 began on July 1, 2008, and ends June 30, 2009. Fiscal year 2010 begins July 1, 2009, and ends June 30, 2010. The introduced budget bill containing the Governor's amendments is House Bill 1600/Senate Bill 850.
The recommendations made by the Governor regarding the Direct Aid to Public Education budget include technical updates to the Standards of Quality (SOQ), incentive, categorical, and Lottery accounts, along with the policy changes listed below. The major actions affecting public education proposed in Governor Kaine's amended 2008-2010 budget include:
Establishing a statewide cap on certain funded SOQ support positions based on a ratio of one funded support position for every 4.03 funded SOQ instructional positions in fiscal year 2010;
Eliminating funding for the School Construction Grants Program in fiscal year 2010;
In fiscal year 2010, moving $55.8 million in funding for accounts previously funded with general funds to the Lottery Service Area supported by Lottery proceeds;
Creating a one-time Funding Loss Cap account to limit school divisions' projected state funding loss in fiscal year 2010 to $403.90 per pupil based on the Governor's amendments listed in the first three bullets above;
Updating accounts for enrollment changes, program participation, and other technical changes in fiscal years 2009 and 2010;
Eliminating the two percent Compensation Supplement payment in fiscal year 2010;
Updating Group Life and Retiree Health Care Credit employer contribution rates for fiscal year 2010;
Language change allowing any locality that has met its fiscal year 2009 required local effort for the Standards of Quality or required local match for incentive, school construction, or Lottery-funded programs to carry over into fiscal year 2010 any remaining state funds;
Language changes providing flexibility to school divisions on the types of positions that can be funded using the state and local funds calculated for certain funded positions;
Language changes providing flexibility for school divisions to make withdrawals from the School Construction and Lottery escrow funds for operational expenses in fiscal year 2010 only.
Attachment A to this memorandum provides summary information on the funding changes proposed by the Governor for fiscal years 2009 and 2010 that affect the Direct Aid to Public Education budget.
Attachment B to this memorandum lists the estimated state payments (and local matches) for each school division for the SOQ, school facilities, incentive, categorical, and Lottery accounts for fiscal year 2009 and fiscal year 2010 based on the Governor's amendments to the 2008-2010 budget. The estimated payments shown in Attachment B are based on the Department of Education's latest projections of March 31 average daily membership (ADM) for fiscal years 2009 and 2010 only. The projected payments shown in Attachment B do not include the direct grants (Financial Assistance for Supplemental Education service area) authorized by the General Assembly that are unique to certain school divisions. Several of the categorical, incentive, and Lottery account payments shown in Attachment B are funded on a reimbursement basis and represent the department's latest projected payments; however, final payments on these accounts in fiscal years 2009 and 2010 will be based on actual, eligible reimbursement requests submitted by school divisions.
In addition to the projected payment information contained in Attachment B, a downloadable Excel file has been created to assist school divisions in calculating projected state payments 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 local match requirements using the department's 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.
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. 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 website. The Excel file may be downloaded from the following Web address:
It is important to remember that the information provided in Attachment B and in the Excel calculation file relates to the Governor's proposed amendments to the 2008-2010 budget as introduced. The House of Delegates and the Senate will have the opportunity to amend the Governor's budget proposals during the 2009 General Assembly session. The General Assembly will adopt a final amended 2008-2010 biennial budget before the end of the 2009 session, projected to be late February 2009; therefore, the estimated payments 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 2009 General Assembly.
The department will provide additional information during the General Assembly session as changes to the estimated Direct Aid payments occur. After the conclusion of the session, projected payments based on final General Assembly actions will be sent to you in another Superintendent's Memorandum. Please note, the actual fiscal year 2009 payments will not be finalized until they are recomputed using actual March 31, 2009, ADM and other final program participation information. Actual fiscal year 2010 payments will not be finalized until after a similar process is followed next year.
Questions regarding the Governor's proposed amendments to the 2008-2010 budget and the revised estimates of Direct Aid payments for fiscal years 2009 and 2010 may be directed to Kent Dickey, assistant superintendent for finance, or budget office staff at (804) 225-2025.
Amendments to the 2008-2010 Budget (PDF)
b. Projected State Payments for 2008-2010 Based on the Governor's Introduced Amendments (PDF)
c. State Payment Calculation Template Instructions (PDF)