Virginia Local Ability-to-Pay Calculation and State Contributions to Public Schools — Some Surprises

by James C. Sherlock

Some things are very important that the average citizen knows little to nothing about.

For example, a complex state computation, the Composite Index of Local Ability to Pay, determines how much state money per student goes to your school district to maintain an overall state ratio of 55% state and 45% local.

The lower your district composite index of ability to pay, the more money per student your district gets.

You will find some big surprises in the list of school division indexes, or at least I did.

My home division of Virginia Beach did not make the top 20 highest indexes, while the City of Richmond did. Fredericksburg is a top-20 division. Stafford County is in the lower middle group. Bath County has the third highest index out of 133.

The composite is a rules-based calculation of an index based on:

  • true value of property,
  • adjusted gross income (including and excluding non-residents);
  • taxable retail sales,
  • Average Daily (Student) Membership (ADM); and
  • total population.

All of those factors are listed for each of 133 school divisions.

The lowest index, thus the lowest ability to pay and the highest per-student reimbursement is Lee County at .1692. Lee County receives almost 5 times as much money per student from the state as the highest index school divisions.

The index is capped at .8. Those localities get the lowest reimbursement per student. Those with the maximum composite index are Alexandria, Arlington, Bath County, Fairfax City, Falls Church, Goochland County, Highland County and Surry County.

I have color coded the locality names on the spreadsheet by top 20 highest composite index, upper middle, lower middle and bottom 30.

You will find one political note at the bottom.

” The actual composite index to be used for Bedford Co. in the 2020-2022 biennium is .3132 pursuant to the appropriation act and Section 15.2-1302, Code of Virginia.”

That is a huge drop from what would have been calculated, resulting in a lot more money to Bedford schools.

The applicable state law is § 15.2-1302. Certain Commonwealth distributions to localities. It appears to be part of the effort to encourage consolidations.

  • It preserves the higher of two state payments calculations for 20 years in the event of a consolidation that transforms two entities into one, as in the case of Bedford.
  • In the case of the semi-consolidation of Martinsville and Henry County in which Martinsville sheds its constitutional officers and independent school division, the preservation period is 15 years. Those two entities have composite indexes that are almost identically low, both in the bottom seven, so there will be no real advantage in that consolidation for state contributions to any program.

Every state has its own way of doing things. I guess the drafters of the federal Constitution figured that out well before we did.