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Commonwealth's Counties

General Assembly Adopts “Skinny Budget,” Adjourns Sine Die

The 2023 session adjourned sine die on Saturday, February 25, as scheduled, but without resolving differences between the House and Senate on revisions to the biennium budget.  Instead, budget conferees proposed, and both chambers adopted, a “skinny budget” that addresses four priority items:

  • Includes $115.9 million GF in FY 2023 and $125.8 million GF in FY 2024 for the combined impact of K-12 technical adjustments related to average daily membership (ADM) changes, sales tax revenue forecast changes, and program participation updates. Also provides an additional $16.8 million GF in FY 2023 to ensure that the sum of basic aid and sales tax payments a school division receives in FY 2023 is at least the sum of basic aid and sales tax payments that was communicated to school divisions in June 2022; this action addresses the error in the Department of Education’s calculation tool for FY 2023.  If the total of basic aid + sales tax in HB1400 exceeds the June 2022 Memo amount, then no hold harmless funding is needed for that school division. If it is less, General Funds are provided to make up the gap. Most school divisions will experience a net increase due to increased sales tax revenue and student enrollment, which reduced the amount of General Funds needed to backfill in FY 2023 from $58 million (as originally estimated) to $16.8 million. The following links to a spreadsheet detailing how the estimated hold harmless for the VDOE error was calculated as well as the detailed estimated distributions for FY 23 and FY 24.
  • Provides $904.6 million to the Revenue Stabilization Fund to meet the Constitutionally-required FY 2024 deposit.
  • Provides the $250 million deposit to the Virginia Retirement System that was included in the budget adopted last year as a contingent appropriation to address unfunded liabilities. An estimated $147.5 million would be provided to the teacher retirement plan out of this funding.
  • Provides $100 million in FY 2023 to address cost overruns for previously authorized capital projects.

Media reports indicate that budget negotiators intend to continue working toward agreement on the larger array of spending items and tax policy changes under consideration in conference, and the Governor indicated a willingness to continue to work with the legislature to finalize a budget, although no dates have been provided for a potential special session as of yet.

VACo Contact:  VACo Legislative Team

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