August General Fund Revenues Exceed Forecast Released

Governor Glenn Youngkin today announced that general fund revenues are ahead of forecast by $204.8 million year-to-date. Among the major sources, general fund revenues are up 3.0 percent year-to-date after adjusting for policy actions. Compared to August 2022, adjusted general fund revenues demonstrate a strong economic position for Virginia.  

“As we accelerate results in the commonwealth to reduce cost of living and provide transformational investments in our communities, Virginia remains in a strong economic position,” said Governor Glenn Youngkin. “We're encouraged by the results early in this fiscal year and continue to remain intentionally conservative in our forecast to provide an added buffer as we prepare the Commonwealth for future investments and any potential economic downturn in the future.”   

“For the first two months of the fiscal year, collections are ahead of revenue projections assumed in the recently enacted budget, however it is too early to draw conclusions about full-year revenue collections,” said Secretary of Finance Stephen Cummings. “While the economy continues to show resilience even as interest rates have increased significantly over the past year, the risk of further rate hikes, inflation persisting above Fed targets, and other uncertainties including the potential for a federal government shutdown, cause us to remain cautious in our outlook over the near term. The next two months will provide a better indication of Fiscal Year 2024 revenue trends.”  

In Virginia, the unemployment rate fell to 2.5 percent on a seasonally adjusted basis in July and the labor force participation rate increased to 66.7 percent in July – the highest labor force participation rate since November 2012. The number of employed Virginia residents increased by 17,937 to 4,481,008 in July.  

Among the major revenue sources, withholding and sales tax collections are generally in line or ahead of projections, while corporate income tax revenues exceed forecast.   

August is not a significant month for revenue collections, however, with collections mainly from withholding, sales taxes, and other sources that have regular monthly payments. 

The full August 2023 revenue report is available here.  

Virginia General Assembly Adopts Budget Revisions

The Virginia General Assembly convened in Special Session today to address revisions to the 2022-2024 Biennium Budget (HB 6001/SB 6001). Key provisions of the 2022-2024 Biennium Budget revisions pertaining to K-12 education are: 

• Increases state support for public education funding by $645.3 million.
• Provides $418.3 million General Fund (GF) in flexible one-time payments available for use through Fiscal Year (FY) 2026.
• Provides $54.6 million GF for the state share of a 2% salary increase for SOQ funded positions, effective January 1, 2024.
• Includes $152.3 million GF to fund additional support positions and amends ratio from 21 positions per 1,000 ADM to 24 positions per 1,000 ADM.
• Establishes legislative workgroup to review and prioritize JLARC recommendations and develop long-range implementation plan due to the General Assembly by November 1, 2024.
• Provides $20 million ($12.0 million GF & $8.0 million ARPASLFRF) for targeted flexible grants to support school security.
• Provides $6.7 million Non-General Fund (NGF) (ESSER) to support expansion of the Virginia Literacy Act to include grades 4-8. 

To review FY 2024 K-12 School Division Distribution Tables, click here. 

To review the budget presentation provided by House Appropriations staff, click here. 

To review the budget presentation provided by Senate Finance and Appropriations staff, click here. 

VSBA encourages you to consult your division administration and finance staff as to how the revisions to the biennial budget will impact your local operating budgets.

2023 Session of the Virginia General Adjourned Sine Die February 25

The 2023 Session of the Virginia General Assembly adjourned Sine Die on Saturday February 25 with lawmakers adopting a four-page stop-gap measure to revise spending negotiations continue on revisions to the 2022-24 biennial budget. The stop-gap agreement includes funding for local school divisions to receive at least as much revenue in the current budget year as was anticipated before the state discovered an error in the calculation tool for state funding in absence of the grocery tax which was passed by the General Assembly last year.

We anticipate negotiations on revisions to the budget will begin in the near future with a potential Special Session called by Governor Youngkin later this spring. VSBA's Government Relations team will continue to advocate for the association's budget priorities as lawmakers meet to hammer out a final deal.

To View the complete list of legislation tracked by the VSBA Government Relations Team during the 2023 session, click here.

The General Assembly will reconvene on Wednesday, April 12, 2023 to consider legislation that is either amended or vetoed by Governor Youngkin.

HB 1887 Fails to Report from Conference Committee

HB 1887 (Byron), a bill that encourages local school boards and comprehensive communities colleges to enter into local or regional agreements for the establishment and implementation of a competitive compensation structure to recruit and retain adjunct instructors to be jointly compensated by the relevant school boards and colleges to prepare both high school students and college students to earn credit-bearing workforce credentials and noncredit workforce credentials, as that term is defined in relevant law failed to report from a Conference Committee made up of members of the Senate and House. 

Senate, House Reach Stop-Gap Agreement, Skinny Budget

The General Assembly will consider a stop-gap budget bill to buy time for the House of Delegates and Senate to bridge their wide differences over $1 billion in tax cuts that Gov. Glenn Youngkin proposed in revisions to the two-year budget adopted a year ago.

House and Senate budget negotiators regrouped on Saturday after a blowup the previous day about the amount of tax cuts that the Senate would accept and the reduced spending it would require in Democratic priorities.

One of the pieces of the stopgap bill is money to compensate for a $201 million mistake in the amount of money the Department of Education estimated local school divisions that they would get from the budget adopted in June. 

The budget itself did not include the mistake, but school divisions based their current year budgets on the department estimates.The Senate version of the budget shifted $58.1 million to cover the estimated gap in the current year, but the House budget included $5 million and relied on additional sales tax revenues to make up the difference. “We’re going to make everybody whole and then some,” House Appropriations Chair Barry Knight said.

Source: Richmond Times-Dispatch

*DEVELOPING*

SB 1052 Conference Report Released

Senate and House Conferees have released the committee report for SB 1052 (McPike). To view the conference report, click here.

The Senate has approved the Conference Report by a vote of 40-0. We are awaiting action by the House of Delegates on the Conference Report.

Update 2/25/23 3:52 p.m.

The House of Delegates has adopted the Conference Report by a vote of 93-0. The legislation now heads to Governor Youngkin's desk where he can sign, amend, or veto the bill.

SB 1300 Conference Report Released

Senate and House Conferees have released the committee's report for SB 1300 (Deeds) a bill that deals with requirements for public primary and secondary school teachers; annual trauma-informed care training program. The Conference Report can be viewed by clicking here.

The Senate has accepted the report of the committee by a vote of 40-0. We are awaiting action by the House of Delegates on this matter.

Update 2/25/23 3:54 p.m.

The House of Delegates adopted the Conference Report by a vote of 90-0. The legislation now heads to Governor Youngkin's desk where he can sign, amend, or veto the bill.