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The Voice of the

Commonwealth's Counties

School Board Unexpended Funds Bill Falters

On January 24, the House Education Committee’s K-12 Subcommittee acted on HB 2399 (Simonds). As originally drafted, this bill would permit any school board to establish a capital reserve fund as a savings account into which it exclusively deposits the local operating funds that remain unexpended at the end of the year for future school division capital expenditures at no additional cost to local taxpayers, subject to certain conditions enumerated in the bill.

Currently, all year-end funds appropriated to local school divisions by the locality revert to the locality, retaining discretion with the governing body to evaluate and approve reallocation of year-end fund balances. The bill would subvert this authority given to localities and would be a dramatic policy change negatively impacting local governing bodies financially and in their relationships with other governmental entities.

VACo has historically opposed these measures.

After expressing concerns, the patron offered an amendment that still required the conditions of the original bill but stipulated that the approval of the local governing body was also needed. Though grateful to the patron for this change that addressed a substantial portion of VACo’s concerns, to which VACo testified, VACo still expressed concerns regarding the impact this might have on existing arrangements between county governments and school boards as well as the precedent this legislation would set.

After some discussion, the subcommittee failed to recommend reporting the bill on a vote of 3-5.

VACo Contact: Jeremy R. Bennett

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