School Funding: Local Composite Index

School funding in the Commonwealth of Virginia is determined by the Local Composite Index, or LCI.  The LCI is a result of a Supreme Court of Virginia ruling which stated that the Virginia Constitution requires all children to receive, to the extent practicable, and equivalent education.  Thus, the Court ruled that some funding formula must be used to direct money to areas that can’t afford to educate children. (The Court did not say what the formula has to be only that some redistribution must occur). Consequently, the purpose of the LCI is to ensure less affluent localities are able to provide for their students. The LCI is a figure that determines how much a school system must pay for its own basic education. (“Basic Education” is a set of minimum standards. For example, math must be taught, but band does not.)  The LCI, has a cap of .8000 (a locality must pay 80% of its own basic education) but has no minimum. Only 27 out of 136 schools are required to pay more than 50% of their basic education (e.g. have above a .5000 LCI).

The LCI is calculated through a complicated formula. The formula attempts to determine which school systems can afford to pay more of their own basic education, and which systems cannot afford to pay. In determining who can pay, a formula has been developed which considers a bunch of different variables.

It’s complicated, but here it is: to calculate the LCI, fifty percent of the true value of real property, forty percent of the gross income, and ten percent of sales tax collections of each locality are totaled and then weighted two-thirds by average daily membership and one-third by population.

Average Daily Student Membership Component=
.5 [((Local True Property Value)/(Local ADM))/ ((Total Statewide True Property Values)/ (Statewide ADM))]

+.4 [((Adjusted Gross Income)/ (Local ADM))/ ((Total Statewide AGI)/ (Statewide ADM))]

+.1 [((Local Taxable Retail Sales)/ (Local ADM))/ ((Total Statewide Taxable Retail Sales)/ (Statewide ADM))]

Overall Local Population Component=

.5 [((Local True Property Values)/ (Local Population))/ ((Total Statewide True Property Values)/ (Statewide Population))]

+.4 [((Adjusted Gross Income)/ (Local Population))/ ((Total Statewide AGI)/ (Statewide Population))]

+.1 [((Local Taxable Retail Sales)/ (Local Population))/ ((Total Statewide Taxable Retail Sales)/ (Statewide Population))]

Local Composite Index =
((.6667 x ADM Component) + (.3333 x Local Population Component)) x 0.45

Every two years the LCI is recalculated as all of the information can change.  The LCI for Fairfax County Public School for 2008-2010 is .7657.  This means that Fairfax County must pay 76.57% of its own basic education. Or, in other words, out of every $100 in public education costs, Fairfax County pays $76.57 while the state pays $23.43 for public education.

There are 136 localities and out of all of those only 10 have an LCI higher than Fairfax County. These ten are Arlington (.8000), Bath (.8000), Goochland (.8000), Rappahannock (.8000), Alexandria (.8000), Falls Church (.8000), Fredericksburg (.7943), Williamsburg (.8000), Fairfax City (.8000), and Lancaster (.7824).  On the other end, Lee county has an LCI of .1552 (only has to pay 15.52% of its own basic education), Sussex County has an LCI of .2799 (only has to pay 27.99% of its own basic education), Danville has an LCI of .2394 (paying 23.94% of its own basic education.

The total LCI list for 2008-2010 can be found at http://www.doe.virginia.gov/VDOE/Finance/Budget/composite.html. To see a map of all localities and the range of Local Composite Indexes, check out http://www.doe.virginia.gov/VDOE/Finance/Budget/2008-2010CompositeMap.pdf.

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2 responses to “School Funding: Local Composite Index

  1. Pingback: Town Hall meeting with State Senator Chap Petersen « Delegate Keam

  2. Pingback: Anti-BVBL » Kaine and McDonnell Axe NoVA Schools

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