HJR 723

Special Task Force Examining the Impact of the SOA on Local School Division Budgets

November 9, 2000, Richmond

SOA Survey

Pursuant to the 2000 Appropriation Act, Item 133 S, § 1-52, the Board of Education was to "calculate the costs of implementing and complying with the Standards of Accreditation and … [to] report its findings to the Governor and the Chairmen of the Senate Finance and the House Appropriations Committees by September 1, 2000." In response to this directive, the Department of Education identified specific expenditure categories correlating to the Standards of Accreditation (SOA) revisions adopted in 1997. A survey reflecting these categories was then distributed to school divisions, who were asked to indicate only those expenditures "associated with implementing and complying with the revised SOA adopted by the Board of Education in September 1997." The survey requested information for the last three fiscal years (1998, 1999, 2000) on funding from all sources—federal, state, local, or other—and asked that programs and activities supported with dedicated appropriations (new funding) be reported as "new expenditures" and that programs and activities supported by existing, redirected dollars be included as "reprogrammed expenditures."

State initiatives were listed as those "created to help school divisions meet the revised SOA" and included Standards of Learning (SOL) materials, SOL remediation, SOL testing, school report card, and early reading intervention. School divisions were to report moneys regardless of source, including local funds used to meet a required local match.

The survey also distinguished local initiatives as those "created at the local level in response to the revised SOA" and was specifically to exclude those funds spent as required by the Standards of Quality (SOQ). Expenditure categories within these initiatives included general instruction, remediation, and prevention/intervention (each to reflect additional classroom teachers or other personnel hired to meet new requirements); curriculum alignment; professional development; and facilities.

Survey Response

The survey generated a 72 percent response rate by the September 5, 2000, deadline, with 95 of 132 divisions reporting. School divisions reported total expenditures of $535.8 million to support the new SOA since 1997; of this amount, $139.9 million and $395.9 million addressed state and local initiatives, respectively. New appropriations accounted for $366.3 million; the remaining $169.5 million was culled from redirected or reprogrammed funds. Total annual expenditures increased in each of the three years: $116.6 million in 1998, $188.4 million in 1999, and $230.7 million in 2000. Similarly, statewide pupil-based averages increased from $159.54 and $255.63 per pupil in 1998 and 1999, respectively, to $310.72 in 2000.

Direct aid to public education increased by $804.4 million (about 25 percent) during this three-year span. Likely contributing to this increase are increased enrollments, expanded participation levels, and new incentive-based initiatives. While localities reported expenditures for incentive programs within the state initiatives portion of the survey, funding for state incentive-based programs not targeting the SOA may have been reported within the local initiatives category. It should also be noted that some school divisions may not have tapped into certain state incentive programs if they were unable to supply the required match of local funds.

The survey may offer more of a "best estimate" rather than a scientific approach to the questions proffered. Local school divisions may have reported data in different fashions, and data retrieval concerns and different accounting and labeling systems also challenged divisions to identify accurately the funding sources and programs cited. Some divisions attempted to identify specific program changes prompted by the SOA revisions and then develop cost estimates.


Pursuant to HJR 173, adopted by the 2000 Session, the Joint Legislative Audit and Review Commission (JLARC), in cooperation with the House Committee on Appropriations and the Senate Committee on Finance, was directed to study the funding of the Standards of Quality (SOQ). More specifically, the resolution directed JLARC to

(i) review current statutory, constitutional, and budgetary provisions governing the calculation of SOQ costs and funding;

(ii) identify and review the educational programs and services required by the Standards of Quality, and state and federal laws, including the objectives, the target population, and funding levels for each program;

(iii) identify and review non-mandated programs authorized by state and federal laws that have been implemented by school divisions, including locally developed and funded educational programs;

(iv) consider current adjustments for SOQ funding and potential enhancements to the methodology for calculating the costs of the Standards of Quality;

(v) determine whether all programs required by the Standards of Quality are based on the locality’s ability to pay, and whether state or federal funds are provided or are available;

(vi) review the Department of Education’s process and procedure for calculating and distributing state funds based on the current funding methodology; and

(vii) evaluate the need to adjust the current basic school aid formula and determine the efficacy of devising an alternative method for funding public education in Virginia that is sufficient to meet the true costs of public education.

The JLARC study will address expenditures made by school divisions in excess of the SOQ; however, additional issues, such as local ability-to-pay, will also be targeted. An interim status report is anticipated at the December 2000 JLARC meeting, with a final report to be briefed in August 2001. Regional input sessions were conducted across the Commonwealth over the summer, revealing six major areas of concern: (i) SOQ recognized staffing, (ii) teacher salaries, (iii) technology needs, (iv) special education costs, (v) debt service and capital costs, and (vi) local ability-to-pay.

Following the circulation of a draft survey to some division superintendents and finance officers, school divisions received a survey to complete in fall 2000. Comprised of 15 sections and due December 7, 2000, the survey requests specific data regarding

1. elementary classroom instructional positions,

2. secondary classroom instructional positions,

3. alternative education,

4. school resource officers,

5. school health personnel,

6. medically fragile students,

7. special education,

8. fringe benefits,

9. salary increases,

10. other enhancements to instructional salary levels,

11. staff recruitment and retention,

12. miscellaneous (capital outlay, bus replacement, repayment periods for loans),

13. course offerings and maximum class sizes in 2000-2001,

14. possible annual school report (ASR) data reporting inconsistencies or suggestions, and

15. additional comments.

Several survey sections seek to compare locally offered full-time employee positions with those required by the SOQ. Also to be explored within these survey sections are potential staffing shortages. Supplementing the survey will be data received through the Department of Education regarding technology and Internet connectivity. The survey did not include specific local ability-to-pay issues, as this calculation is based on revenue and tax data. Fiscal stress and local effort are, however, expected to be examined at some other time.

SOQ Funding

Finally, the task force briefly noted the status of its study outline Item #6: Update from SJR 481 (Efficacy and Appropriateness of Adjusting Standards of Quality Funding for Certain Small School Divisions)." Adopted by the 1999 Session, the resolution requested the Senate Committees on Finance and Education and Health and the House Committees on Appropriations and Education to examine the efficacy and appropriateness of adjusting SOQ funding for certain small school divisions. In conducting the study, the committees were to consider, among other things, current statutory, constitutional, and budget provisions governing the calculation of SOQ costs and funding; current adjustments for SOQ funding; school funding formulas in other states; and such other issues deemed appropriate. Although the named standing committees have not met to specifically address this issue, the 2000 Appropriations Act, (Item 143, C7b) included an "additional state payment of $400,000 the first year and $400,000 the second year from the general fund is provided as equal Small School Division Assistance grants for the school divisions of Highland County and the City of Norton."

The Honorable Flora D. Crittenden, Chair
Legislative Services contact: Kathleen G. Harris