Dear Mrs. McGuinn,
As you undoubtedly recognize, delivering a balanced budget this year will require heroic decision-making. The task is difficult and yet it is our charge to keep. Former Governor Kaine complicated matters by presenting a draft budget with latent defects and an income tax increase. The resulting effect was a severely imbalanced budget requiring approximately an additional $2 billion in cuts. This impact accounts for declining state revenues and presents this Assembly with a cumulative $4.2 billion budget shortfall over the 2011-12 biennium. The question is whether increasing state revenues from taxes and fees or reductions in spending will best address this dilemma. Virginia legislators are proceeding to protect taxpayers and took the first step Sunday February 21st towards balancing this spending plan for the next two years with as little impact to K-12 education as practicable in this unprecedented economic climate. The initial spending roadmap calls for zero tax increases and eliminates $125 million in additional fees presented by the outgoing administration.
Given that Virginia is dealing with the lingering effects of the worst economic recession in over 70 years or since the Great Depression education, which is the single largest component of the state budget, simply can no longer be held harmless to balance the state budget without a job-killing tax increase. Governor McDonnell and our own legislative leadership indicated that new tax proposals are a nonstarter while we recover. Voters feel the same way. Unfortunately, most the “easy” fixes have already been used in FY09, and closing the shortfall will have to be accomplished in large part through the use of more on-going cuts which will likely have an impact on certain government functions including public education.
Over the last 10 years, the General Assembly has increased the Commonwealth's funding for public education by almost 60%. In the meantime, over the last 10 years, student membership only increased by 7.2%. So, while funding increased by 60%, the number of students increased by less than 10%. Clearly, the Commonwealth has invested significantly more than dollars in education than is required to meet the demands of population growth and more than inflation when times were good. Prior to last year, public education was held harmless while other state agencies and services were reduced during several rounds of budget cuts.
In the House of Delegates budget which was approved February 21 in our Appropriations committee and will later be considered by the full House this week, K-12 spending reductions are inclusive of requests from localities for greater flexibility. The House eliminates many state mandates which bind dollars used locally. This structural reform provides additional local flexibility and by so doing generates approximately $310 million each year for local school divisions. Ultimately with the relaxing of these state mandates the net impact on school divisions is approximately $40 million per year statewide.
Among other areas for saving, the House budget suspends secondary planning period standards and saves $185.7 million in FY 2011 and $188.1 million in FY 2012. The establishment of a Lottery Proceeds Block Grant for At-Risk, Early Reading Intervention and PreK programs provides flexibility to localities to determine levels of participation for each of the three eligible programs. The block grant would be allocated on a per pupil amount. The local school division will be able to fund programs beneficial for their students and not fund programs that are underutilized. The House budget also restores the funds for the School Lunch program with projected additional revenues from the state’s participation in the Lottery Power Ball game and saves $5.8 million each year.
The Local Composite Index (LCI) amendments to former Governor Kaine’s proposed budget provide $29.5 million to unfreeze the LCI update in FY 2011 from reduced rates for the cost of competing adjustment (COCA). The COCA primarily benefits Northern Virginia school divisions. Governor Kaine did not “freeze” 2012 LCI. Savings from COCA provides an additional $91.7 million in FY 2011 in order to provide an 80% hold harmless payment to those school divisions, like ours, whose LCI is increasing based on the re-benchmarking. The budget contains contingent reserve language related to the potential for two additional quarters of enhanced federal funding amounting to $23 million that will fund the remaining 20% needed to hold all localities 100% harmless.
I have long supported enhanced resources and more dollars to the classroom. In the House budget, schools will have the flexibility they asked for to increase class sizes by one student as outlined below without any reduction in state funding. Further, ratio requirements for Prevention, Intervention, and Remediation programs, Limited English Proficiency, Elementary Resource, Gifted and Talented, and Career and Technical have been waived.
Several weeks remain in the budgeting process and there are many other areas of importance such as public safety, transportation and health and human resources that will see similar reductions. I reiterate that delivering a balanced budget this year will require heroic and possibly unpopular decision-making. While the task is difficult the state will have a budget and collectively we will weather this unprecedented economic climate and the effects of the worst economic recession in over 70 years. Right-sizing and creating a more efficient government will be the right decision for the future.
I welcome your continued feedback on the budget proposals as they materialize. Thank you again for your input. I am honored to serve as your Delegate from the 97th District.
Respectfully,
Delegate Christopher K. Peace
97th House District
804-698-1097 (Richmond Office)
804-730-3737 (District Office)
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