Budget Update

Today the House Appropriations and Senate Finance Committees released the details of their amendments to the biennial budget. We are pleased to see that the House and Senate have continued to protect public education from additional cuts or program reductions, similar to Governor McAuliffe’s December budget release. There are several differences between the two budgets, specifically with program funding, which will need to be worked out by the budget conferees in the coming weeks. Below is an overview of both the House and Senate budget amendments.

• Both the House and Senate included additional funds, over the $150 million proposed by the governor, to pay down the deferred contribution portion of the unfunded liability in the teacher retirement account. The House included $190million and the Senate included $187.2 million. This pay-down will lower the teacher retirement rate by 43 basis points, from 14.50% to 14.07%. As a result of these payments, both the state and local school divisions will see a positive impact on their budgets.
• The House included $55 million for instructional and support positions for the state’s share of a 1.5% salary increase for funded SOQ instructional and support positions. Although state funding is calculated based on 11 months of the year, the local required match is based on a 1.5% increase with an effective date of no later than January 1, 2016. Divisions must certify that a minimum 1.5% increase will be provided to employees by this date. The amendment also specifies that in meeting the salary increase to be eligible for this incentive funding, school divisions may not include any increase that were provided in FY ’16 to offset the cost of required member contributions to VRS. Further, this funding allocation is contingent on the state revenue forecast performance.  The Senate included $50.2 million for the state’s share of a 1.5% salary increase for funded SOQ and instructional support positions. This funding is calculated based on 10 months of the year. Local school divisions have the flexibility to determine the specific effective date no later than January 1, 2016.
• The House included $1 million to support the statewide expansion of the Virginia Kindergarten Readiness Program (VKRP). This assessment focuses on assessing kindergarteners in the fall to determine their social skills and self-regulation as well as math and literacy skills which are currently being assessed using the PALS test.
•  The Senate included $7.7 million for incentive funding for extended school year programs to improve student achievement.
•  The House included $366,000 to assist local school divisions for the professional development of teachers and principals on the subject of high-needs student issues and $300,000 to support the expansion of Virtual Virginia.
•  The House included $100,000 to the Department of Education for professional development and training of local school board members pursuant to the passage of HB1962.

Both the House and Senate included budget language on several items relating to public education including school breakfast, educational technology, and VPI. 

• The House included language that directs the Department of Education to work with local school divisions on educational technology capital equipment purchases to ensure maximum flexibility with VPSA funds. The Senate also included language related to VPSA technology grants that directs the Department of Education to assess the extent of local interest in using education technology grants for lease expenditures if allowable sources of funding were available for such expenditures. 
• The House provided language that gives flexibility to school divisions to utilize the First Lady’s breakfast amendment funding to pilot a “Breakfast After the Bell” program for elementary students or expand their current school breakfast programs to offer additional meals to all grade levels. The Senate included different language about the First Lady’s breakfast amendment. Their language limits the $537,297 in incentive funding for “Breakfast After the Bell” programs to only elementary schools where student eligibility for free and reduced lunch is greater than 45% for a pilot in 2015-2016 school year. Additionally, schools will be required to evaluate and submit a report on the impact of the pilot to the Department of Education. 
• The Senate included budget language creating the Joint Subcommittee on Virginia Preschool Initiative (VPI) Reform which will be comprised of members from the Education Subcommittees of the House Appropriations and Senate Finance Committees. The Joint Subcommittee will provide recommendations to increase accountability, flexibility, innovation, and facilitate partnerships between schools and Virginia’s private providers to ensure effective financing and policy solutions for VPI.

You can view the full remarks of the Senate Finance Education subcommittee chairman, Senator Tommy Norment, here and the remarks from Delegate Jimmie Massie, chairman of the House Appropriations Elementary and Secondary Education subcommittee, here. VSBA will continue to keep you updated as the budget process moves forward.