Gov Pledges to Hold Off on School Funding Change

By Amber Lester Wednesday, January 27, 2010

Gov. Bob McDonnell has pledged to freeze the Local Composite Index scores that determine how much state funding school divisions should receive.

McDonnell’s office confirmed Friday the new governor will uphold former Gov. Tim Kaine’s proposal to stall a planned change in the local composite index until fiscal year 2012. The decision, which still needs to be approved by the General Assembly, will provide some relief to school districts in the Historic Triangle.

The local composite index is a number assigned to each locality that determines its state funding. Any percentage change in the index number can greatly increase or decrease a school’s funding – a big deal in the current economic climate. The funding formula that determines the LCI number is calculated using the true value of real property (counting for 50 percent), adjusted gross income (40 percent) and taxable retail sales (10 percent) of each locality.

The higher the composite index, the less funding a school district receives and vice versa. For that reason, the scheduled change would have dramatic effects on schools whose LCI scores were expected to rise. In Williamsburg-James City County and York County schools, however, a frozen formula could be great news. The LCI score for both divisions was going to rise in the coming fiscal year.

If the LCI changes, WJCC could lose $2 million in state funding; York County could lose $700,000. WJCC’s current composite index score is .5286; York County’s is .3732.

Although local school finance officials haven’t received any official word from McDonnell’s office, they are encouraged by the new governor’s decision. “The key is that this is McDonnell’s proposal and has not been approved by the General Assembly,” said Dennis Jarrett, chief financial officer for York County schools. “But this is a very important crossroad.”

The news could be bad for several districts in Northern Virginia, including Fairfax, Loudoun and Prince William counties. Their LCI scores would have dropped this year, thus increasing their state funding. Fairfax County, which has been nationally lauded for its schools in the past, is considering legal action. At its Jan. 12 meeting, the Fairfax County Board of Supervisors unanimously voted to explore its legal options if the formula is frozen, according to a report from the Capital News Service. CNS also reported a cut to Fairfax’s funding could amount to 3 percent of its $2.2 billion budget.