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  • Virginia1
  • William Owings (bio) and Leslie S. Kaplan (bio)

background

In April 2020, the General Assembly (GA) adopted a $135 billion budget amid early warnings of COVID-19. Later in April, $2.2 billion in new spending was "unallocated" – still in the budget but could not be spent. The Governor recalled the GA for a special session (August 18 to October 16) to rework the budget.

Virginia's second quarter change in real GDP stands at -27.0, a bit better than the U.S. rate at -31.4.2 The June 30 end-of-budget year ended with $236.5 million less revenue than projected which reflects this GDP change.3 In the first year of the budget, general funds spending for the P-12 and higher education institutions increases totaled $695 million over 2019. The increase in P-12 education almost restores spending to 2009 levels.

funding priorities for p-12 and higher education

Initial P-12 priorities funded in the March budget included increasing salaries, expanding early childhood education, increasing support for at-risk students, and funding additional school counselors. With revenue shortages, the Governor and GA suspended these funds. In many schools, the priorities changed to how to pay for COVID-19-related expenses transitioning to virtual education, providing meals and technology hardware for students, and providing "hotspots" for areas and families without broadband. A drop in enrollment of more than 37,000 public school students on September 30 caused further funding issues.4

The GA Special Session-approved budget "reallocated" funds back to the P-12 education budget in the following areas:

  • • Provided $95.2 million from other revenues for a decline in projected sales tax for local SOQ costs.

  • • Provided $220.8 million funds from CARES Act to support COVID-19 costs.

  • • Redirected $8.9 million from CARES Act to technology needs.

  • • Restoreed $37.3 million (second year) for early childhood education. [End Page 369]

  • • Restored $35.2 million (second year) for at-risk students.

  • • Allowed $75 million use of textbook funds for COVID-19 costs or virtual education.

  • • Delayed Average Daily Membership projection to the March 31, 2021.

In higher education, funding prioritized additional monies to institutions that decided not to increase in-state tuition rates. Currently, the state support level rests at 45 percent5, instead of 2004 goal of 67 percent. The state also prioritized adjusting the financial aid funding model to support additional monies for low- and middle-income families. COVID-19 priorities included student retention, developing safety protocols, and funding safety-related expenses.

The Special Session-approved budget "reallocated" funds back to the higher education budget:

  • • $80 million in General Fund (GF) in 2021, allocated based on in-state undergraduates and addressing estimated revenue shortfalls.

  • • $15.4 million GF restoration of first-year funding at two HBCU institutions.

  • • $5.4 million in GF for workforce development, Online Virginia, local library aid, and Virtual Library funding.

changes to funding formula for p-12 and/or higher education

No changes.

pressing state issues affecting p-12 and/or higher education funding

In spite of recent financial gains, state support was still down 9.1 percent going into this legislative session (FY 2019 compared to FY 2009), staffing declined by 1,242 positions, and enrollment increased by 53,376 students,6 placing the onus on the localities. According to the Virginia funding formula, localities are required to raise $3.6 billion to meet the SOQ. Local spending is now $7.6 billion—$4 billion above the state requirement. Poorer localities may not be able to increase their spending,7 exacerbating equity concerns.

Virginia's average salaries for teachers ranked 33rd out of 51.8 NEA estimates average Virginia teacher salary is $9,712 below the national average in FY 2020.9 With the Virginia Retirement System (VRS) changed from a defined benefit to a hybrid plan, recruiting and retaining teachers is becoming problematic. The Economic Policy Institute finds Virginia teachers have the largest "wage penalty" in the U.S. (earnings compared to similar college graduates).10 [End Page 370]

In higher education, between 1992 and 2018, GF appropriations fell from 14.4 percent to 10.2 percent of the total...

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