The 2006 General Assembly is now in session
Week 7 Update—February 24, 2006
The General Assembly heads into its final two weeks toward a scheduled March 11 adjournment. Committees will complete most of their action next week. Highlights of the House and Senate versions of the budget, released this past week, will comprise this week’s summary.
The House Education Committee meets 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 (Meetings).
The Budget
This past Sunday afternoon, the House and Senate money committees released vastly different versions of a state budget for 2004-2006. While much of the attention on those differences has revolved around transportation funding, there also are differences of note in the education spending plans that were proposed.
Both budgets include more than $1 billion for rebenchmarking the Standards of Quality (SOQ). However, The House budget reduces state education spending proposed in the introduced budget by $14.9 million over the next two years, while the Senate version includes additional state spending of about $49 million in the next biennium.
The Senate version of the budget includes a 4% teacher salary increase for FY07 (effective December 1), while the House budget calls for raises of 3% in FY07 (effective January 1). Recall that the introduced budget proposed a 3% payhike; Governor Kaine submitted a budget amendment to provide an additional 1%.
The budgets fund different teacher retirement rates; the House a 9.2% rate (same as the introduced budget) and the Senate a 9.58% rate. The Senate increase reflects a change in the amortization period from the 30 years contained in the introduced budget to 26 years. The local cost for this change would be about $15 million, but the action also contributes to a healthier funded status of the teacher retirement pool.
The House proposes $15.8 million to increase the retired teacher health care credit payment from $2.50/month to $4.00/month for every year of service, and removes the cap on years of service. This initiative also would cost localities more than $20 million.
The House plan decreases funding by nearly $6 million over the two years to begin a phase-out of the cap used in calculating the amount of federal funds deducted from basic aid prior to dividing those costs between state and local governments. Currently, up to 29.22% of federal revenues from specified federal sources can be deducted. The amendment phases-in lifting this cap, by phasing out 10% of the cap in FY07 and 20% in FY08. This proposal negatively impacts localities with larger numbers of poor children in their schools.
Meanwhile, the Senate decreases SOQ funding by over $33 million by changing the inflation rates included in the funding formula to not recognize inflation that has already occurred. The formula already fails to recognize prospective inflation. Similarly, a Senate-proposed language amendment requires that a technical work group study various education cost drivers and options for cost savings. The Senate also proposes to use surplus lottery revenues to fund the $27.5 million/year school construction grants program, while discontinuing the use of lottery proceeds for the SOQ prevention, intervention and remediation program that was started just two years ago.
The Senate increases the per pupil payment for the Virginia Preschool Initiative for at-risk four-year olds unserved by Head Start from $5,00 to $5,700 in FY07 and $6,000 in FY08; this payment has not changed since the program began ten years ago.
Other proposals included in the two plans are as follows:
* The House establishes a Tuition Assistance Grant for Disabled Students Program, similar to the program contained in SB 545 that was carried over for the year in Senate Education and Health, to provide grants to students with disabilities to attend a private school of choice. The Senate budget adds funds to the Department of Education budget to administer a direct payment program to private schools that serve disabled students.
* The Senate restores $30 million to the Literary Fund to offset the transfer of these dollars to the general fund to help pay the costs of teacher retirement (more than $125 million is being transferred in the current fiscal year).
* The House eliminates nearly $6.5 million contained in the introduced budget for a new Hard-to-Staff Schools program. However, language is added to allow the pilot to continue through the use of No Child Left Behind (NCLB) funds.
* The House adds language to require school divisions to certify that adequate local funds to meet local match requirements for school facilities and incentive programs were appropriated. It also requires that localities return unexpended funds to the state unless carryover of funds is specifically provided.
* The House adds language to require school divisions to begin paying a portion of the cost of school division efficiency reviews beginning in FY07.
* Both budgets reduce funding for school breakfasts to reflect anticipated savings in the program.
* Both budgets decrease funding for Project Discovery.
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.
Please contact CEPI if you have any questions or need additional information about the 2006 General Assembly.
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