Schools face more cuts as McDonnell moves to change index

Central Virginia school districts are facing a cut in state education funding, after Gov. Bob McDonnell said Monday that he will support updating the index that determines how much state money each school system receives.

It’s a departure from the introduced budget left by outgoing Gov. Timothy M. Kaine, who proposed freezing the local composite index for one year.

That proposal rattled some Northern Virginia localities, which would have lost about $128.3 million in state funding, according to McDonnell’s office.

But Northern Virginia’s gain is Central Virginia’s loss.

Local school divisions, already grappling with big budget deficits, have been holding their collective breath on whether the composite index would change for the 2010-11 school year.

Schools in Lynchburg and in Amherst, Appomattox, Bedford, Campbell and Nelson counties all stand to receive less in state money should the freeze be lifted, according to data on the Department of Education’s Web site. The exact amounts were not available Monday.

“This is not good news for us,” said Lynchburg City Schools spokeswoman Leigh Farmer, though she added that the division has not yet calculated what the loss would be.

All the division’s budget projections so far have been made based on a frozen index, so the change would likely widen a budget gap projected to be more than $8 million and possibly as much as $10 million, she said.

Bedford County schools also would face a reduction in money from the state on top of already massive cuts, Bedford County Administrator Kathleen Guzi said Monday.

Guzi said the county had hoped the state would hold off on changes to the composite index. The school system, which has 21 schools and 1,700 employees, has been projecting more than $5 million in state, federal and local cuts prior to Monday’s announcement as it puts together its 2010-11 budget.

The index is a complex formula that the Virginia Department of Education uses to determine how much funding to give to each of the state’s 134 school divisions. It’s an ability-to-pay system, based on each locality’s daily average attendance, overall student enrollment, real estate values and retail sales tax.

In other words, the higher the index, the more wealthy the locality and therefore, the less state money the school division receives. The newest index is based on data from 2007.

McDonnell said in a release Monday that for nearly 40 years the index has offered an “impartial means” by which to determine state and local shares for funding, and that local officials understand the fluctuations.

“Ensuring that we have a fair formula that is implemented without regard to temporary or political considerations is the best means by which to appropriate education funding in the commonwealth,” McDonnell said. “Every time the index is readjusted some school systems gain funding, while others receive less.”

To cover the $29 million that the change in the formula will cost the state in fiscal year 2011, McDonnell will recommend that the legislature transfer money from the Literary Fund, balances in the Health Insurance Fund to reduce state health insurance premiums, Real ID savings and the non-general fund.

The index announcement is part of the governor’s ongoing budget recommendations. His proposal still has to pass muster with the General Assembly.

Richmond Times-Dispatch staff writers Olympia Meola and Holly Prestidge; and The News & Advance staff writers Jessie Pounds and Justin Faulconer compiled this report.