Paid Sick Days Moves Forward in the House, Sales Tax Revenue Problem Must Be Addressed
August 27, 2020
August 27, 2020
August 27, 2020
By Kathy Burcher, VEA Director of Government Relations:
Please make sure you send an email to your legislators to let them know about the impact the sale tax revenue shortfall will have on every single school division in the Commonwealth. This is a huge, unexpected cut to the school budgets for the upcoming school year. No school division was prepared for this cut and none of them can absorb the cuts especially as they face all the challenges of returning to instruction in the face of a global pandemic and state of emergency. You can click here to act now.
I know this is a complicated issue, so I wanted to see how I could make it easier to digest. I am grateful to my team at the VEA with their help on this. You all know I like a food analogy. Think of the entire costs of the SOQ programs (we call those, in general, Direct Aid to Public Education) as a pie. The state determines how much the whole pie costs. By law, a portion of all sales taxes collected in VA go towards that price tag. After the sales tax revenues are applied to the cost of the Direct Aid pie (in green below), the state shares the responsibility of paying for the rest of the costs with the local governments (blue part of the pie). The state pays 55% of the remaining cost after the sales taxes are applied, and the localities pay 45%.
Schools built and adopted their 2020-2021 school year budgets based on these figures. Unfortunately, sales tax collections are down. By law, because revenues overall are down, the budget must be reset or reforecasted to reflect these losses. One of the big areas of lost revenue is in sales tax collection. When there is less sales tax money, there is less to apply to the Direct Aid pie. When that happens, more of the costs of the Direct Aid pie falls to the state and localities to pick up. Remember they do that at a 55/45 split. So, funding that school divisions thought was coming to them as the green part of the pie is now coming as the blue part of the pie. Instead the state will pick up only 55% of the costs. The graphic shows you what I mean.
We are getting less of the green, so more of the pie will be blue (split costs). To fix this we need a one-time state investment of just over $95 million to fill the whole left by the tax revenue losses. If legislators do not adopt this budget amendment, every single school division in Virginia will be facing cuts. Period. There is no way around it.
Act NOW and tell your legislators to support Delegate Cliff Hayes budget amendment 145 #6h to hold our public schools harmless from the lost tax revenues. Click here to send your email.
In other news, on Wednesday the House Committee on Labor and Commerce advanced Delegate Elizabeth Guzman’s Paid Sick Days bill (HB5116) on a 13-9 party line vote. The VEA is part of the Virginian’s for Paid Sick Days Coalition fighting to pass legislation to require all workers to have paid time off when they or a family member is sick. Today the House Democrats stood with workers once again when they passed this bill.
As VEA President James Fedderman said, “VEA members know that without access to paid sick days, many parents are left with no option when their children get sick. Educators often work with students who have come to school sick because their parent had to make an impossible choice—lose vital wages (and possibly their job) to stay home with their child, or send them to school in spite of the illness. It is well past time to give all working parents the peace of mind of paid sick days. If we want to keep our communities and our schools healthy, the General Assembly must pass paid sick leave for all workers.”
This legislation is very narrow and sunsets (ends) when the state of emergency related to COVID-19 expires, but it is a huge step forward in making Virginia a better place for workers.
Still, the bill faces a challenge in the Senate where the Senate Committee on Commerce and Labor killed the bill last week. The VEA applauds Delegate Guzman and the entire House Democratic Caucus for standing with workers who are literally facing life and death decisions during this pandemic. More on the Virginians for Paid Sick Days coalition here.