e Recorder
(Graph courtesy the Virginia Department of Education)
MONTEREY — Funding public schools is a convoluted process, and localities have little control over how much they spend. Crafting the school system’s budget is further complicated when the state doesn’t release a final budget until months after school divisions and localities must finalize their budgets.
Highland County Public Schools receive extra support through “yoking” with Augusta County, saving local taxpayers money.
HCPS superintendent Dr. Drew Maerz gave a presentation to the Highland County Board of Supervisors last Wednesday, Feb. 21, as the school and county begin budget preparations.
“A lot of this is determined by the General Assembly saying what we must have,” Maerz explained.
Virginia’s constitution requires the Virginia Department of Education to formulate Standards of Quality for public schools. The General Assembly determines the cost of the SOQs and apportions that cost between the state and localities.
The SOQs indicate the required number of instructional positions, some support positions, and support costs for things such as supplies and utilities.
SOQ funding is allocated mostly on a per-pupil basis in the accounts for: basic aid; special education; career and technical education; prevention, intervention, and remediation; gifted education; English as a second language; remedial summer school; fringe benefits for funded instructional positions; sales tax — 1.125 percent is dedicated to public education; and textbooks.
Historically, Maerz said, Virginia scaled back in 2008 due to the recession. “The state removed vast numbers of support positions,” he said.
How much a school division can pay, as determined by the state’s funding formula — the local composite index — is calculated using three indications of a locality’s ability to pay: True value of real property (weighted 50 percent); adjusted gross income (weighted 40 percent); and taxable retail sales (weighted 10 percent).
“Each locality’s index is adjusted to maintain an overall statewide local share of 45 percent and an overall state share of 55 percent,” Maerz said.
School enrollment and the county’s population are also major factors. “Obviously, we are the smallest division in the state,” Maerz said, with about 200 students.
This year, Highland’s LCI was calculated at .80. “That is the highest you can have,” Maerz said.
“Our share will pay 80 percent of that bill, and the state will only pay 20 percent. If we weren’t yoked, we’d be in real financial trouble.”
Because Highland is yoked to Augusta County’s index, Highland’s LCI for 2023-24 was .7745 instead of .80.
That yoking results in a one-time cash payment from the state each year for supplemental basic aid. That figure for this year was $490,291.
In addition to the basic aid departments, there are also incentive programs for public education, such as compensation supplements, at-risk programs, and technology. “It’s about a 50-50 split for incentive programs,” Maerz said.
The school board’s biggest challenge is that it must create a budget request to present to the county by April 1 without knowing what the state budget will require the local schools to match. The county finalizes its budget, including funding for the school, in June.
Last year, the state did not finalize its budget until the end of the summer.
This means Maerz and the school board must make their best guess based on preliminary budget proposals released by the governor, Senate, and House.
So far, the governor has released a proposal for next year that shows the state funding at $2,426,093 and the county funding at $3,099,079. The governor’s proposal does not include a salary increase but does include a one-time bonus for staff.
The Senate and House proposals were not fully detailed by the time Maerz made his presentation to supervisors, but the House budget proposes a 3 3/8 percent salary increase while the Senate proposes a 3 percent salary increase.
Maerz said the problem is that if the county doesn’t match whatever raise the state finally approves, it won’t get any state funding for the raises. He expects some compromise on raises to be included in the state budget. “I’m going to guess that 3 percent is not a bad number to go with,” he said, adding that he expects that’s the figure the school board will ask the county to approve.
Maerz said the most significant portion of the school budget is staffing. The state basic aid formula says the state pays 20 percent of the 36.87 positions it requires. The school currently has 62.15 positions, including teachers, bus drivers, and support staff.
“We are not overflowing with staff people,” Maerz said. “A lot of people are wearing multiple hats.”
Health insurance is another high cost. Maerz said the actual increase for next year may not be finalized before the school submits its budget request, creating another guessing game.
Last year, Maerz and the school board submitted a request that was less than the final total the state budget passed.
The school board will hold work sessions to craft its budget at 6 p.m. on March 18 and March 25.