January 30, 2020
When Governor Northam presented his budget, he “baked in”
some money, meaning he assumed some new revenue bills would pass and so used
those anticipated revenues for funding. Today one of his budget assumptions
failed and K-12 education may pay the price.
You may have noticed all these game machines popping up in
gas stations and convenience stores. These “games of skill” are called “gray
machines.” That’s not because they’re gray; it’s because they operate in the
gray area of the law, currently unregulated and untaxed. There are no rules, no
requirements, and no one really watching. The governor believed the General
Assembly would regulate and tax these machines. He also assumed that such
machines would be under the authority of the Virginia Lottery. If so, any
proceeds would go to K-12. The governor’s budget team estimated those proceeds
to be $125 million a year.
Last night the governor’s bill in the House, carried by
Delegate Lamont Bagby, died on a vote of 8-0 in the gaming subcommittee. The
Senate version of the bill didn’t die but was rolled into a bill that bans the
machines in Virginia. That legislative action blew a $125 million hole in the
governor’s budget, which had planned for those millions to be used to backfill
the per pupil allotment. The per pupil allotment is the only state funding that
goes to the local school divisions with no strings attached, and is based on
how many students you have enrolled. Divisions can use it for recurring and
non-recurring costs. The money that was allocated for the per pupil allotment
was actually redirected to increase the At-Risk add on. Now that backfill money
is gone and there are no new revenues slated to go to K-12, which puts schools
in a very tight spot. The VEA supports all the funding the Governor included in
his introduced budget, but we have asked for significant additional
funding. Killing this revenue stream will force the General Assembly to make
some very difficult decisions. It will certainly sink some of the budget
amendments offered by some legislators. This is a self-inflicted wound. We will
have to see how they solve the problem.
