SENATE BILL NO. 5020 Offered August 28, 2006 A BILL to amend Chapter 3 of the 2006 Acts of Assembly, Special Session 1, relating to the appropriation of funds for the two years ending respectively on the thirtieth day of June 2007 and the thirtieth day of June 2008. ---------- Patron-- Chichester ---------- Referred to Committee on Finance ----------

Be it enacted by the General Assembly of Virginia:

1. §1. That Item 135 and § 4-13.00 of Chapter 3 of the 2006 Acts of Assembly, Special Session I, be hereby amended and reenacted.

 

A. The balances of appropriations made by previous acts of the General Assembly which are recorded as unexpended, as of the close of business on the last day of the previous biennium, on the final records of the State Comptroller; and

 

B. The public taxes and arrears of taxes, as well as moneys derived from all other sources, which shall come into the state treasury prior to the close of business on the last day of the current biennium. The term "moneys" means nontax revenues of all kinds, including but not limited to fees, licenses, services and contract charges, gifts, grants, and donations, and projected revenues derived from proposed legislation contingent upon General Assembly passage.

 

§ 2. Such balances, public taxes, arrears of taxes, and monies derived from all other sources as are not segregated by law to other funds, which funds are defined by the State Comptroller, pursuant to § 2.2-803, Code of Virginia, shall establish and constitute the general fund of the state treasury.

 

§ 3. The appropriations made in this act from the general fund are based upon the following:

 

 

                                 First Year     Second Year           Total Unreserved Balance, June 30, 2006                $1,406,018,468              $0  $1,406,018,468 Additions to Balance           $134,002,852         $47,000    $134,049,852 Official Revenue Estimates  $15,453,255,934 $16,234,694,890 $31,687,950,824 Lottery Proceeds Fund          $426,100,000    $426,100,000    $852,200,000 Transfers                      $372,445,281    $360,111,243    $732,556,524 Total General Fund Resources Available for Appropriation $17,791,822,535 $17,020,953,133 $34,812,775,668  

The appropriations made in this act from nongeneral fund revenues are based upon the following:

 

                                 First Year     Second Year           Total Balance, June 30, 2006       $2,538,258,284              $0  $2,538,258,284 Official Revenue Estimates  $18,153,574,015 $18,594,216,663 $36,747,790,678 Bond Proceeds                  $809,454,000              $0    $809,454,000 Total Nongeneral Fund Revenues Available for Appropriation $21,501,286,299 $18,594,216,663 $40,095,502,962 TOTAL PROJECTED REVENUES    $39,293,108,834 $35,615,169,796 $74,908,278,630

 

§ 4. Nongeneral fund revenues which are not otherwise segregated pursuant to this act shall be segregated in accordance with the acts respectively establishing them.

 

§ 5. The sums herein appropriated are appropriated from the fund sources designated in the respective items of this act.

 

§ 6. When used in this act the term:

 

A. "Current biennium" means the period from the first day of July two thousand six, through the thirtieth day of June two thousand eight, inclusive.

 

B. "Previous biennium" means the period from the first day of July two thousand four, through the thirtieth day of June two thousand six, inclusive.

 

C. "Next biennium" means the period from the first day of July two thousand eight, through the thirtieth day of June two thousand ten, inclusive.

 

D. "State agency" means a court, department, institution, office, board, council or other unit of state government located in the legislative, judicial, or executive departments or group of independent agencies, or central appropriations, as shown in this act, and which is designated in this act by title and a three-digit agency code.

 

E. "Nonstate agency" means an organization or entity as defined in § 2.2-1505 C, Code of Virginia.

 

F. "Authority" sets forth the general enabling statute, either state or federal, for the operation of the program for which appropriations are shown.

 

G. "Discretionary" means there is no continuing statutory authority which infers or requires state funding for programs for which the appropriations are shown.

 

H. "Appropriation" shall include both the funds authorized for expenditure and the corresponding level of full-time equivalent employment.

 

I. "Sum sufficient" identifies an appropriation for which the Governor is authorized to exceed the amount shown in the Appropriation Act if required to carry out the purpose for which the appropriation is made.

 

J. "Item Details" indicates that, except as provided in § 6 H above, the numbers shown under the columns labeled Item Details are for information reference only.

 

K. Unless otherwise defined, terms used in this act dealing with budgeting, planning and related management actions are defined in the instructions for preparation of the Executive Budget.

 

§ 7. The total appropriations from all sources in this act have been allocated as follows:

 

BIENNIUM 2006-08

 

                  General Fund   Nongeneral Fund             Total OPERATING EXPENSES       $33,761,544,114   $36,893,215,804   $70,654,759,918                $33,695,469,760                     $70,588,685,564   LEGISLATIVE DEPARTMENT        $119,250,065        $6,617,524      $125,867,589   JUDICIAL DEPARTMENT        $696,499,354       $46,852,214      $743,371,568                                                       $743,351,568   EXECUTIVE DEPARTMENT     $32,908,466,355   $36,175,799,547   $69,084,265,902                $32,842,392,001                     $69,018,191,548   INDEPENDENT AGENCIES              $613,570      $663,946,519      $664,560,089   STATE GRANTS TO NONSTATE AGENCIES  $36,714,770                $0       $36,714,770   CAPITAL OUTLAY EXPENSES        $1,020,708,398    $1,329,086,000    $2,349,794,398   TOTAL          $34,782,252,512   $38,222,301,804   $73,004,554,316                $34,716,178,158                     $72,938,479,962

 

§ 8. This chapter shall be known and may be cited as the "2006 Appropriation Act."

 

PART 1: OPERATING EXPENSES

 

Items 1 through 133:  Not Set Out

 

Direct Aid to Public Education (197)

 

134. Not Set Out

 

                                                      Appropriations ($)                                                  First Year      Second Year                                                    FY2007           FY2008   135. State Education Assistance
      Programs (17800)..............            $5,874,587,186   $6,040,403,642                                                                 $5,974,329,288                                             Item Details ($)                                    First Year       Second Year                                       FY2007            FY2008   Standards of Quality for
 Public Education (SOQ) (17801).. $4,874,555,768   $4,988,881,662                                  $4,814,718,647   $4,922,538,469   Financial Incentive Programs for Public Education (17802)....   $394,871,386     $458,507,392                                    $454,708,507     $458,776,231   Financial Assistance for Categorical Programs (17803)....   $135,060,037     $139,414,584   Financial Assistance for School Facilities (17804).......   $470,099,995     $453,600,004   Fund Sources: General................ $5,692,872,032   $5,857,392,925                                                   $5,791,318,571          Special................       $795,000         $795,000          Commonwealth           Transportation........     $2,173,000       $2,173,000          Trust and Agency.......   $178,747,154     $180,042,717

 

Authority: Standards of Quality for Public Education (SOQ) (17801): Article VIII, Section 2, Constitution of Virginia; Chapter 667, Acts of Assembly, 1980; §§ 22.1-176 through 22.1-198, 22.1-199.1, 22.1-199.2, 22.1-213 through 22.1-221, 22.1-227 through 22.1-237, 22.1-253.13:1 through 22.1-253.13:8, 22.1-254.01, Code of Virginia; Title 51.1, Chapters 1, 5, 6.2, 7, and 14, Code of Virginia; P.L. 91-230, as amended; P.L. 93-380, as amended; P.L. 94-142, as amended; P.L. 98-524, as amended, Federal Code.

 

Financial Incentive Programs for Public Education (17802): §§ 22.1-24, 22.1-289.1 through 22.1-318, Code of Virginia; P.L. 79-396, as amended; P.L. 89-10, as amended; P.L. 89-642, as amended; P.L. 108-265, as amended; Title II P.L. 99-159, as amended, Federal Code.

 

Financial Assistance for Categorical Programs (17803): Discretionary Inclusion; Treaty of 1677 between Virginia and the Indians; §§ 22.1-3.4, 22.1-101, 22.1-108, 22.1-199 through 22.1-212.2:3, 22.1-213 through 22.1-221, 22.1-223 through 22.1-237, 22.1-254, Code of Virginia; P.L. 89-10, as amended; P.L. 91-230, as amended; P.L. 93-380, as amended; P.L. 94-142, as amended; P.L. 94-588; P.L. 95-561, as amended; P.L. 98-211, as amended; P.L. 98-524, as amended; P.L. 99-570; P.L. 100-297, as amended; P.L. 102-73, as amended; P.L. 105-220, as amended, Federal Code. 

 

Financial Assistance for School Facilities (17804): §§ 58.1-638, 58.1-638.1, and 58.1-4022, Code of Virginia.

 

                                     FY 2007           FY 2008
   Appropriation Detail of Education Assistance Programs
   Standards of Quality    Basic Aid                     $2,640,297,191     $2,647,385,004                                  $2,717,389,649     $2,732,531,811    Sales Tax                     $1,266,460,000     $1,336,490,000                                  $1,129,300,000     $1,185,000,000    Textbooks                        $67,593,217        $68,134,752    Vocational Education             $60,840,443        $61,254,506    Gifted Education                 $27,849,475        $28,076,756    Special Education               $339,870,343       $342,288,447    Prevention, Intervention, and      Remediation                    $42,247,088        $42,269,828    VRS Retirement                  $201,587,759       $226,274,179    Social Security                 $159,166,915       $160,460,601    Group Life                        $9,375,082         $9,448,789    English as a Second Language     $31,781,077        $38,469,856    Remedial Summer School           $24,659,975        $25,496,999 Total                            $4,871,728,565     $4,986,049,717                                  $4,811,661,023     $4,919,706,524 Incentive Programs    Alternative Education             $6,221,723         $6,504,714    At-Risk                          $63,194,052        $63,097,129    At-Risk Four Year Olds           $49,576,541        $50,533,199    Compensation Supplements         $74,944,039       $129,855,748    Early Reading Intervention       $11,863,527        $11,965,287    Enrollment Loss                   $7,757,404         $7,945,316                                      $7,977,424         $8,202,666    Governor’s School                $12,344,132        $12,639,912    ISAEP                             $2,247,581         $2,247,581    Mentor Teacher                    $1,475,000         $1,475,000    No Child Left Behind/      Education for a Lifetime        $8,155,889         $7,853,362    K-3 Class Size Reduction         $83,617,596        $84,407,590    Project Graduation                $2,774,478         $2,774,478    School Breakfast                    $892,020           $892,020    SOL Algebra Readiness             $8,444,986         $8,476,044    Special Education – Inservice       $600,000           $600,000    Special Education –      Regional Tuition               $59,989,862        $66,397,321    Special Education – Voc Ed          $200,089           $200,089    Supplemental Basic Aid              $530,783           $528,746                                        $541,184           $540,235    Supplemental Sales Tax           $59,837,121                 $0 Total                              $394,829,702       $458,393,536                                    $454,897,244       $458,662,375
 
  Categorical Programs    Adult Education                   $1,051,800         $1,051,800    Adult Literacy                    $2,655,000         $2,655,000    Electronic Classroom              $2,256,908         $2,256,908    Foster Care                      $11,109,888        $12,047,112    American Indian      Treaty Commitment                  $53,805            $53,805    School Lunch                      $5,801,932         $5,801,932    Special Education – Homebound     $6,504,072         $7,171,223    Special Education – Jails         $2,868,499         $2,954,553    Special Education –      State Operated Programs        $29,593,951        $30,962,505    Vocational Education -      Categorical                    $10,400,829        $10,400,829    Debt Service on VPSA      Equipment Notes                $62,763,354        $64,058,916 Total                              $135,060,036       $139,414,583
 
  School Facilities    Lottery                         $442,600,000       $426,100,000    School Construction              $27,499,995        $27,500,004 Total                              $470,099,995       $453,600,004
 
 

Note: The above distributions do not include projected VPSA Technology Grants.

 

Payments out of the above amounts shall be subject to the following conditions:

 

A. Definitions

 

1. "March 31 Average Daily Membership," or "March 31 ADM" - The responsible school division’s average daily membership for grades K-12 including (1) handicapped students ages 5-21 and (2) students for whom English is a second language who entered school for the first time after reaching their twelfth birthday, and who have not reached twenty-two years of age on or before August 1 of the school year, for the first seven (7) months (or equivalent period) of the school year through March 31 in which state funds are distributed from this appropriation. Preschool and postgraduate students shall not be included in March 31 ADM.

 

a. School divisions shall take a count of September 30 fall membership and report this information to the Department of Education no later than October 15 of each year.

 

b. Except as otherwise provided herein, by statute, or by precedent, all appropriations to the Department of Education shall be calculated using March 31 ADM unadjusted for half-day kindergarten programs, estimated at 1,196,914 the first year and 1,208,149 the second year.

 

c. March 31 ADM adjusted for half-day kindergarten at 85 percent of March 31 ADM, is estimated at  1,196,176 the first year and  1,207,361 the second year.

 

d. Students who are either (i) enrolled in a nonpublic school or (ii) receiving home instruction pursuant to § 22.1-254.1 and who are enrolled in a public school on less than a full-time basis in any mathematics, science, English, history, social science, vocational education, health education or physical education, fine arts or foreign language course shall be counted in the funded fall membership and March 31 ADM of the relevant school division. Each course shall be counted as 0.25, up to a cap of 0.5 of a student.

 

e. Students enrolled in an Individualized Student Alternative Education Program (ISAEP) pursuant to § 22.1-254D. shall be counted in the March 31 Average Daily Membership of the relevant school division. School divisions shall report these students separately in their March 31 reports of Average Daily Membership.

 

2. "Standards of Quality" - Operations standards for grades kindergarten through 12 as prescribed by the Board of Education subject to revision by the General Assembly.

 

3.a. "Basic Operation Cost" - The cost per pupil, including provision for the number of instructional personnel required by the Standards of Quality for each school division with a minimum ratio of 51 professional personnel for each 1,000 pupils or proportionate number thereof, in March 31 ADM for the same fiscal year for which the costs are computed, and including provision for driver, gifted, occupational-vocational, and special education, library materials and other teaching materials, teacher sick leave, general administration, division superintendents' salaries, free textbooks (including those for free and reduced price lunch pupils), school nurses, operation and maintenance of school plant, transportation of pupils, instructional television, professional and staff improvement, remedial work, fixed charges and other costs in programs not funded by other state and/or federal aid.

 

b. The amount resulting from the support cost calculation for school nurses shall be specifically identified as such and reported to school divisions annually.  School divisions will allocate these funds for school nurse positions or for contracted services of health professionals providing health services.

 

4.a. "Composite Index of Local Ability-to-Pay" - An index figure computed for each locality. The composite index is the sum of 2/3 of the index of wealth per pupil in unadjusted March 31 ADM reported for the first seven (7) months of the 2003-2004 school year and 1/3 of the index of wealth per capita (population estimates for 2003 as determined by the Center for Public Service of the University of Virginia) multiplied by the local nominal share of the costs of the Standards of Quality of 0.45 in each year. The indices of wealth are determined by combining the following constituent index elements with the indicated weighting: (1) true values of real estate and public service corporations as reported by the State Department of Taxation for the calendar year 2003 - 50 percent; (2) adjusted gross income for the calendar year 2003 as reported by the State Department of Taxation - 40 percent; (3) the sales for the calendar year 2003 which are subject to the state general sales and use tax, as reported by the State Department of Taxation - 10 percent. Each constituent index element for a locality is its sum per March 31 ADM, or per capita, expressed as a percentage of the state average per March 31 ADM, or per capita, for the same element. A locality whose composite index exceeds 0.8000 shall be considered as having an index of 0.8000 for purposes of distributing all payments based on the composite index of local ability-to-pay. Each constituent index element for a locality used to determine the composite index of local ability-to-pay for the current biennium shall be the latest available data for the specified official base year provided to the Department of Education by the responsible source agencies no later than November 15, 2005.

 

b. Each locality whose total Virginia Adjusted Gross Income is comprised of at least 3 percent or more which is accounted for by nonresidents of Virginia may elect at its option to exclude such nonresident income in computing the composite index of ability-to-pay. Each locality which elects this option must have certified its intention to do so to the Department of Education on or before January 1, 2006. The Department of Education shall compute the composite index for such localities by using adjusted gross income data which exclude nonresident income, but shall not adjust the composite index of any other localities. The Department of Taxation shall furnish to the Department of Education such data as are necessary to implement this provision.

 

c.1) Pursuant to § 15.2-1302, Code of Virginia, and in the event that two or more school divisions become one school division, whether by consolidation of only the school divisions or by consolidation of the local governments, such resulting division shall be paid Standard of Quality payments for all pupils in the combined division on the basis of a composite index determined by the Board of Education, which shall not be less than the lowest nor higher than the highest composite index of any of the individual school divisions involved in such consolidation. In the event of a consolidation of local governments, this index shall remain in effect for a period of fifteen years, unless a lower composite index is calculated for the combined division through the process for computing an index figure as set forth above. The Governor shall approve the composite index determined by the Board of Education prior to disbursement of funds under such index. The Department shall annually report to the Chairmen of the House Appropriations and Senate Finance Committees the composite indices approved by the Governor and the Board under this provision.

 

2) In the case of the consolidation of Clifton Forge and Alleghany County school divisions, the fifteen year period for the application of a new composite index pursuant to paragraph b.1) above shall apply beginning with the fiscal year that starts on July 1, 2004.

 

3) Pursuant to paragraph c.1) above, if the composite index of a consolidated school division is reduced during the course of the fifteen year period to a level that would entitle the school division to a lower interest rate for a Literary Fund loan than it received when the loan was originally released, the Board of Education shall reduce the interest rate of such loan for the remainder of the period of the loan. Such reduction shall be based on the interest rate that would apply at the time of such adjustment. This rate shall remain in effect for the duration of the loan and shall apply only to those years remaining to be paid.

 

d. When it is determined that a substantial error exists in a constituent index element, the Department of Education will make adjustments in funding for the current school year only in the division where the error occurred. The composite index of any other locality shall not be changed as a result of the adjustment. No adjustment during the biennium will be made as a result of updating of data used in a constituent index element.

 

e. In the event that any school division consolidates two or more small schools, the division shall continue to receive Standards of Quality funding and provide for the required local expenditure for a period of five years as if the schools had not been consolidated. Small schools are defined as any elementary, middle, or high school with enrollment below 200, 300 and 400 students, respectively.

 

5. "Required Local Expenditure for the Standards of Quality" - The locality's share based on the composite index of local ability-to-pay of the cost required by all the Standards of Quality minus its estimated revenues from the state sales and use tax dedicated to public education and those sales tax revenues transferred to the general fund from the Public Education Standards of Quality/Local Real Estate Property Tax Relief Fund and appropriated in this Item, both of which are returned on the basis of the triennial census of school age population, as specified in this item, collected by the Department of Education and distributed to school divisions in the fiscal year in which the school year begins.

 

6. "Required Local Match" - The locality's required share of program cost based on the composite index of local ability-to-pay for all School Facilities and Incentive programs, where required, in which the school division has elected to participate in a fiscal year.

 

7. "Planning District Eight"--The nine localities which comprise Planning District Eight are Arlington County, Fairfax County, Loudoun County, Prince William County, Alexandria City, Fairfax City, Falls Church City, Manassas City, and Manassas Park City.

 

8. "State Share for the Standards of Quality" - The state share for a locality shall be equal to the cost for that locality less the locality's estimated revenues from the state sales and use tax dedicated to public education and those sales tax revenues transferred to the general fund from the Public Education Standards of Quality/Local Real Estate Property Tax Relief Fund and appropriated in this Item, both of which are returned on the basis of the triennial census of school age population, as specified in this item, collected by the Department of Education and distributed to school divisions in the fiscal year in which the school year begins and less the required local expenditure.

 

9. In the event that the appropriations in Item 134 and Item 135 are not sufficient to meet the entitlements payable to school divisions pursuant to the provisions of each item, the Department of Education is authorized to transfer any available funds between these items to address such insufficiencies. If the total appropriations after such transfers remain insufficient to meet the entitlements of any program, the Department of Education is authorized to prorate such shortfall proportionately across all of the school divisions participating in the program where such shortfall occurred.

 

B. General Conditions

 

1. The Standards of Quality cost in this Item related to fringe benefits shall be limited for instructional staff members to the employer's cost for a number not exceeding the number of instructional positions required by the Standards of Quality for each school division and for their salaries at the statewide prevailing salary levels as printed below.

 

 

       Instructional Position       First Year Salary   Second Year Salary      Elementary Teachers               $39,681             $39,681      Elementary Assistant Principals   $55,827             $55,827      Elementary Principals             $68,822             $68,822      Secondary Teachers                $41,615             $41,615      Secondary Assistant Principals    $59,784             $59,784      Secondary Principals              $75,268             $75,268      Aides                             $13,828             $13,828
 
 

a.1) Payment by the state to a local school division shall be based on the state share of fringe benefit costs of 55 percent of the employer's cost distributed on the basis of the composite index.

 

2) A locality whose composite index exceeds 0.8000 shall be considered as having an index of 0.8000 for purposes of distributing fringe benefit funds under this provision.

 

3) The state payment to each school division for retirement, social security, and group life insurance costs for noninstructional personnel is included in and distributed through Basic Aid.

 

b. Payments to school divisions from this item shall be calculated using March 31 Average Daily Membership adjusted for half-day kindergarten programs.

 

c. Payments for health insurance fringe benefits are included in and distributed through Basic Aid.

 

2. Each locality shall offer a school program for all its eligible pupils which is acceptable to the Department of Education as conforming to the Standards of Quality program requirements.

 

3. In the event the statewide number of pupils in March 31 ADM exceeds the number estimated as the basis for this appropriation, the locality's state share of the Basic Operation Cost and the required local share shall be reduced proportionately so that this appropriation will not be exceeded.

 

4. The Department of Education shall make equitable adjustments in the computation of indices of wealth and in other state-funded accounts for localities affected by annexation, unless a court of competent jurisdiction makes such adjustments. However, only the indices of wealth and other state-funded accounts of localities party to the annexation will be adjusted.

 

5. In the event that the actual revenues from the state sales and use tax dedicated to public education and those sales tax revenues transferred to the general fund from the Public Education Standards of Quality/Local Real Estate Property Tax Relief Fund and appropriated in this Item (both of which are returned on the basis of the 2005 triennial census of school age population) for sales in the fiscal year in which the school year begins are different from the number estimated as the basis for this appropriation, the estimated revenues shall not be adjusted.

 

6. This appropriation shall be apportioned to the public schools with guidelines established by the Department of Education consistent with legislative intent as expressed in this act.

 

7.a. Appropriations of state funds in this Item include the number of positions required by the Standards of Quality. This Item includes a minimum of 51 professional instructional positions and aide positions (C 2); Education of the Gifted, 1.0 professional instructional position (C 3); Occupational-Vocational Education Payments and Special Education Payments; a minimum of 6.0 professional instructional positions and aide positions (C 4 and C 5) for each 1,000 pupils in March 31 ADM each year in support of the current Standards of Quality. Funding in support of one hour of additional instruction per day based on the percent of students eligible for the federal free lunch program with a pupil-teacher ratio range of 18:1 to 10:1, depending upon a school division's combined failure rate on the English and Math Standards of Learning, is included in Remedial Education Payments (C8).

 

b. No actions provided in this section signify any intent of the General Assembly to mandate an increase in the number of instructional personnel per 1,000 students above the numbers explicitly stated in the preceding paragraph.

 

c. Appropriations in this item include programs supported in part by transfers to the general fund from the Public Education Standards of Quality/Local Real Estate Property Tax Relief Fund pursuant to Part 3 of this Act. These transfers combined together with other appropriations from the general fund in this item funds the state's share of the following revisions to the Standards of Quality pursuant to Chapters 939 & 955 of the Acts of Assembly of 2004: five elementary resource teachers per 1,000 students; one support technology position per 1,000 students; one instructional technology position per 1,000 students; and a full daily planning period for teachers at the middle and high school levels in order to relieve the financial pressure these education programs place on local real estate taxes.

 

8.a. The Department of Education shall make calculations at the start of the school year to ensure that school divisions have appropriated adequate funds to support their estimated required local expenditure. The Department of Education shall also make calculations after the close of the school year to verify that the required local effort level, based on actual March 31 Average Daily Membership, was met. The Department of Education shall specify the calculations to determine if a school division has appropriated and expended its required local expenditure for the Standards of Quality. This calculation may include but is not limited to the following calculations:

 

b. The total expenditures for operation, defined as total expenditures less all capital outlays, expenditures for debt service, facilities, non-regular day school programs (such as adult education, preschool, and non-local education programs), and any transfers to regional programs or escrow accounts will be calculated.

 

c. The following state funds will be deducted from the amount calculated in paragraph a. above: revenues from the state sales and use tax (returned on the basis of the 2005 triennial census of school age population as specified in this item) for sales in the fiscal year in which the school year begins; total receipts from state funds (except state funds for non-regular day school programs and state funds used for capital or debt service purposes); and the state share of any balances carried forward from the previous fiscal year. Any qualifying state funds that remain unspent at the end of the fiscal year will be added to the amount calculated in paragraph a. above.

 

d. The following federal funds will also be deducted from the amount calculated in paragraph a. above: total receipts from federal funds (except federal funds for non-regular school programs, Impact Aid funds CFDA 84.040 and 84.041 and Forest Reserve,) and any federal funds carried forward from the previous fiscal year. Any federal funds that remain unspent at the end of the fiscal year and any capital expenditures paid from federal funds will be added to the amount calculated in paragraph a. above.

 

e. Tuition receipts and receipts from payments from other cities or counties will also be deducted from the amount calculated in paragraph a., then

 

f. The final amount calculated as described above must be equal to or greater than the required local expenditure defined in paragraph A. 5.

 

g. The Department of Education shall collect the data necessary to perform the calculations of required local expenditure as required by this section.

 

h. A locality whose expenditure in fact exceeds the required amount from local funds may not reduce its expenditures unless it first complies with all of the Standards of Quality.

 

9.a. Any sum which a locality, as of the end of a school year, has not expended, pursuant to this Item, for the Standards of Quality shall be paid by the locality into the general fund of the state treasury. Such payments shall be made not later than the end of the school year following that in which the under expenditure occurs.

 

b. Whenever the Department of Education has recovered funds as defined in the preceding paragraph a, the Secretary of Education is authorized to repay to the locality affected by that action, seventy-five percent (75%) of those funds upon his determination that:

 

1) The local school board agrees to include the funds in its June 30 ending balance for the year following that in which the under expenditure occurs;

 

2) The local governing body agrees to reappropriate the funds as a supplemental appropriation to the approved budget for the second year following that in which the under expenditure occurs, in an appropriate category as requested by the local school board, for the direct benefit of the students;

 

3) The local school board agrees to expend these funds, over and above the funds required to meet the required local expenditure for the second year following that in which the under expenditure occurs, for a special project, the details of which must be furnished to the Department of Education for review and approval;

 

4) The local school board agrees to submit periodic reports to the Department of Education on the use of funds provided through this project award; and

 

5) The local governing body and the local school board agree that the project award will be cancelled and the funds withdrawn if the above conditions have not been met as of June 30 of the second year following that in which the under expenditure occurs.

c. There is hereby appropriated, for the purposes of the foregoing repayment, a sum sufficient, not to exceed 75 percent of the funds deposited in the general fund pursuant to the preceding paragraph a.

 

10. The Department of Education shall specify the manner for collecting the required information and the method for determining if a school division has appropriated and expended the local funds required to support the actual local match based on all School Facilities and Incentive programs in which the school division has elected to participate. Unless specifically stated otherwise in this Item, school divisions electing to participate in any School Facilities or Incentive program that requires a local funding match in order to receive state funding, shall certify to the Department of Education its intent to participate in each program by September October 1 of each fiscal year in a manner prescribed by the Department of Education.  Upon receipt of the certifications, the Department of Education shall make calculations to ensure that school divisions have appropriated adequate local funds, above the required local effort for the Standards of Quality, to support the projected required local match based on the School Facilities and Incentive programs in which the school division has elected to participate.  If the Department of Education’s calculations indicate that insufficient local funds are appropriated to meet the required local funding match for one or more programs, state funding for such program(s) shall not be made until such time that the school division can certify that sufficient local funding has been appropriated to meet required local match.  The Department of Education shall also make calculations after the close of the fiscal year to verify that the required local match was met based on the state funds that were received.

 

11. Beginning in fiscal year 2008, any sum which a locality has not expended as of the end of a fiscal year in support of the required local match pursuant to this Item shall be paid by the locality into the general fund of the state treasury unless the carryover of those unspent funds is specifically permitted by other provisions of this act. Such payments shall be made no later than the end of the school year following that in which the under expenditure occurred.

 

12. The Superintendent of Public Instruction shall provide a report on the status of teacher salaries, by local school division, to the Governor and the Chairmen of the Senate Finance and House Appropriations Committees by December 1 of each year of the biennium.

 

13. All local matching funds required by the programs in this Item shall be appropriated to the budget of the local school board.

 

14. By November 15 of each year, the Department of Planning and Budget, in cooperation with the Department of Education, shall prepare and submit a preliminary forecast of Standards of Quality expenditures, based upon the most current data available, to the Chairmen of the House Appropriations and Senate Finance Committees. In odd-numbered years, the forecast for the current and subsequent two fiscal years shall be provided. In even-numbered years, the forecast for the current and subsequent fiscal year shall be provided. The forecast shall detail the projected March 31 Average Daily Membership and the resulting impact on the education budget.

 

15. School divisions may choose to use state payments provided for Standards of Quality prevention, intervention, and remediation in both years as a block grant for remediation purposes, without restrictions or reporting requirements, other than reporting necessary as a basis for determining funding for the program.

 

16. Except as otherwise provided in this act, the Superintendent of Public Instruction shall provide guidelines for the distribution and expenditure of general fund appropriations and such additional federal, private and other funds as may be made available to aid in the establishment and maintenance of the public schools.

 

17. At the Department of Education's option, fees for audio-visual services may be deducted from state aid payments for individual local school divisions.

 

18. For distributions not otherwise specified, the Department of Education, at its option, may use prior year data to calculate actual disbursements to individual localities.

 

19. Payments for accounts related to the Standards of Quality made to localities for public education from the general fund, as provided herein, shall be payable in twenty-four approximately equal bimonthly installments at the middle and end of each month.

 

20. The Department of Education shall, for purposes of calculating the state and local shares of the Standards of Quality, apportion state sales and use tax dedicated to public education and those sales tax revenues transferred to the general fund from the Public Education Standards of Quality/Local Real Estate Property Tax Relief Fund based on the 2005 triennial census of school age population in each year of the biennium. 

 

The State Comptroller shall distribute the state sales and use tax revenues dedicated to public education and those sales tax revenues transferred to the general fund from the Public Education Standards of Quality/Local Real Estate Property Tax Relief Fund based on the 2005 triennial census of school age population in each year of the biennium.

 

21. The Department of Education shall convene a technical work group to include appropriate staff of the Department of Planning and Budget, the Senate Finance and House Appropriations Committees, and the Joint Legislative and Audit Review Commission.  The group shall: 1) study re-benchmarking cost trends and drivers; 2) review existing Standards of Quality (SOQ), incentive, categorical, and school facilities funding streams within Direct Aid to Public Education, as well as the Literary Fund, and identify options for efficiencies and cost savings and for greater funding flexibility, especially to better prepare the state and localities for future economic downturns; 3) consider alternatives to across-the-board compensation supplements to better target state funds; 4) review funding streams for programs for students at-risk of academic failure, and assess whether such programs should be incorporated into the SOQ; and 5) examine special education funding issues.

 

The technical work group shall provide to the Governor and the Chairmen of the House Appropriations and Senate Finance Committees: a) a detailed project workplan no later than August 1, 2006, and b) a summary of their work by September 15, 2007.

 

C. Apportionment

 

1. Subject to the conditions stated in this paragraph and in paragraph B of this Item, each locality shall receive sums as listed above within this program for the basic operation cost and payments in addition to that cost. The apportionment herein directed shall be inclusive of, and without further payment by reason of, state funds for library and other teaching materials.

 

2. School Employee Retirement Contributions

 

a. This Item provides funds to each local school board for the state share of the employer's retirement cost incurred by it, on behalf of instructional personnel, for subsequent transfer to the retirement allowance account as provided by Title 51.1, Chapter 1, Code of Virginia.

 

b. Notwithstanding § 51.1-1401 of the Code of Virginia, the Commonwealth shall provide payments for only the state share of the Standards of Quality fringe benefit cost of the retiree health care credit. This item includes payments in both years based on the state share of fringe benefit costs of 55 percent of the employer’s cost on funded Standards of Quality instructional positions, distributed based on the composite index of the local ability-to-pay.

 

c. As a part of the review of the Virginia Retirement System pursuant to House Joint Resolution No. 34 the joint subcommittee shall review: 1) the Commonwealth's responsibilities for funding the teacher retirement system beyond the actuarial normal rate and 2) the Commonwealth's appropriate share for retirement payments by school divisions. In making this review, the joint subcommittee shall review the impact of the blended retirement rates on the retirement system, school divisions, and the Commonwealth.

 

d. Appropriations for contributions in Paragraphs 2 and 3 include payments from funds derived from the principal of the Literary Fund in accordance with Article VIII, Section 8, of the Constitution of Virginia. The amounts set aside from the Literary Fund for these purposes are approximately $115,854,700 the first year and $115,854,700 the second year. 

 

3. School Employee Social Security Contributions

 

This Item provides funds to each local school board for the state share of the employer's Social Security cost incurred by it, on behalf of the instructional personnel for subsequent transfer to the Contribution Fund pursuant to Title 51.1, Chapter 7, Code of Virginia.

 

4. School Employee Insurance Contributions

 

This Item provides funds to each local school board for the state share of the employer's Group Life Insurance cost incurred by it on behalf of instructional personnel who participate in group insurance under the provisions of Title 51.1, Chapter 5, Code of Virginia.

 

5. Basic Aid Payments

 

a.1) A state share of the Basic Operation Cost, which cost per pupil in March 31 ADM is established individually for each local school division based on the number of instructional personnel required by the Standards of Quality and the statewide prevailing salary levels (adjusted in Planning District Eight for the cost of competing) as well as recognized support costs calculated on a prevailing basis for an estimated March 31 ADM (adjusted for half-day kindergarten programs).

 

2)  This appropriation includes funding to recognize the common labor market in the Washington DC Metropolitan Statistical Area.  Standards of Quality salary payments for instructional and support positions in school divisions of the localities set out below have been adjusted for the equivalent portion of the Cost of Competing Adjustment (COCA) rates that are paid to local school divisions in Planning District 8.  For the counties of Stafford, Fauquier, Spotsylvania, Clarke, and Warren and the City of Fredericksburg the SOQ payments have been increased by 10 percent the first year and 25 percent the second year of the COCA rates paid to school divisions in Planning District 8.

 

b.1) The state share for a locality shall be equal to the Basic Operation Cost for that locality less the locality's estimated revenues from the state sales and use tax (returned on the basis of the 2005 triennial census of school age population as specified in this item), in the fiscal year in which the school year begins and less the required local expenditure.

 

2) In addition to this appropriation, $249,641,656 the first year and $249,641,656 the second year are transferred from Lottery Funds appropriated in this Item pursuant to paragraph 28.b.1) to Basic Aid Payments to provide for the state share of the Basic Operations Cost as defined in paragraphs a. and b.1) above.

 

3) In addition, $10,131,000 the first year is transferred from Lottery Funds to Basic Aid Payments from the fiscal year 2006 Lottery profits that are appropriated in this Item pursuant to paragraph 28.b.2).

 

c. For the purpose of this paragraph, the Department of Taxation's fiscal year sales and use tax estimates are as cited in this Item.

 

d.1) In accordance with the provisions of §§ 22.1-281 and 37.1-96, Code of Virginia, the Department of Education shall deduct the locality's share for the education of handicapped pupils residing in institutions within the Department of Mental Health, Mental Retardation and Substance Abuse Services from the locality's Basic Aid appropriation.

 

2) The amounts deducted from Basic Aid for the education of mentally retarded persons shall be transferred to the Department of Mental Health, Mental Retardation and Substance Abuse Services in support of the cost of educating such persons; the amount deducted from Basic Aid for the education of emotionally disturbed persons shall be used to cover extraordinary expenses incurred in the education of such persons. The Department of Education shall establish guidelines to implement these provisions and shall provide for the periodic transfer of sums due from each local school division to the Department of Mental Health, Mental Retardation and Substance Abuse Services and for Special Education categorical payments.  The amount of the actual transfers will be based on data accumulated during the prior school year.

 

e.1) The apportionment to localities of all driver education revenues received during the school year shall be made as an undesignated component of the state share of the basic operation cost in accordance with the provisions of this Item. Only school divisions complying with the standardized program established by the Board of Education shall be entitled to participate in the distribution of state funds appropriated for driver education. The Department of Education will deduct a designated amount per pupil from a school division's Basic Aid payment when the school division is not in compliance with § 22.1-205 C, Code of Virginia. Such amount will be computed by dividing the current appropriation for the Driver Education Fund by actual March 31 ADM.

 

2) Local school boards may charge a per pupil fee for behind-the-wheel driver education provided, however, that the fee charged plus the per pupil basic aid reimbursement for driver education shall not exceed the actual average per pupil cost. Such fees shall not be cause for a pro rata reduction in Basic Aid payments to school divisions.

 

f. Textbooks

 

1) The appropriations for basic aid include $ 67,593,217 the first year and $ 68,134,752 the second year from the general fund as the state's share of the cost of textbooks based on a per pupil amount of $100.28 the first year and $100.28 the second year. The state's distributions for textbooks shall be based on adjusted March 31 ADM.

 

2) School divisions shall provide free textbooks to all students.

 

3) School divisions may use a portion of this funding to purchase Standards of Learning instructional materials.

 

4) Any funds provided to school divisions for textbook costs that are unexpended as of June 30, 2007, or June 30, 2008, shall be carried on the books of the locality to be appropriated to the school division the following year to be used for same purpose.

 

g. The one-cent state sales and use tax earmarked for education and the sales tax revenues transferred to the general fund from the Public Education Standards of Quality/Local Real Estate Property Tax Relief Fund and appropriated in this item which are distributed to localities on the basis of the 2005 triennial census of school age population as specified in this item shall be reflected in each locality's annual budget for educational purposes as a separate revenue source for the then current fiscal year.

 

h. The appropriation for the Standards of Quality for Public Education (SOQ) includes amounts estimated at $254,800,000 $226,500,000 the first year and $269,100,000 $237,650,000 the second year from the amounts transferred to the general fund from the Public Education Standards of Quality/Local Real Estate Property Tax Relief Fund pursuant to Part 3 of this Act which are derived from the 1/4 cent increase in the state sales and use tax levied pursuant to Chapter 3, 2004 Special Session I. These additional funds are provided to local school divisions and local governments in order to relieve the financial pressure education programs place on local real estate taxes.

 

i. From the total amounts in paragraph h. above, an amount estimated at $127,400,000 $114,300,000 the first year and $134,500,000 $119,950,000 the second year (approximately 1/8 cent of sales and use tax) is appropriated to support a portion of the cost of the state’s share of the following revisions to the Standards of Quality pursuant to Chapters 939 & 955 of the Acts of Assembly of 2004: five elementary resource teachers per 1,000 students; one support and one instructional technology position per 1,000 students; a full daily planning period for teachers at the middle and high school levels in order to relieve the pressure on local real estate taxes and shall be taken into account by the governing body of the county, city, or town in setting real estate tax rates.

 

j. From the total amounts in paragraph h. above, an amount estimated at $127,400,000 $112,200,000 the first year and $134,500,000 $117,700,000 the second year (approximately 1/8 cent of sales and use tax) is appropriated in this Item to distribute the remainder of the revenues collected and deposited into the Public Education Standards of Quality/Local Real Estate Property Tax Relief Fund on the basis of the 2005 triennial census of school age population as specified in this item.

 

6. Compensation Supplements

 

a. The appropriation in this item includes $74,944,039 the first year and $129,855,748 the second year from the general fund for an equivalent payment for the following salary increase and related fringe benefit costs for funded SOQ instructional and support positions and other funded incentive program positions:

 

1) For the first year, the state share of a payment equivalent to a 3.0 percent salary increase effective December 1, 2006, for all funded positions.

 

2) For the first year, the state share of a payment equivalent to an additional 1.0 percent salary increase effective December 1, 2006, for funded SOQ instructional positions only.  Funded SOQ instructional positions shall include the teacher, guidance counselor, librarian, instructional aide, principal, and assistant principal positions funded through the SOQ staffing standards for each school division in both years of the biennium. 

 

3) It is the intent of the General Assembly that the average instructional position salaries be improved throughout the state by at least 4.0 percent the first year.  Sufficient funds are appropriated in this act to finance, on a statewide basis, the state share of a 3.0 percent salary increase for all funded positions and an additional 1.0 percent for funded SOQ instructional positions effective December 1, 2006, to school divisions which certify to the state Department of Education, no later than March 1, 2007, that equivalent increases have been granted in the first year. 

 

b. These funds shall be matched by the local government, based on the composite index of local ability-to-pay.

 

c. This funding is not intended as a mandate to increase salaries.

 

7. Education of the Gifted Payments

 

a. An additional payment shall be disbursed by the Department of Education to local school divisions to support the state share of one full-time equivalent instructional position per 1,000 students in adjusted March 31 ADM.

 

b. Local school divisions are required to spend, as part of the required local expenditure for the Standards of Quality the established per pupil cost for gifted education (state and local share) on approved programs for the gifted.

 

8. Occupational-Vocational Education Payments

 

a. An additional payment shall be disbursed by the Department of Education to the local school divisions to support the state share of the number of Vocational Education instructors required by the Standards of Quality. These funds shall be disbursed on the same basis as the payment is calculated.

 

b. An amount estimated at $97,297,766 the first year and $98,162,242 the second year from the general fund included in Basic Aid Payments relates to vocational education programs in support of the Standards of Quality.

 

9. Special Education Payments

 

a. An additional payment shall be disbursed by the Department of Education to the local school divisions to support the state share of the number of Special Education instructors required by the Standards of Quality. These funds shall be disbursed on the same basis as the payment is calculated.

 

b. Out of the amounts for special education payments, general fund support is provided to fund the caseload standards for speech pathologists at 68 students for each year of the biennium.

 

c. In recalculating the cost of the Standards of Quality effective with the new Control.Tabs('tab_group_one');