Budget Update Provided to House and Senate Money Committees

Last week, Governor Ralph Northam announced revenue numbers for Virginia’s General Fund through April 2020. A detailed breakdown of the financial numbers was given to the House Committee on Appropriations and Senate Committee on Finance and Appropriations on May 18^th and 19^th by Secretary of Finance Aubrey Layne.

Due to the COVID-19/Coronavirus pandemic, the Commonwealth saw dramatic reduction in state revenues for the month of April. Layne told committee members the decrease reflects the Governor’s decision to delay individual and corporate income tax payment deadlines until June 1, 2020.

When comparing Virginia to other states, Layne added the Commonwealth’s economy has sectors that have shown resiliency boosted by individuals who work in industries that allow for remote or telework and those who are employed by the federal government/federal contract workers, especially in Northern Virginia and the Hampton Roads region. 

Additionally, the monetary policy response to the pandemic by the Federal Reserve and stimulus measures passed by Congress have impacted the Virginia economy since March.

Layne informed the committees that the next two-to-three months will provide budget forecasters with better data as they look at the overall impact of the pandemic on the state budget and economy. It is assumed the legislature will return to Richmond at some point during the late summer or early fall for a special session to address the biennium budget. Layne said he could provide a better forecast for the biennium in the next 60-70 days which will assist lawmakers during the special session to adjust the budget.

Key Fiscal numbers from Secretary Layne’s presentation include:

• General Fund (GF) revenues declined by 26.2 percent in April.
• Declines in individual income tax non-withholding – a drop of 61.8% in April and 19.3% on a year-to-date basis – account for most of the April reductions. Some losses will likely be recouped in the coming weeks as payments are made in advance of the deferred June 1 deadline.
• Individual income tax withholding collections for 2020 remain on forecast for 4.7 percent annual growth.
• Sales tax collections in April, which reflect March sales, fell 0.4 percent.
• The $1 billion projected loss in General Funds for FY 2020 appears to be on par with prediction made by Secretary Layne in March when the Governor announced closures of nonessential businesses. 

To view the presentation from this week's hearings click here.

Waivers Extended Until August 31, 2020 by USDA

Today, U.S. Secretary of Agriculture Sonny Perdue has announced the extension of three USDA nutrition waivers until August 31, 2020.

According to the press release the waivers include:

• Non-Congregate Feeding: FNS is allowing meals to be served to children outside of the normally required group setting to support social distancing.
• Parent Pickup: FNS is allowing parents and/or guardians to pick up meals and bring them home to their children.
• Meal Times: FNS is waiving requirements that meals be served at certain standard times to allow for grab-n-go options. This also allows for multiple days-worth of meals to be provided at once.

You can access the press release by following www.fns.usda.gov/news-item/usda-026220

House Unveils Fifth Coronavirus Relief Legislation

Speaker of the United States House of Representatives, Nancy Pelosi, unveiled a fifth Coronavirus relief bill Tuesday. The HEORES Act would appropriate $3 trillion dollars of funding to state and local governments, healthcare systems, a second round of stimulus checks to individuals, and an array of other priorities to combat the economic calamity brought by the COVID-19 pandemic.

The following provisions of interest to public school divisions are included in the legislation unveiled by House leaders:

·         Department of Education: $110.15 billion to support the educational needs of States, school districts, and institutions of higher education in response to the Coronavirus, including:

o   $90 billion for a State Fiscal Stabilization Fund for grants to States to support statewide and local funding for elementary and secondary schools and public postsecondary institutions. This flexible funding can support:

§  Costs associated with making up instructional time, including teacher, school leader, and classified school employee personnel costs;

§  Providing school-based supports for impacted students, families, and staff, including counseling, mental health services, family engagement efforts, and the coordination of physical health services;

§  Costs associated with sanitation and cleaning for schools and school transportation;

§  Professional development for school-based staff on trauma-informed care to restore the learning environment;

§  Purchasing additional technology, including assistive technology, that aids in regular and substantive interactions between students and their classroom instructor;

§  Coordination between State educational agencies and public health departments for emergency planning, response, and recovery; and

§  Authorized activities under education statutes including ESEA, IDEA, McKinney-Vento Homeless Assistance Act, the Adult Education and Family Literacy Act, and the Perkins Act.

·         Broadband: $1.5 billion to close homework gap by providing funding for Wi-Fi hotspots and connected devices for students and library patrons, and $4 billion for home connectivity needs.

·         Child Nutrition: $3 billion in additional funding to provide emergency relief to school meal providers and USDA’s Child and Adult Care Food Program.

·         State Fiscal Relief: $500 billion in funding to assist state governments with the fiscal impacts from the public health emergency caused by the Coronavirus.

·         Local Fiscal Relief: $375 billion in funding to assist local governments with the fiscal impacts from the public health emergency caused by the Coronavirus.

House leaders are aiming for the HEROES Act to be debated and voted on by members of the United States House of Representatives as early as Friday, May 15. If passed by the House, the legislation would need approval by the United States Senate before heading to the President for final action.

The Virginia School Boards Association will continue to monitor the developments surrounding the HEROES Act, as well as, other pertinent information on the Coronavirus pandemic. If you have questions, please contact VSBA Government Relations Specialist, J.T. Kessler, at jason@vsba.org.

State Board of Education- May Meeting

On May 7^th, the Virginia Board of Education (VBOE) met for their scheduled regular business meeting. Video stream of the meeting can be found here. VSBA Government Relations Specialist, J.T. Kessler, attended the virtual meeting to provide school board members with an overview of the topics addressed by the Board.

If you have any questions regarding the proceedings of the May 2020 meeting of the Virginia Board of Education, please contact J.T. Kessler via email at jason@vsba.org.

To view the full report from the May 2020 meeting of the Virginia Board of Education, click here.