Charlottesville’s ability to pay for local education has gone up slightly, according to the formula that determines state funding for public school divisions.
That means the city will expected to continue to shoulder a significant percentage of the school division’s budget, but it’s early in the budget process and specific dollar amounts will be presented next month.
The formula, known as the local composite index, lags two years behind and takes several factors into account such as average daily enrollment and the true value of property in a locality.
“The good news is that it didn’t change that much,” said Kim Powell, the division’s assistant superintendent for finance and operations, during a budget work session Thursday. “The bad news, it went in the wrong direction.”
For 2022 to 2024, Charlottesville’s composite index is .6952, up from .6886 in 2020 to 2022. That’s one of the higher figures in the state, with the highest at .80. A higher composite index means that localities are expected to pay a larger share of education costs related to the state’s Standards of Quality, which set minimum staffing and other requirements for school divisions.
Albemarle County’s composite index is 0.6387.
Powell said that Charlottesville and other school divisions typically go beyond the SOQs in what they provide to students.
In the current fiscal year, the school system received $21.38 million from the state, which comprised 23% of the division’s revenues, according to budget documents. The total operating budget was $94.3 million.
Powell said the actual impact of the LCI change can’t be assessed until the Virginia Department of Education releases a calculator tool for each of the state budget proposals. Gov. Ralph Northam formally presented his two-year spending plan Thursday, which is the first of those proposals.
He already announced plans to raise teachers’ salaries by 10% over the course of two years, though localities would have to pitch in as well for educators to receive that full amount.
The House of Delegates and state Senate will likely have their own budget proposals before the General Assembly adopts a budget that will ultimately need the approval of Gov.-elect Glenn Youngkin.
The state funding formula for the next two years doesn’t take into account current enrollment dips that schools have experienced during the pandemic. Charlottesville has just under 4,000 students in kindergarten to 12th grade, which is up slightly from last school year. However, enrollment has not bounced back to pre-pandemic levels, when the division had more than 4,300 students enrolled.
Powell said that the enrollment changes will eventually have a negative effect on the city’s LCI and will be factored into the formula for fiscal years 2024 to 2026. That coincides with when millions of federal funding provided during the pandemic will expire. However, with other school divisions experiencing a drop in enrollment, the state could decide to hold schools harmless meaning their state funding wouldn’t be affected.
Schools Superintendent Royal Gurley Jr. said that his leadership team is looking through budget requests as they develop a funding request for the coming fiscal year. As in previous years, the board will hear initial details about that request during a lengthy work session on Saturday, Jan. 15.
“I think the thing for us is that we will find a path forward,” Gurley said, adding that public schools require a lot of money. . “… We rely on those [grants] heavily like Title I and all these other grants. When we come back, you’ll see that we’ve been very thoughtful in what we’re proposing.”
For the current operating budget, the school division relied heavily on federal funding to pay for new positions such as social workers and nearly $5 million in new spending.
Powell said that one question during the budget development cycle will be how the division transitions from the one-time funding to a more sustainable revenue source. The school division has about $10 million in federal stimulus money that hasn’t been budgeted yet.
Division officials also are awaiting information from the city about the local appropriation to the schools, which was $58.7 million in the current fiscal year. Historically, the school system has received at least 40% of new real estate revenue, though the School Board typically requests additional funding.
City Councilors and staff members have mentioned rethinking the funding formula as part of conversations about paying for the renovation and expansion of Buford Middle School, the first phase of the city’s so-called reconfiguration plan.
“It’s really important that we have some good information early so that we can present you with the best information possible so you can make the best decisions possible to ensure smooth transitions,” Powell said. “… I know it’s kind of an overused term, but we are in unprecedented times, and so we have to look at things differently.”
Overall, the board has said reconfiguration is a priority during this budget cycle along with supporting student programs and ensuring that staff pay and benefits are competitive.
“I appreciate the work in front of us and the questions of how we are going to make this budget happen,” board chairwoman Lisa Larson-Torres said.