Wednesday, January 11, 2017

And So It Begins...

At noon today the Virginia House of Delegates the Virginia Senate gaveled in the 2017 session. The first day is filled with ceremonial votes and introductions. Tonight at 7pm Governor Terry McAuliffe will deliver his State of the Commonwealth address. I certainly anticipate some updates on revenues and information on his plan to balance the budget.

One thing you will likely hear the Governor say is that K-12 was “held harmless” in the most recent cuts. Let’s put that in some perspective.

Yes, Direct Aid to K-12 has not been subject to the 5% to 7.5% cuts other departments were required to make. But the 2% salary increase that was included in the first year of the budget was tied to the state meeting the revenue forecast. When VA fell short, K-12 lost $134.4 million dollars in state funds to support those increases. The Governor has proposed state support for a 1.5% one-time “bonus” for SOQ positons, but there is no language in the budget that localities must implement this plan, and we know that localities would have to foot the bill for the local share of this bonus and cover the full amount for non-SOQ positions. K-12 also saw just over $102 million in losses from the General Fund that was supplanted with the same amount from Non-General Fund revenues (Lottery Funds and Literary Funds). And losses in average daily membership came to another drop in state funding of $85 million. So, yes, Direct Aid was held harmless, but don’t be fooled. Don’t get me wrong, we are certainly grateful to the Governor and his efforts to find additional money to fill the holes in the K-12 budget, but “harmless” these reductions are not.

Today in House Appropriations we got our first real senses of the path the House may take in their budget. The House Appropriations Committee received a presentation on the Governor’s proposed budget amendments. We have been hearing rumors that House Republicans were trying to restore the 2% salary increase for teachers, but there was some potential, and concerning, writing on the wall. Delegate Chris Jones, Chair of House Appropriations, asked what can only be considered a rhetorical question of his staff during the presentation. Delegate Jones asked if most school divisions gave the 2% raise anyway, and he got the answer he was looking for- YES. Most localities in VA were able to fully fund the salary increase even when the state failed to deliver on their share. Delegate Jones went on to ask, “Did the localities have enough time to rescind the raises once they heard the state would fall short in revenue forecasts?” Answer from House Appropriations staff, “Yes.”

I guess Delegate Jones wanted the packed room to know that teachers in many divisions got raises in spite of the state. Of course to make that happen, localities had to cut in other areas. Giving a teacher a salary increase and then saying, “Never mind, we take it back” is bad business and those divisions that COULD afford the raise locally, DID. But we know our most in-need localities, the ones who CAN’T, didn’t, and those teachers had the rug swiped out from under them. Not sure Delegate Jones’ comments are good supporting evidence that the House Republicans will be leading a charge to prioritize salary increases. We will no more in the next few days as budget amendments from members of the General Assembly are filed. Let’s hope they aren’t all going to keep up with the Jones.