Week 7 Update—February 27, 2004

The General Assembly heads into its final two weeks toward a scheduled March 13 adjournment. Committees will complete most of their action next week, while sharp differences remain between the House and Senate versions of the budget. Highlights of the House and Senate versions of the budget will comprise this week’s summary.

The House Education Committee is scheduled to meet on Mondays at 9:00 a.m. in House Room C and Wednesdays at 8:30 a.m. in the Appropriations Room.  The Senate Education and Health Committee meets 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 Budget

This past Sunday afternoon, the House and Senate money committees released vastly different versions of a state budget for 2004-2006, setting the stage for a big budget showdown over the next two weeks and possibly beyond. The Senate plan relies on enhanced revenues from changes in tax policy to pump additional state dollars into the likes of public and higher education, transportation and health services. The House proposal balances the budget largely by repealing long-standing sales and use tax exemptions for businesses, while level funding and in some cases, reducing programs. In long floor sessions on Thursday, the full House and Senate approved their respective spending plans. The House made no amendments to its plan, while the Senate included in its budget the language of revenue-generating bills previously-approved by the Senate, but that had been rejected earlier in the week by the House Finance Committee.

Overall, the Senate budget provides an additional $1.7 billion for public education over the FY04 state allocations, while the House plan increases funding around $72 million. Specifically, the Senate proposes to fund the Standards of Quality (SOQ) rebenchmarking and rejects the provision in the introduced budget that would reduce state education costs by deducting certain federal and state revenues (totaling over $400 million) from the cost calculations. It also earmarks over $430 million for several initiatives recommended by the Board of Education (BOE) last summer that would recognize prevailing practices in school divisions. Those initiatives include providing resource teachers in art, music and physical education; providing planning time to secondary school teachers and funding technology instructional and support personnel. The Senate plan also includes nearly $100 million for services for at-risk four year olds and $46 million to complete the phase-in, first enacted in 2002, that restores certain administrative support positions to the SOQ cost calculation that had been dropped in the early 1990’s. Nearly $1 million is included to conduct six additional school division efficiency reviews. Three reviews have been or are being conducted as part of a pilot program. The Senate plan also funds teacher retirement at 6.56%.

The House plan funds the SOQ rebenchmarking and rejects the proposal to deduct locally-generated revenues from the cost calculation ($111 million). It eliminates the BOE-proposed remediation program ($42.6 million) and redirects $20 million for the Student Achievement Grant program to the local revenue deduction item. It also reallocates $9.9 million in excess lottery funds in FY04 to support No Child Left Behind initiatives in FY05 and transfers non-personnel technology costs from the SOQ. The House plan funds teacher retirement at a rate of 6.03% for FY05; in FY06 the rate would be 6.63%, but the state would base its funding only on 6.03%. In future years, the state would only pay its share of the 6.03% rate, even if the rate increases to double-digits, as has been predicted by the VRS actuary. Finally, in the higher education portion of the budget, the House plan proposes to reduce funding for CEPI by nearly $90,000 over the biennium. 

By the middle of next week, the House and Senate will formally reject the budget proposed by the other and will appoint conferees to try to iron out differences in the two proposals.

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