Virginia’s public schools are funded by a combination of local, state, and federal sources. However, the way the state determines how much money each school division should receive has been criticized for being outdated and inequitable. A recent report by Cardinal News revealed that 22 localities in Virginia have more ability to pay for their schools than the richest county in the U.S., according to the state’s funding formula.
What is the State Funding Formula?
The state funding formula is based on the Standards of Quality (SOQ), which are the minimum requirements that Virginia public schools must meet. The formula calculates the number of staff and the cost of those staff that each school division needs to provide an adequate education. The state then pays a portion of that cost, and the localities pay the rest, based on their ability to pay.
The ability to pay is measured by the Local Composite Index (LCI), which takes into account three factors: the true value of real estate, the adjusted gross income, and the taxable retail sales of each locality. The LCI ranges from 0.2 to 0.8, with lower values indicating less ability to pay and higher values indicating more ability to pay. The LCI is updated every two years, based on the most recent data available.
How Does the Formula Favor Some Localities Over Others?
According to the Cardinal News report, the LCI does not reflect the current economic realities of many localities in Virginia. The report found that 22 localities have a higher LCI than Loudoun County, which is the richest county in the U.S., with a median household income of $142,299 in 2019. These localities include some of the poorest and most rural areas in the state, such as Buchanan, Dickenson, Lee, and Wise counties.
The report attributed this discrepancy to several factors, such as the lag in the data used to calculate the LCI, the exclusion of other sources of income and wealth, and the lack of adjustment for the cost of living and the regional differences in the labor market. The report also pointed out that the LCI does not account for the varying needs of students, such as those with disabilities, English learners, or those from low-income families.
The report estimated that if the LCI were adjusted to reflect the actual ability to pay of each locality, the state would have to provide an additional $722 million to the 22 localities that have a higher LCI than Loudoun County. This would reduce the funding gap between the richest and the poorest school divisions in the state.
What Are the Implications of the Formula for School Quality and Equity?
The state funding formula has significant implications for the quality and equity of education in Virginia. The formula determines how much money each school division has to spend on teachers, staff, facilities, materials, and programs. The formula also affects the local tax burden and the fiscal capacity of each locality.
The Cardinal News report argued that the formula creates a system of winners and losers, where some localities can afford to provide more than the minimum standards, while others struggle to meet them. The report cited examples of how the formula affects the educational outcomes and opportunities of students, such as the student-teacher ratios, the teacher salaries, the graduation rates, and the advanced course offerings.
The report also highlighted the racial and socioeconomic disparities that the formula exacerbates. The report found that the localities with a higher LCI than Loudoun County have a higher percentage of students who are Black, Hispanic, or economically disadvantaged than the state average. The report claimed that the formula perpetuates the historical underfunding and segregation of schools that serve these populations.
What Are the Possible Solutions to the Formula Problem?
The state funding formula has been a subject of debate and reform for decades. The Virginia Board of Education, the Joint Legislative Audit and Review Commission (JLARC), and various advocacy groups have proposed different ways to improve the formula and make it more fair and adequate.
Some of the common suggestions include:
- Updating the data and the methodology used to calculate the LCI and the SOQ
- Incorporating other indicators of income and wealth, such as personal income tax, corporate income tax, or net worth
- Adjusting the LCI for the cost of living and the regional differences in the labor market
- Accounting for the varying needs of students, such as those with disabilities, English learners, or those from low-income families
- Providing more flexible and targeted funding for innovative and effective programs and practices
- Increasing the overall state funding for public education and reducing the reliance on local funding
However, any changes to the formula would require the approval of the General Assembly, which has the final authority over the state budget and the school funding. The General Assembly has been reluctant to make major changes to the formula, citing the fiscal constraints and the political challenges of redistributing the state funds.
The Cardinal News report urged the lawmakers and the stakeholders to reconsider the formula and its impact on the students and the communities. The report concluded that the formula is not only a technical issue, but also a moral and a constitutional one, as it affects the quality and the equity of education in Virginia.
