COMMONWEALTH of VIRGINIA
Department of Education
December 18, 2009
TO: Division Superintendents
FROM: Patricia I. Wright, Superintendent of Public Instruction
Governor Kaine’s proposed amendments to the fiscal year 2010 state budget, the “Caboose Bill”, were presented on Friday, December 18, 2009, before a joint session of the Senate Finance, the House Appropriations, and the House Finance committees. These amendments to the fiscal year 2010 (i.e., July 1, 2009, through June 30, 2010) budget will be considered by the 2010 Session of the General Assembly, which is scheduled to convene on January 13, 2010. The introduced budget bill containing the Governor’s amendments is House Bill 29/Senate Bill 29. The Governor’s proposed changes amend the fiscal year 2010 budget adopted at the 2009 Session (i.e., Chapter 781, 2009 Virginia Acts of Assembly).
The recommendations made by the Governor regarding the Direct Aid to Public Education budget include technical adjustments to the Standards of Quality (SOQ), incentive, categorical, and Lottery funded accounts, as well as specific policy changes in response to declining fiscal year 2010 state revenues. Attachment A to this memorandum provides a summary of the funding changes proposed by the Governor for fiscal year 2010 that affect the Direct Aid to Public Education and the Department of Education Central Office budgets.
Key changes summarized in Attachment A include technical updates to fall membership and March 31 average daily membership (ADM), revised sales tax and Lottery revenue estimates, and updates to enrollments and participation in various incentive and categorical programs. Please note that due to the decline in estimated sales tax revenue for fiscal year 2010, the local share of Basic Aid has increased. In addition to the technical updates, the Governor’s introduced fiscal year 2010 budget proposes the elimination of Textbook funding, the elimination of funded non-personal inflation in Basic Aid, an employer contribution rate premium holiday for VRS retirement, group life (and employee rate for group life only), and retiree health care credit for the fourth quarter of fiscal year 2010, the delay of the fourth quarter reimbursement for State Operated Programs from fiscal year 2010 to fiscal year 2011, and the use of approximately $219 million from the federal State Fiscal Stabilization Fund, American Recovery and Reinvestment Act of 2009, to fund the state’s share of Basic Aid.
Attachment B to this memorandum provides the estimated entitlements for each school division for the SOQ, incentive, categorical, and Lottery funded accounts for fiscal year 2010 based on the Governor’s proposed amendments. The estimated entitlements shown in Attachment B are based on the Department of Education’s latest projections of March 31, 2010, average daily membership (ADM). 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 Department’s latest projected entitlements; however, final payments on these accounts for fiscal year 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 for fiscal year 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. (Please note that the estimated entitlements shown for each school division in Attachment B are based on the Department’s projected ADM only and cannot be modified since Attachment B is in .pdf format.)
Although we have confidence in the accuracy of our ADM projections on a statewide basis, experience has shown that the accuracy of our ADM 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. Also, please note that changing the ADM value in the Excel calculation 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 estimates only. Actual sales tax payments made to school divisions on a semi-monthly basis in fiscal year 2010 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 Attachments A and B and in the Excel calculation file relates to the Governor’s proposed budget amendments for fiscal year 2010 as introduced. The House of Delegates and the Senate will have the opportunity to amend the Governor’s budget proposals during the 2010 General Assembly session. The General Assembly will adopt a final fiscal year 2010 budget before the end of the session, which is scheduled for March 13, 2010; therefore, the estimated 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 2010 General Assembly.
The Department will provide additional information during the General Assembly session as changes to the estimated fiscal year 2010 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 Superintendent’s Memorandum. Please note, the actual fiscal year 2010 entitlement payments will not be finalized until they are recomputed using actual March 31, 2010, ADM and other final program participation information.
If you have any questions or need additional information concerning the Governor’s proposed amendments to the fiscal year 2010 budget and the revised Direct Aid entitlements for fiscal year 2010, please contact Kent Dickey, assistant superintendent for finance, or the budget office at (804) 225-2025 or by e-mail (e-mail addresses available at http://doe.virginiainteractive.org/vdoe_directories/StaffByDivisions.aspx?o=Budget&w=true).