The House Appropriations and Senate Finance and Appropriations Committees met on Sunday and reported their respective amendments to the introduced budget. As has been the traditional practice on “Budget Sunday,” Committee leadership outlined the priority elements of their respective proposals and provided preliminary information on the proposed amendments. The actual text of the budget amendments will be unveiled on Tuesday afternoon, February 7, and the full House and Senate will vote on the proposed budgets on Thursday, February 9.
The two budgets differ significantly in their levels of available resources, as the House Appropriations Committee retains proposals for tax relief included in the introduced budget, while the Senate Finance and Appropriations Committee removed approximately $1 billion in proposed tax policy adjustments from the introduced budget. In his opening remarks, House Appropriations Chairman Barry Knight outlined the Committee’s areas of focus in developing its budget: ensuring structural soundness, expanding on investments made in 2022, and providing tax relief. The House Appropriations Committee’s budget goals included a focus on one-time expenditures, in order to guard against an expected economic downturn; the provision of salary increases; addressing the state’s mental health and addiction crises; enhancing investments made in 2022 in K-12, higher education, and health and human resources; and enhancing economic and workforce development activities. In her opening comments, Senate Finance and Appropriations Co-Chair Janet Howell indicated a reluctance to adopt further tax relief beyond the measures adopted in 2022, and underscored the importance of meeting commitments to restore funding that was reduced during the Great Recession. Major priorities for the Senate Finance and Appropriations Committee included K-12 staffing, to include full removal of the cap on recognition of support position in the Standards of Quality; behavioral health; and employee compensation.
There are several areas of common interest in the two proposals. Both budgets propose enhancing the 5 percent salary increases for state employees, state-supported local employees, and K-12 instructional and support positions in FY 2024 that were included in the budget adopted in 2022 (and retained in the introduced budget) by 2 percent, for a total of 7 percent. Both budgets propose compensation increases for Community Services Board staff. Of particular interest to local governments, both committees put forward plans to rectify the error in the Department of Education’s calculation tool, which over-estimated basic aid distributions to school divisions by approximately $58 million in FY 2023.
VACo staff will be reviewing the full text of budget amendments when they are released on Tuesday afternoon. A preliminary overview of the key features of the two committee budgets, based on information provided on Sunday, follows below.
K-12
House Appropriations Committee
- Provides $4.9 million GF in FY 2023 to ensure that the per-pupil amount of basic aid and sales tax payments to school divisions is greater than the per-pupil amount of basic aid and sales tax payments that was originally and erroneously communicated by the Virginia Department of Education in June 2022. As reported, the calculation tool overestimated the amount of funding school divisions should receive by $58.1 million in FY 2023. In addition to the $4.9 million, the House budget intends to offset this discrepancy by the net impact of the sales tax reforecast of $84.8 million.
- Provides $6.7 million in FY 2024 from remaining federal pandemic relief funding to expand the Virginia Literacy Act from grades K-3 to grades K-8 and provides $13.9 million GF in FY 2024 for reading specialists in grades 6-8.
- Provides $3 million GF in FY 2024 for instructional aides for schools that did not meet performance benchmarks for five or more school quality indicators based on the Board of Education’s most recent accreditation calculations.
- Provides $12 million in FY 2024 in Lottery proceeds for school security grants.
- Includes language modifying provisions of the School Construction Assistance Program by adding the principal portion of debt service payments on projects that have not yet been completed as an eligible use; clarifying that any project that began construction after July 1, 2022, may qualify for grant funds; allowing the most favorable year among three years of fiscal stress index data to be used to determine the grant award amounts; and requiring the program guidelines to address joint grant applications for regional school construction projects.
Senate Finance and Appropriations
- Includes $58.1 million in FY 2023 to hold school divisions harmless with respect to the error in the Virginia Department of Education’s calculation tool.
- Provides $270.6 million in FY 2024 to eliminate the cap on recognition of support positions in the Standards of Quality, a long-sought priority for VACo.
- Provides $38.6 million in FY 2024 for instructional assistants for schools not meeting three or more of the Board of Education’s performance benchmarks for school accreditation.
- Provides $50 million for school security grants in FY 2024.
- Provides $56.9 million in FY 2024 for the state’s share of four specialized support positions per 1,000 students.
- Provides $27.5 million to fund reading specialists in grades 6-8.
- Contingent on FY 2023 revenues, provides $100 million for school capital projects.
Compensation
House Appropriations
- Eliminates proposed teacher performance bonus that was included in the introduced budget. Redirects proposed bonus funds and adds $64.5 million GF to enhance the 5 percent salary increase adopted in the June 2022 budget and retained in the introduced budget for instructional and support positions by an additional 2 percent, for a total salary increase of 7 percent in FY 2024. Directs the Department of Education to convene a workgroup to determine appropriate metrics for the state’s goals for teacher compensation.
- Redirects proposed funding for proposed bonus payments for state employees in the introduced budget to enhance the 5 percent salary increase adopted in the June 2022 budget and retained in the introduced budget for state employees and state-supported local employees by an additional 2 percent, for a total salary increase of 7 percent in FY 2024.
- Provides $36.5 million for compensation increases for Community Services Board staff. The amendment explains that this amount equates to approximately 5 percent of CSB payroll.
Senate Finance and Appropriations
- Eliminates proposed teacher performance bonus and proposed teacher retention bonus that were included in the introduced budget. Enhances the 5 percent salary increase adopted in the June 2022 budget and retained in the introduced budget for instructional and support positions by an additional 2 percent, for a total salary increase of 7 percent in FY 2024. Provides a $1000 bonus for instructional and support positions in December 2023. According to the materials provided on Sunday, no local match is required for this bonus payment.
- Enhances the proposed 5 percent salary increase adopted in the June 2022 budget and retained in the introduced budget for state employees and state-supported local employees by an additional 2 percent, for a total salary increase of 7 percent in FY 2024. Reduces proposed bonus for state employees in the introduced budget from $1500 to $1000.
- Provides $50 million for compensation increases for Community Services Boards in FY 2024.
Elections
House Appropriations and Senate Finance and Appropriations
- Both proposals include $1.4 million to increase the amount included in the introduced budget to reimburse localities for costs associated with administering the 2024 Presidential primary.
Environment and Agriculture
House Appropriations
- Deposits $10 million into the Stormwater Local Assistance Fund in FY 2024.
- Provides $355,000 in FY 2024 for the Center for Rural Virginia.
Senate Finance and Appropriations
- Deposits $20 million into the Stormwater Local Assistance Fund.
- Provides $12.9 million in FY 2024 for incentives to farm operators for the adoption of cost-effective nutrient management practices.
- Provides $10 million for the Forest Sustainability Fund, which was created in 2022 and provides funding to localities that have adopted a use value assessment program for real estate devoted to forest use.
- Provides $443,750 for the Center for Rural Virginia over the biennium.
Jails
Senate Finance and Appropriations
- Provides $8.8 million to raise the per diem rate for local-responsible inmates from $4 to $6.
Public Safety
Senate Finance and Appropriations
- Provides $2.1 million in FY 2024 in additional HB 599 funding for localities with police departments.
Transportation
House Appropriations
- Provides $150 million GF in FY 2024 for widening Interstate 81 in Roanoke and Botetourt Counties.
- Includes $55 million GF over the biennium for construction of an inland port in the Mount Rogers Planning District.
Senate Finance and Appropriations
- Contingent on FY 2023 revenues, provides $250 million for high-priority improvements on Interstate 81.
- Provides $10 million GF in FY 2024 for planning for an inland port in the Mount Rogers Planning District.
VACo Contacts: VACo Legislative Team