The budget cycle has been pretty much the same for decades, and spring is the time of bickering and finger pointing. “Why do you want so much?” “Why are you taking from our programs and kids?” “Other programs need money too.” “Your system is top heavy.” “We deserve a professional wage.” “Why are taxes so high?” And the circular accusations and pleadings go around and around.
But what are the sources of our repeated dilemma and how might we finally and with some clarity begin to resolve the worst angst and agony? Here are some of the main reasons budget season is so difficult.
The Philosophical Divide
The Constitution of Virginia requires that a “high quality education” be provided for all Virginia’s children. Some believe the best way to provide that is for the government itself to publicly fund schools through collaboration between local districts and the state. Others believe that the best source of a high quality education system is free-market capitalism which provides public dollars to independent companies.
These are the mind-sets which legislators and Governor Youngkin struggle with right now. It’s not just about how much we should spend on schools. It is about the very type of schools we will have and literally whether all students should have full access to the same quality or the market should drive where resources go.
The Dillon Rule
The Dillon Rule is a principle that restricts local governments by declaring they only have the powers directly bestowed by the state government. The Dillon Rule means a county or town cannot levy taxes or new policies unless the state gives them express permission to do so. The effect is that many of the ways by which a locality could raise money for their schools, such as hotel, restaurant, or entry fees, and even penny sales taxes cannot be levied. This leaves localities with only property taxes as a means to fund expenses, thus districts with lower property values or large carve outs for non-taxable properties with less money for their schools. The Dillon Rule essentially ties the hands of local county and city boards, while Governor Youngkin vetoed permission for a penny sales tax option for localities this year.
The Composite Index (LCI) and Costs of Living
The Virginia formula that determines how much the state will cover is the Composite or Ability to Pay Index. For many districts this formula means Virginians in their district will pay more while the state pays less. The districts who lose the most because they are deemed “able to pay” are those in urban centers like northern Virginia, the Newport News triangle and Richmond. Arlington, considered one of the districts most able to pay, received $3,113 per pupil in SOQ funds in FY2022.
The Cost of Living is a perennial frustration. All the employee raises offered by the state require local districts to produce matching funds; therefore, few of the increases offered across the last 30 years have resulted in employee raises that even met general inflation rates.
The Unfunded Mandate or Carrot-and-Stick Method
There are few initiatives of recent years that don’t fit under this umbrella of policies. It has become the default that localities will be required to match or completely fund any new initiatives.
For instance the Virginia Literacy Act of two years ago requires all local districts to reconfigure their Pre-K-Elementary language arts classes and retrain all their elementary teachers to use the new literacy materials and practices. The cost of that re-adoption, just of the materials, for Fairfax County, the state’s largest district, is $25 million, while most of the state funding for the implementation is going to consultants and district-level coaches rather than local classrooms.
IDEA is perhaps the most notorious unfunded mandate. IDEA is the federal law establishing requirements for special education, which has never been fully funded. The cost to provide for IDEA students is 150% of that for non-IDEA students. Neither the federal nor the state have ever met that full cost.
Standards of Quality (SOQs) establish which basic courses must be offered and the basic staffing requirements for accredited schools in Virginia. Almost every district in Virginia pays for more staff and services than required by the Standards of Quality, and the state has never fully funded the basic SOQs. Districts receive no credit for the sums they pay beyond the core courses in the SOQs, nor do they receive off-set for extra electives or services that raise the quality or ratings of Virginia’s education system.
Testing and Data Collection has required that Virginia spend approximately $37 million a year for roughly 26 years. This is just to buy standardized tests administered to Virginia students, but does not budget for the cost of computers, training, wi-fi, or staffing such testing requires. Districts are on their own for these costs.
Individually, these requirements seem reasonable to lawmakers and the Governor, but taken together they create a major funding dilemma almost every year for localities around the Commonwealth. The JLARC study of 2022 on school funding had ideas for and urged major changes in the funding formula and practices Instead of moving forward with changes, the legislature voted for a study of their study, and Governor Youngkin vetoed virtually all of the funding options and changes that could have altered this year’s finger-pointing festival.
Before considering inflation, the governor’s budget appropriates $156 million less in FY25 and $138 million less in FY26 compared to current-year General Fund appropriations to Direct Aid for Public Education. That’s almost $300 million less across the two-year budget, and is a 1.7% reduction in FY25 and a 1.5% reduction in FY26. - The Commonwealth Institute, January 2024
This year instead of pointing at one another, stakeholders might want to turn their fingers to the Governor’s mansion and urge the legislators to hold their ground on supporting JLARC recommendations and school funding.