Updated Friday January 20, 2006

2005 GENERAL ASSEMBLY

EDUCATION BUDGET HIGHLIGHTS

Aid to Public Education

One of the General Assembly’s final actions of the 2005 session was adoption of amendments to the 2004-2006 biennial budget. The approved budget allocates an additional $42.4 million for the biennium for direct aid to public education and an additional $1.6 million for the Department of Education. These figures are slightly below those contained in the budget introduced by Governor Warner in December. Student enrollment figures also were revised downward. While the student population is growing, enrollment estimates for the two-year period have been lowered by 18,600.

Salary increases for Standards of Quality (SOQ) instructional and support staff included in the introduced budget were maintained in the approved spending plan. Specifically, $54.8 million is included for the state share of a 3% increase, to be effective December 1 of this year. Language is included that the goal is to improve the average classroom teacher salary by 3%, but that the funding is not a mandate to increase salaries.

The approved budget includes $1.2 million for a new state-supported school breakfast reimbursement program that will provide a 20-cent reimbursement incentive to schools that increase the number of breakfasts served. Local school divisions may not use this additional state support to supplant funds already being spent on nutrition programs. 

The budget restores $10 million in FY06 to the Literary Fund, to be used for school construction loans for projects on the First Priority Waiting List. The introduced budget used total of $25 million in Literary Fund dollars for interest rate subsidies for school capital projects. Nearly $260 million is being diverted from the Literary Fund over the two-year budget to pay for teacher retirement.

The budget redirects $22.7 million in excess lottery proceeds (FY04) to the state share of basic aid in FY05, resulting in an $8.8 million decrease in the lottery distribution to school divisions, but allows an additional $26 million in estimated FY05 and FY06 lottery proceeds to be split between basic aid and local school divisions. Lottery funding to localities is projected at $156.5 million in FY05 and $163.5 million in FY06.

Nearly $2.3 million is added to restore half of the eight percent reduction taken in 2002 to at-risk add-on funding payments. Truancy prevention also is added to the list of programs that may be supported with this funding, with $675,000 specifically directed for a one-year pilot truancy program in the City of Richmond.

Lower than expected fall membership and participation levels in several highly visible programs resulted in a reduction in state funding from the introduced version of the budget. Specifically, funding is reduced by $6.5 million in FY06 for the at-risk four-year-old program and by a total of $3.1 million in FY05 and FY06 for the K-3 primary class size reduction program.

The introduced budget provided $10.2 million in FY05 and $9.4 million in FY06 to make technical corrections affecting various accounts (such as ESL and special education counts, the non-professional retirement contribution rate and instructional positions based on corrected school level enrollment). The approved budget eliminates the entire amount in FY05, but fully funds technical corrections of $13.45 million in FY06. Based on these actions, there is a projected shortfall of $11.7 million in basic aid funding in FY05. If sufficient savings in actual costs are not obtained, basic aid payments may have to be reduced or prorated among all school divisions late in FY05.

The introduced budget reduced funding for the Virginia Public School Authority (VPSA) technology grant program by $290,000 in FY05 and by $288,000 in FY06 based on a reduction in the number of schools reported in fall membership. The approved budget includes an additional technical reduction of $390,000 each year, the result of correcting the number of schools qualifying for VPSA technology grants.

The budget provides just over $1 million in general and nongeneral funds over the two years to support the turnaround specialist credential program. Funding is included to provide salary incentives for 10 principals in the program for three years. Also, budget language allows school divisions awarded competitive leadership development grants in either year of the biennium to retain any unspent balances and spend the remainder for the intended purposes during the next two fiscal years.

The budget adds $800,000 to provide support and additional vocational-technical education equipment for all school divisions and $400,000 for the Career and Technical Education Resource Center, which provides statewide vocational curriculum and instructional materials. It adds $200,000 for the Jobs for Virginia Graduates program, which provides career specialists to support school-to-graduation-to-work programs. A language amendment allows basic aid funding attributable to school nurses to be used to purchase defibrillators at high schools offering interscholastic sports. The budget also provides $81,000 in FY06 for the Commission on Civics Education.

A language amendment is included which eliminates the requirement that enrollments at academic year Governor’s School be capped at the current levels. An additional $273,546 is provided in FY05 to support this proposed language change. Funding for FY06 is not affected at this time.

Finally, the plan removes proposed new language and $3.6 million in the introduced budget that changed the current method for reimbursing school divisions for medical service costs, requiring that the current Medicaid reimbursement system remain unchanged pending further negotiations with the federal Centers for Medicare and Medicaid Services. 

Department of Education

The approved budget requires consolidation of the residential deaf, blind and multi-disabled education services currently offered at the two schools at Staunton and Hampton, at a new or renovated facility to be identified in a plan adopted by the Board of Education. It also provides nearly $1.2 million in FY06 for school efficiency reviews (down from $1.4 million contained in the introduced budget). The spending plan reduces funding by $500,000 in FY06 for a new statewide on-line career planning system, by $1.2 million for expansion of “Race to the GED” instruction and testing (it also eliminated just over $643,000 for GED radio announcements), and by $200,000 for a proposed pilot program through the PASS initiative to train school board members from four low-performing school divisions. Additional funding for the DOE to conduct reviews of schools that are accredited with warning, and federal funds for No Child Left Behind (NCLB) Act initiatives, as contained in the introduced budget, also are retained in the approved spending plan.

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