How the state provides Loudoun schools with funding was the issue of the day Thursday at the School Board’s annual legislative breakfast.
“If our composite index was the same as Prince William County’s, we wouldn’t need a budget session,” said School Board member John Andrews (Potomac) when he, other board members and school staff addressed their concerns with state Sen. William “Bill” Mims (R-33) and Delegates Richard “Dick” Black (R-32), Joe May (R-33) and Thomas “Tom” Rust (R-86).
“We will receive $8 million less than projected. Even more glaring is the amount we receive per child. It’s almost a 10 percent cut,” Andrews said. “There’s a continuation of the deterioration of the amount of money Loudoun is getting from the money sent down there.”
In Fiscal Year (FY) 2005, the public schools expect to lose $14.5 million in state funding through the composite index formula and gain $6.2 million for additional enrollment, leaving a revenue loss of $8.3 million.
STATE FUNDING to schools is determined through the composite index. The index begins with an average cost per pupil determined by the state, which for FY 2004 is $5,850 and is expected to be $6,151 in FY 2005. A percentage of that cost per pupil is given to each locality based on its relative wealth, which for Loudoun is estimated at $1,840 in FY 2004 and $1,710 in FY 2005.
The composite index redistributes the wealth to the less wealthy areas of the state, in essence helping localities in the southern side of southwestern Virginia fund education. As the county receives less back from the state through the composite index, the Board of Supervisors has to increase the share paid by local taxpayers in order to fund the costs of education.
This year, the School Board faces a $101 million proposed increase from last year’s budget as it continues deliberating the $491.57 million budget for FY 2005. Forty percent of the increase is intended to accommodate more than 3,000 new students in fall 2004, when student enrollment is expected to increase to 44,000 students, as outlined in Superintendent of Schools Edgar Hatrick’s proposed budget.
Hatrick asked for an adjustment to the composite index to allow for the impact growth has had on localities. “Without messing with the formula, if we want Loudoun County to be a cash cow for the state … we need help,” he said.
In response, Mims said an effort in the early 1990s to reform the composite index “never got off the ground.” “If we change it, we create more legislative losers than winners,” he said.
Northern Virginia is already seen as being “financially capable,” May said. “This is not a good time for the state to step up … from the revenue front.”
THE STATE’S REVENUE took a hit from a decrease in the amount it received from state income tax returns during the nation’s economic downtown. Any increase in the economy takes 12 to 18 months before it begins showing up in the state coffers, May said. “In September, we’ll start seeing the first money coming in. … We’ve done our best to see that education is not affected,” he said, adding that education constitutes 40 percent of the state’s budget.
“This year is going to be very tight on dollars,” Black said. “Education is our top priority. To the extent we could help anybody, we helped the public school system.”
However, Black expects the budget situation to eventually improve. “Next year, I believe we’ll see significant increases. I think we have better days ahead,” he said. “This year, it’s not likely we’ll bring revenues up.”
“State revenues drag behind. You’ll see a much better second year,” Mims said, adding that by February, the board “will have a much better sense of what year two will look like. Year one will be much the same.”
The School Board asked the legislators to look at the financial impact state mandates have on schools. “There’s nothing in … the budget to address the new standards of the [state] Board of Education,” Hatrick said.
“We’re struggling with programs here other counties take for granted,” said School Board member Thomas Reed (At large) about the county’s placing at the top of the composite index for relative wealth.