Superintendent's Memo #052-09

State seal, Commonwealth of Virginia

COMMONWEALTH of VIRGINIA
Department of Education

March 5, 2009

TO: Division Superintendents

FROM: Patricia I. Wright, Superintendent of Public Instruction

SUBJECT: Amendments to the 2008-2010 Biennial Budget Passed by the 2009 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 2009 and 2010 based on amendments to the 2008-2010 biennial budget adopted by the 2009 General Assembly on February 28, 2009. The adopted changes affect fiscal years 2009 and 2010. Fiscal year 2009 began on July 1, 2008, and ends on June 30, 2009. Fiscal year 2010 begins on July 1, 2009, and ends on June 30, 2010.

The budget amendments adopted by the General Assembly on February 28, 2009, change the 2008-2010 biennial budget (HB 1600/SB 850) as introduced by Governor Kaine (reference Informational Superintendent’s Memorandum No. 302, dated December 17, 2008). The attachments to this memorandum provide information on the changes adopted by the General Assembly to the 2008-2010 biennial budget. Unless changes are specifically noted in the attachments, Governor Kaine’s proposed budget amendments contained in the introduced version of HB 1600/SB 850 were adopted. Please note that the amended fiscal year 2008-2010 biennial budget adopted by the General Assembly and the projected state funding for each school division contained in Attachment B to this memorandum are based on the department’s 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:

Please note that the fiscal year 2010 funding projections contained in Attachment B and in the Excel calculation file include estimated division allocations of federal funds provided, via an amendment adopted by the 2009 General Assembly, from the education portion of the State Fiscal Stabilization Fund authorized in the recently passed federal stimulus law. Attachment A provides additional information regarding the General Assembly’s action related to this funding. Please be mindful of the potential restrictions related to the use of this funding. Guidance from the U.S. Department of Education related to the use of these funds is expected to be sent to states soon. Upon receiving this guidance, the department will provide additional information to you in a separate communication.

Several of the accounts shown in Attachment B are funded on a reimbursement basis and represent the department’s latest projections of those reimbursements; however, final payments on these accounts in fiscal years 2009 and 2010 will be based on actual qualifying expenses submitted by school divisions to the department and approved for reimbursement. Because Attachment B shows projected funding for each school division (based on the department’s projected March 31 ADM only) in PDF format, the entitlements cannot be changed to test the impact of different ADM assumptions. If you wish to see the effects of a different ADM projection on funding for your school division in those accounts where funding is based on ADM, please use the Excel calculation file described in the next paragraph.

In addition to the funding information contained in Attachment B, a downloadable Excel file has been created to assist school divisions in calculating projected state funding and projected required local matches for fiscal years 2009 and 2010 for most Direct Aid programs based on the amended 2008-2010 biennial budget adopted by the 2009 General Assembly. The Excel calculation file containing the state funding estimates for the amended 2008-2010 biennial budget adopted by the 2009 General Assembly is located on the following website:

http://www.doe.virginia.gov/school_finance/budget/calc_tools/index.shtml

Attachment C to this memorandum provides detailed instructions for accessing the Excel file from the Department of Education website.

The Excel file gives divisions the opportunity to change projected March 31 ADM to test the effect on projected state funding and projected local match requirements using the department’s projected ADM or a local projection of ADM for those accounts funded on the basis of ADM. (Attachment B contains projected state funding and required local match information for each school division in PDF format based on the department’s 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 to project state funding and required local matches.

Changing the projected March 31 ADM in the Excel file only changes the estimated funding for accounts that are funded on the basis of ADM, excluding the fiscal year 2009 school construction grants program payments that are funded based on ADM from the prior year. The estimated funding for all other accounts are unaffected by changing ADM in this file and, therefore, remain the same. The fiscal year 2009 final entitlements will not be finalized until they are recomputed using actual March 31, 2009, ADM and other final program participation information. The final fiscal year 2009 entitlements based on actual data will be communicated to you by a separate superintendent’s memorandum later this year. Actual fiscal year 2010 entitlements will not be finalized until after a similar process is followed next fiscal year.

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 during the year.

The amended 2008-2010 biennial budget passed by the 2009 General Assembly now goes to Governor Kaine for action. The Governor will have several options that include: signing the budget as presented to him 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.

After the Governor completes his actions on the budget, a reconvened “veto session” will occur where the General Assembly will consider any amendments or vetoes proposed by Governor Kaine. The reconvened session is scheduled for April 8, 2009. Consequently, unless signed by Governor Kaine with no changes, the amended 2008-2010 biennial budget as adopted by the 2009 General Assembly will not become final until after the reconvened session has concluded and the Governor signs the budget into law. If budget changes are made at the reconvened session that affect school divisions, you will be notified in another memorandum.

Questions regarding either the amended 2008-2010 biennial budget adopted by the 2009 General Assembly or the projections of state Direct Aid funding for fiscal years 2009 and 2010 may be directed to Kent Dickey, assistant superintendent for finance, or budget office staff at (804) 225-2025.

PIW / bkl

Attachments

a. Summary of the Amended 2008-2010 Biennial Budget Adopted by the 2009 General Assembly Affecting the Direct Aid to Public Education and Department of Education Central Office Budgets (PDF)
b. Projected Payments Based on the General Assembly's Adopted Amendments to HB 1600/SB 850 as Introduced from State Funds and Federal Funds Authorized in the State Fiscal Stabilization Fund of the American Recovery and Reinvestment Act of 2009 (ARRA) (PDF)
c. Instructions for Accessing the Entitlement Calculation Template for the Amended 2008-2010 Biennial Budget as Adopted by the General Assembly on February 28, 2009 (PDF)