P.O. BOX 2120



March 29, 2004



Division Superintendents



Jo Lynne DeMary

Superintendent of Public Instruction



Final Amendments to the 2002-2004 Biennial Budget Passed by the 2004 General Assembly Caboose Bill (HB/SB 29)


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. The revenue estimates provided in this memorandum represent the state funding that is projected to be distributed to school divisions in fiscal year 2004 based on budget actions adopted by the 2004 Session of the General Assembly on March 13, 2004. The 2004 General Assembly adopted changes to the amended 2002-2004 biennial budget as introduced by Governor Warner (reference Informational Superintendent's Memorandum No. 222, dated December 19, 2003). Fiscal year 2004 began on July 1, 2003, and ends on June 30, 2004.


The amended fiscal year 2004 budget introduced by Governor Warner (HB/SB 29) is the budget against which the General Assembly adopted changes. The attachments to this memorandum provide information on the fiscal year 2004 changes adopted by the General Assembly. Unless changes are specifically noted in the attachments, Governor Warners proposals contained in the introduced versions of HB/SB 29 were adopted.


Attachment A to this memorandum provides a summary of the final actions of the 2004 General Assembly affecting fiscal year 2004 funding. These changes are noted as "Final General Assembly Action." For reference purposes, this attachment also repeats the information presented in Informational Superintendents Memorandum No. 47, dated March 3, 2004, which described the changes proposed by the House of Delegates and by the Senate.


Attachment B to this memorandum shows the estimated state funding entitlements for each school division for the Standards of Quality (SOQ), incentive, and categorical accounts for fiscal year 2004, based on the final General Assembly actions. The entitlements shown in Attachment B are divided into three groups designated by the Roman numerals to the left of the accounts. The first group (I) lists all of the Standards of Quality accounts; the second group (II) lists all of the incentive-based accounts that require school divisions to apply for the funds and to meet certain criteria; the third group (III) lists all of the categorical accounts. The entitlements shown in Attachment B do not include the direct grants (Group IV accounts) authorized by the General Assembly that are unique to certain school divisions.


The entitlements contained in Attachment B are based on the Department of Educations latest projection of March 31, 2004, average daily membership (ADM) for each school division for those accounts that use ADM in determining the amount of funding. If you wish to see the effects of a different ADM for your school division, please use the Excel-based calculation tool described in the paragraph below. Several of the categorical account entitlements (Group III accounts) shown in Attachment B are funded on a reimbursement basis and represent the departments latest projected entitlements based on the most recent data available to the department; however, final payments on these accounts in fiscal year 2004 will be based on actual reimbursements.


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 local matches in fiscal year 2004 for the SOQ, incentive, and categorical programs. This file gives divisions the opportunity to test the effect on state funding and local match requirements from using the departments projected ADM or a local projection of ADM. Attachment C to this memorandum provides detailed instructions for accessing the Excel file from the Department of Education website. The Excel file may be downloaded from the following address:


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 a more accurate projection of their March 31, 2004, ADM, they are encouraged to substitute their projection for the departments projection when using the Excel calculation file. Also, please note that changing the ADM in this file only changes the estimated funding for accounts that are funded on the basis of ADM in this file. The estimated funding changes occur only in this file and all other accounts in this file remain the same. (Attachment B contains projected entitlement information for each school division in PDF format. This attachment shows projected entitlements based on the departments projected ADM only and cannot be modified.)


The amended budget bill for the 2002-2004 biennium passed by the 2004 General Assembly (i.e., HB/SB 29) now goes to Governor Warner for action. The Governor will have several options that include signing the budget bill as presented to him with no changes, returning the budget bill to the General Assembly with vetoes, returning the budget bill to the General Assembly with amendments, or returning the budget bill to the General Assembly with some combination of vetoes and amendments. He must take this action prior to the reconvened veto session scheduled for April 21, 2004, when the General Assembly will consider any amendments or vetoes proposed by Governor Warner. Consequently, unless signed by Governor Warner with no changes, the budget bill as adopted by the General Assembly will not become final until after the reconvened session has concluded and the Governor signs the budget bill into law.


Please note that the information in this memorandum only pertains to final budget actions by the General Assembly affecting fiscal year 2004 state funding. Final budget actions have not been completed by the General Assembly regarding state funding for the 2004-2006 biennium. The General Assembly convened a special session on March 17, 2004, to complete its final budget actions for the 2004-2006 budget. When the General Assembly has adopted a budget for the 2004-2006 biennium, information will be provided to you in another memorandum as soon as possible.

If you have any questions, or need additional information, please contact Daniel S. Timberlake, assistant superintendent for finance, or budget office staff at (804) 225-2025.










C: local governing bodies