As news of Gov. Bob McDonnell’s proposed cuts to education spread, concerned parents and citizens started e-mail campaigns to preserve education funding in the Historic Triangle.
Some wanted to contact the area’s delegates; others wanted to make their priorities known to the local school boards. Many had questions about how school is funded in the first place and who has the authority to make cuts; essentially, who could stop this from happening?
WYDaily decided to tackle some of the basic questions about how public schools are funded and who makes the decisions.
How does the federal government contribute?
In Virginia, schools are financed through a combination of federal, state and local funds. Businesses and private individuals also contribute to schools.
The federal government gives grant money to schools to finance various programs, including funds for special education, at-risk programming, school meals, preschools, technology initiatives and more. Much of the funding was authorized by the No Child Left Behind (NCLB) statute of 2001.
In Williamsburg-James City County schools, for example, the federal government was projected to give $3.2 million in grant funding in 2010. Some of that funding included Title I funds, which are allocated to schools with high populations of students receiving free and reduced lunch. James River Elementary, the division’s only magnet school, receives Title I funds.
How does the state finance schools?
State funds are appropriated for public education by the General Assembly. The GA finances schools primarily through the general fund, but also through retail sales and use tax revenues, state lottery proceeds and other revenue sources. In Fiscal Year 2010, the state allocated $5.3 billion for public education. The state’s total FY 2010 budget was $37.9 billion.
What are the “Standards of Quality”?
The Virginia Board of Education determines the Standards of Quality (SOQ), the minimum amount of programming school divisions must provide. The General Assembly revises the SOQ, determines how much it will cost to meet the standards and figures out how the state and localities will fund the SOQ. State funding must be matched by localities, but localities are free to spend more money on programs than required.
The SOQ determines the minimum amount of staff school divisions should employ. More than 80 percent of SOQ funding is for salaries and benefits.
To determine the cost of maintaining the SOQ, the state looks at the amount of required instructional personnel (salary and benefits), the recognized support positions and the non-personal support costs. “Non-personal” refers to costs beyond salary and benefits, such as supplies and utilities. A division’s SOQ funding is determined on a per-pupil basis and the costs are calculated according to the March 31 Annual Daily Membership, which figures how many students were actually attending a school on that date.
The SOQ is updated every two years to account for changes in the student population, staffing standards, salary changes, fringe benefit rates, support costs, inflation, federal revenues, sales tax revenues and local composite index scores.
The complex calculation to determine funding goes something like this: the cost components (Staffing standards, number of students, etc.) are added together, then the federal revenues are subtracted. Once the total SOQ costs are known, the per-pupil amounts for each division are figured out, then multiplied by the projected enrollment. That determines the total cost to maintain the SOQ.
As budget outlooks have grown bleak, some administrators have called for some of the standards to be relaxed. The WJCC school board’s legislative agenda asked the state to either fund all of the standards required in the SOQ or remove some of the requirements.
How much do cities and counties contribute?
Once the total cost to maintain the SOQ is determined, the state uses the Local Composite Index score to figure how much of the burden can be carried by the locality. The LCI is calculated using three factors: the true value of real property (weighted 50 percent), adjusted gross income (weighted 40 percent) and taxable retail sales (weighted 10 percent).
The composite index score has already been calculated for the 2010-2012 biennium; former Gov. Tim Kaine proposed freezing the numbers at their previous amounts, but McDonnell proposed moving forward with the new composite index numbers.
Any locality with a higher composite index after the change will receive less state funding. For that reason, Hampton Roads schools were hopeful the new governor and GA would follow Kaine’s lead. But freezing the planned change would have cost Northern Virginia schools more than $100 million, a reason McDonnell cited for his decision.
What are the LCI scores in the Triangle?
For 2010-2012, Williamsburg’s true value of property is about $1.9 billion; its adjusted gross income (including nonresidents) is $404.8 million; its taxable retail sales revenue is about $417.6 million. When the March 31 annual daily membership was recorded, 758 students from Williamsburg attended schools. Those numbers were used to compile the composite index, which came out to .8000.
Williamsburg’s relatively high composite index score is the same as Alexandria’s and compared to the rest of the Historic Triangle, Williamsburg is the locality with the most ability to pay for its education. But when the March 31 ADM was counted, the city contributed fewer than 800 students to the 10,111 student population in WJCC.
For James City County, the true value of property is about $11.5 billion; the adjusted gross income (including nonresidents) is about $2.3 billion; the taxable retail sales revenue is $843.4 million. On March 31, James City County families sent 9,353 students to school. James City County’s composite index was calculated to be .5668. In the previous biennium, the composite index was .5286.
Finally, in York County, the true value of property is about $9.3 billion; the adjusted gross income (including nonresidents) is about $1.8 billion; the taxable retail sales revenue is $865.8 million. Its March 31 Annual Daily Membership was 12,745. Its composite index for the biennium is .3727.
The communities in the Historic Triangle have lower real estate taxes than the rest of the Peninsula. Williamsburg has the lowest real estate tax rate, at $.54 per every $100 of a home’s assessed value. James City County’s real estate tax rate is $.77/$100 of assessed value and York County’s is $.6575/$100. Newport News has the highest real estate tax rate on the Peninsula, at $1.10 per $100 of the assessed value.
So how is all of that information translated in dollars? In 2009, Williamsburg contributed $7, 024,365 (or 6.1 percent) to WJCC schools. In the same year, James City County contributed $74,844,700 (or 65 percent) to WJCC schools. In total, local funds accounted for 71 percent of WJCC’s operating budget in FY 2009-2010.
The state contributed an additional $32.8 million (or 28.5 percent) of the operating budget. The majority of the funding comes from the Standards of Quality fund; 2 percent comes from the Categorical/Incentive fund and the Lottery Fund.
Who makes the decisions at my child’s school?
Education cuts are difficult to make because funds are typically allocated for specific expenditures, meaning schools cannot use allocated funds for anything other than their intended purpose. For example, a school cannot use money earmarked for construction projects to save the jobs of teacher assistants.
Each school division creates a Superintendent’s proposed budget in the first months of the year. The budget includes the expenses required by the Standards of Quality and No Child Left Behind, along with any division-specific programming. The proposed budget is then sent to the school board for review, at which point the school board makes changes as necessary.
Once the school board has approved and edited the superintendent’s budget, it becomes the school board’s budget. That budget is presented to the Board of Supervisors or City Council for final approval.
As the budget moves through the ruling bodies, it changes to reflect the state and federal contributions. Sometimes the state or federal government will realize mid-year that projected revenues will be less than expected; for that reason, schools sometimes are forced to make cuts to their already prepared budgets.