The Rappahannock County School Board offered its support last week to the Orange County school board’s petition to Virginia legislators that they reconsider Senate Bill (SB) 1096, which would redefine the way the state’s local composite index (LCI) is determined.
If successful, tweaking the LCI calculations could drastically affect how much state funding Rappahannock — and rural communities throughout the state — receives each year.
The LCI is a formula that determines a school division’s “ability to pay” education costs fundamental to the commonwealth’s Standards of Quality (SOQ). It’s used to determine how much the state will pay and how much the locality will pay.
The index is calculated using three indicators of ability-to-pay: True value of real property (weighted 50 percent); adjusted gross income (weighted 40 percent); and taxable retail sales (weighted 10 percent).
The most heavily weighted of those indicators would change under SB 1096, however, as the bill directs the Virginia Department of Education (VDOE) to use actual, local assessments of real property — which take conservation and agriculture-related discounts into account — instead of the true value.
In a letter to Rappahannock’s representatives in Richmond, Del. Michael Webert and Sen. Mark Obenshain, superintendent Donna Matthews pointed out that, “had it been effective during the 2012-14 biennium, RCPS’ LCI would have been reduced from .80 to .69, yielding an increase of $200,599 in state basic aid.”
Rappahannock County’s LCI has been at .80, the highest level an LCI can be, for most of the past decade. Rappahannock also has — by far — the highest LCI of any of the surrounding counties: Fauquier’s composite index is .55, Madison County enjoys a .45 and Culpeper sits at .36.
As county administrator John McCarthy explains, if a property in Rappahannock is assessed for $1 million, the state assumes that entire amount can be taxed. However, as is often the case in Rappahannock, if a portion of that land is protected by land-use laws, the actual assessment falls. The LCI, in its current construction, does not account for that protected portion and taxes the full value regardless.
Restructuring the plan wouldn’t just affect the school system, however, McCarthy said. While the LCI was originally designed to govern school-based funding, it has, over time, come to cover other areas, including the sheriff’s office and the county’s share of Comprehensive Services Act costs, McCarthy said.
SB 1096 was introduced to the General Assembly in January 2013 by Sen. Emmett W. Hanger, Jr., where it was briefly referred to the Senate’s health and education committee before it was “tabled indefinitely” by the Senate. As Matthews pointed out to the board at its Jan. 14 meeting, there was very little support for SB 1096 when it was introduced last year, as using local assessments for land values would likely decrease the funding for many of Virginia’s bigger, more urban districts.
“However, those of us in rural localities could make the argument that taxable value of property would acknowledge those areas which participate in the state-approved land use and scenic easement tax exemption programs,” reads Matthews’ letter.
“In our opinion, the current LCI formula punishes localities that place a priority on the preservation of farms, green spaces and forests.”
McCarthy agrees: “Everyone who represents Rappahannock County always says they’re committed to protecting open space. Well, this is how you protect open space.”
Former school board member Rosa Crocker expressed her support for Matthews’ resolution during the public comment section — and urged the public to “get behind it” with the board members. Crocker said it was an issue she had raised during her years on the board and commended the current administration for continuing to push it. “It’s a critical issue for this area,” Crocker said, “and it’s important to keep asking.”
Nevertheless, while it might seem like a no-brainer to rural communities like Rappahannock, McCarthy admits he’s “not optimistic” about the possibility of SB 1096 passing.
“It’s an important issue and it’s absolutely worth supporting,” he said, “[but] anytime you divide that pie so that we get more while other districts get less . . . That’s where the political calculus falls apart.”
After the discussion at their meeting, each school board member signed two letters — one to Webert and one to Obenshain — pledging their support for reconsideration of SB 1096.