Friday, September 25, 2020

Special Session Budgets are Here. Senators Still Need Our Pressure

September 25, 2020

Your pressure helped win $95 million for K-12 education to protect local school divisions from sales tax revenue losses, and the opportunity to win Hold Harmless language in the budget to deal with enrollment losses remains on the table as the money committees prepare for their final negotiations.

That’s the skinny from the release today by the House and Senate of their respective budget documents.

Here’s the background.

The General Assembly Money Committees met today to present their amendments to the 2020-2022 Biennial Budget that was adopted on March 12. These amendments address COVID-19 response and funding to implement legislation that will pass during Special Session. As you may recall, the 2020-2022 Biennial budget included just over $490 million in new state funding for our public schools. You may also recall that on March 13, the day after the budget was adopted, schools began to go to all-virtual because of COVID-19. By the time the General Assembly reconvened in April, the economic crisis made dramatic budget action necessary and they unallotted nearly all that new funding. 

Governor Northam called the General Assembly back for a Special Session in August to take up the budget, COVID response, and police reform. While we began our work urging the General Assembly to restore the $490 million, we quickly saw there were two huge issues that would put significant holes in current school year budgets in every single school division in the Commonwealth: lost sales tax revenues and reduced enrollment because of the virus. While the VEA continued to pressure House and Senate leadership on the unallotted spending, we also did everything possible to fill these huge holes and protect our members from furloughs and layoffs. 

We needed a state allocation of $95.2 million dollars for Sales Tax Losses and we needed language only to protect current funding levels from cuts due to lower enrollments this fall. ADM is Average Daily Membership, and the state uses these figures for their per-pupil payments to local schools. As the September numbers came in, we saw the possibility of up to $150-160 million in lost state support. That would be devastating to almost every division. 

Today our work paid off in the House, as they included exactly the amendments to their budgets that we requested: 

Education FY20-21 FY21-22
Direct Aid to Public Education $95,227,730 
Hold Harmless Sales Tax $95,227,730
Page 66, after line 25 insert:
e.1) This item includes an appropriation estimated at $95,227,730 in the first year from the revenues generated by the provisions of Chapters 1217 and 1277, 2020 Acts of Assembly, to be paid to local school divisions as a hold harmless payment dedicated to public education. Local governing bodies shall appropriate these funds to the local school divisions in the same manner in which they appropriate sales tax revenues dedicated to public education.

Direct Aid to Public Education Language
Page 47, after line 19, insert:
"30. The Department of Education shall not reduce semi-monthly payments to school divisions due to mid-year adjustments to ADM projections in the first year. Semi-monthly payments occurring after the final calculation of March 31 ADM shall be adjusted to address changes in membership that occur throughout the school year."
(This amendment delays reductions to state payments resulting from reduced ADM projections until after the final March 31 ADM is calculated. Normally, state payments to school divisions are adjusted in January to reflect revised ADM projections, which are based in part on September 30 membership counts. This amendment would prevent school divisions from experiencing any reductions in state payments until after the General Assembly convenes for the 2021 Regular Session.) 

Senate Needs Push

The Senate included one-time sales tax money but failed to include the language to protect funding related to lost enrollment. There are many members of the Senate who think this issue can wait until the regular session begins in January, so they did not include it. That is where our work must turn. We need to educate them on the potential impact if the language is not included. We should be able to make this happen in budget conference, as the language costs no money. Be on the lookout for an action alert from us very soon. 

The VEA is grateful to our partners at VASS and the VA Association of Counties (VACo) for their work on getting the data we needed to present a clear and concise message to our members and to the members of the General Assembly. Our members lifted these issues up to their own legislators and to the leadership of the money committees. Our members called, emailed, shared social media, and texted. They kept this issue on the front burner and then turned up the heat. This was a grassroots effort and it paid off. I must also mention House leadership. They were very responsive. Elections matter. 

While I am relieved today that we were able to fill most of these massive holes, the budget officially cuts nearly all the new spending we worked so hard for last session. There is much work to do. Today, though, we are on the path to save jobs and protect our members from furloughs, and we learned that that the House of Delegates will stand with us in a crisis. As we one day move forward from this pandemic, we need the entire General Assembly to always stand with us—in words, actions, AND budget votes. 

Now all attention turns to getting the Senate budget conferees to add the ADM language. We need that.