Friday, December 16, 2016

Budget Update

Governor McAuliffe presented his proposed amendments to the 2016-18 biennial budget to the Joint Money Committees today.  In his remarks, the Governor explained that he was proposing “no program reductions to K-12 education.”  However, the Governor went on to explain that  “There are changes in public education spending but those are all formula driven based on enrollment changes or changes related to revenues dedicated to public education like sales tax, Lottery, and the Literary Fund.”  See the Governor’s full remarks here. These “formula driven” reductions include a savings to the state of $14.7 million due to reduced student enrollment projections in FY17 and $19.9 million in FY18.  Also included in the Governor’s proposal is a reduction in sales tax revenue to public education of nearly $3.6 million in FY17 and $9.6 million in FY18.   


On the positive side, the Governor proposed an amendment to provide the state share of a 1.5% bonus, to be paid in December, 2017, for all SOQ-funded positions.  This proposal is in lieu of the 2% salary increase that was passed last year but which did not come to fruition because of the state revenue shortfall.  In his remarks today, the Governor indicated that there would be “no requirement of a local match” for the bonus.  It is important to note, however, that the $55 million being proposed by the Governor for the bonus only covers the state’s share of a 1.5% bonus and it is only for the SOQ-funded positions.