Updated Friday January 20, 2006

The Schedule

The 2004 General Assembly session began Wednesday, January 14, 2004. The session runs 60 days and is scheduled to end on March 13, 2004. “Cross-over day,” the last day for each house to act on its own bills, is February 17. House and Senate versions of the two-year budget for fiscal years 2005 and 2006 will be released on February 22.  

 The House Education Committee is scheduled to meet on Mondays at 9:00 a.m. in House Room C and Wednesdays at 8 a.m. in the Appropriations Room.  The Senate Education and Health Committee will meet on Thursdays at 9:00 a.m. in Senate Room B.  Sub-committees will meet periodically throughout the session. Click here for a schedule of weekly meetings (http://leg1.state.va.us/cgi-bin/legp504.exe?021+oth+MTG

The Issues

Once again this year, the General Assembly will focus on budget matters. This time around though, intertwined within the budget, is Governor Warner’s proposal to revise various parts of the state tax code. In short, the governor’s plan would eliminate the state portion of the sales tax on food and the personal property tax, while partially eliminating the estate tax. It also would restructure income tax brackets and lower income taxes for all filers on the first $20,000 of income while creating a 6.25% tax bracket for those with taxable income above $100,000. The plan would increase the state cigarette tax and allow all localities to impose local cigarette taxes up to 50 cents/pack, increase the state sales tax by one cent (from 4.5% to 5.5%) on non-food items and streamline its collection, close corporate income tax loopholes and revise the age deduction for senior citizens. According to the governor, the plan reduces the tax burden for 65% of Virginians. Rival plans also are being submitted in both the House and Senate.

A budget shortfall of $1.9 billion is projected on the $25 billion plan. The proposed budget assumes 5.3% growth in revenue for FY05 and 5.1% in FY06 without tax reform. If the tax policy changes described above were to be adopted, projected revenue growth in each year would be near 7%. The House Appropriations Committee will devise its budget based on no additional revenues from tax policy changes, while the House Finance Committee will consider any such policy changes. The Senate Finance Committee, which handles both revenue and appropriation issues for that body, is expected to produce a budget that contains some increased revenues.

Here is a run-down of major education-budget provisions contained in Governor Warner’s proposed spending plan:

More than $836 million is included to update the Standards of Quality (SOQ) to account for enrollment growth, inflation and increased benefit costs. Enrollment is expected increase about 31,000 students over the biennium. A teacher salary increase of 3%, effective December 1, 2005, contingent on tax reform ($51 million) is proposed. The school construction grants program is continued ($27.5 million each year). The Literary Fund will once again support an interest rate subsidy amount (reduced from $10 million to $5 million each year) for school construction loans. The budget also diverts $268 million ($132 million in FY05 and $136 million in FY06) in Literary Fund dollars to support teacher retirement.

There is a $418 million reduction in basic aid as a result of 1) a provision requiring that federal money and tuition paid to other localities ($307 million) be deducted from the calculated SOQ cost prior to those costs being split between the state and localities (this means that state and local funding shares will be smaller); the deduction will be based on the lower of a division’s actual federal receipts per pupil for several federal programs, including Title I, or the statewide average, and 2) reinstituting the deduction of prevailing locally generated revenues from the basic aid calculation ($111 million). In 2002, the General Assembly targeted $50 million to basic aid to eliminate the practice of deducting locally generated revenue from the SOQ cost calculations. The budget also includes a $110 million decrease as a result of deducting non-personal technology costs from the SOQ.

The proposed spending plan pools retirement contribution rates for teachers and state employees, contingent on tax reform, to yield a teacher rate of 6.56% of salary. The state saves $27.3 million by adjusting employer retirement contribution funding to reflect a 30-year, not 23-year valuation period as calculated by VRS. The retiree health care credit rate is decreased from .67 percent to .59 percent, saving localities about $8.5 million, while the state saves about $27 million.

About $41 million in additional lottery profits is targeted for paying the state share of cost for a revised SOQ prevention/intervention/remediation program (to replace the current SOQ remediation program) recommended by BOE to provide one-half hour of additional instruction per day to identified students. Currently, lottery profits are sent to localities, with the requirement that at least 50% be used on non-recurring costs and no more than 50% be used recurring costs. Just over $10 million each year is included to continue the Student Achievement Grants program enacted in 2003, while additional funding of $2.8 million in both years is proposed for Project Graduation (regional academies and on-line tutorials for students who need help preparing for SOL tests). The budget includes $1.5 million for teachers receiving national board certification, but reduces the amount of both the initial and continuing bonuses.

The budget includes three initiatives contingent on passage of tax reform. These include 1) $4.5 million to reduce the current Title I deduction from 100% to 67%, allowing school divisions previously initiating at-risk programs with federal dollars to start receiving some state money for their programs; 2) $19.7 million for increasing from 10 to 17 teachers/1,000 ESL students, and 3) $3.7 million in “no loss” funding to ensure that no division receives less funding than in FY04.

Finally, DOE is appropriated $9.5 million to develop programs to help local school divisions meet federal No Child Left Behind (NCLB) requirements and $4.4 million for a statewide, student-level data collection system for NCLB. The budget includes $6.3 million for increased costs for the SOL testing program and $3.7 million for DOE to continue implementing on-line testing.

We can expect education funding to be a critical part of discussions in the money committees in the coming weeks. In his “State of the Commonwealth” address on the session’s opening day, Governor Warner told lawmakers he would not accept a budget that fails to meet Virginia's commitment to education. Click here for additional information about Governor Warner's proposed education budget for 2004-2006  (http://leg2.state.va.us/MoneyWeb.NSF/sb2004 )

Education Legislation

Many education-related bills already have been introduced and printed. Here are some of the highlights. Additional legislation will be summarized in next week's report. 

HB 161 proposes various revisions to the SOQ as proposed by the Board of Education.

HB 289 would preclude the use of passenger vans and other vehicles for transporting public and private school students.

HB 337 directs Virginia to withdraw from participation in the federal No Child Left Behind Act.

HB 364 delays implementation of SOL student graduation requirements until all schools are accredited.

HB 380 proposes numerous revisions to the six-year old charter schools law, including increasing the term of charter from three to seven years, deleting school board authority to revoke the charter if it finds the charter is not in the public interest or for the welfare of the students, and allowing school boards to hire and place in a charter school, personnel otherwise qualified but who may be unlicensed as teachers and administrators. 

HB 537 directs the BOE to require passage of the School Leader's Licensure Assessment (SSLA) as a condition of initial licensure for principals.

HB 575 allows the BOE to waive the requirement that school divisions provide additional teaching days to compensate for school closings due to a declared state of emergency.

HB 672 directs the BOE to administer and score SOL tests for General Assembly, Board of Education and local school board members desiring to take such tests.

SB 27 requires employers to grant parental leave for school involvement.

SB 138 repeals the post-Labor Day school opening law.

SB 145 requires teacher dismissal and licensure revocation petitions to be addressed together, whether at a hearing before the school board or fact-finding panel, in order to avoid duplicative hearings.

SB 222 requires BOE guidelines for school boards developing cultural diversity policies.

E-mail Response

Questions or More Information? Please contact CEPI if you have any questions or need additional information about the 2004 General Assembly.

Back to 2004 General Assembly

Click here to see archived  General Assembly Updates.

Back to Top