Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, November 3, 1995 TAG: 9511030097
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: JOEL TURNER STAFF WRITER
DATELINE: LENGTH: Medium
Roanoke County will lose $800,000 a year, beginning in the 1996-97 school year, Franklin County $486,000, Pulaski County $324,000, and Botetourt County $300,000.
All other localities in the region will lose some state funds. Roanoke faces a cut of $50,000.
Some localities might receive a net increase in state money because of higher enrollment and per-pupil allocations. But their increases will be less than they would have been otherwise.
The counties and cities will have to pay a larger percentage of the cost for schools, with a corresponding decrease in the state's share.
The reverse will happen in several localities in Northern Virginia: They will get more state money for schools.
Fairfax County expects to receive an increase of $8.3 million in state aid for education because of changes in the real estate market and other local economic conditions, said Jeffrey Weiler, coordinator of the revenue budget.
School officials in Western Virginia said the reduction in state funds will make their job tougher, but it's too early to say whether school cuts will be necessary.
"It is a significant loss," said Walter Shannon, business manager for Pulaski County schools. The reduction in state funds is larger than the expected increase in county funds, he said.
"It hurts. You might have an enrollment increase and get more state funds for that, but you are still facing higher costs," said Lee Cheatham, business manager for Franklin County schools.
Jerry Hardy, director of budget and data management for Roanoke County schools, said the county's loss of $800,000 a year will increase financial pressures on the schools.
Botetourt County hopes to make up most of its loss with an increase in enrollment, but "even if we stay about even, we will face higher costs next year," said Rod Dillman, assistant superintendent for finance.
State aid for schools is linked to a locality's wealth and financial ability to share the cost for education.
In distributing education money, the state uses a "local composite index" that takes into account each locality's ability to pay. The index is based on a weighted measure of each locality's true value of real estate, personal income, taxable retail sales, school enrollment and population.
The index is the percentage of the cost for schools that a locality must pay. One is calculated for each locality.
In Western Virginia, most localities pay between 30 percent and 45 percent of school costs. Lee County has the lowest index: it pays 17 percent and the state pays 83 percent.
In Northern Virginia, many affluent jurisdictions pay between 70 and 80 percent of education costs.
The state has capped local costs at 80 percent; it pays the other 20 percent regardless of a locality's ability to pay.
The local composite index is recalculated every two years to take into account changes in real estate values, taxable sales and other measures of a locality's ability to pay.
"The decline in the real estate market in Northern Virginia definitely had an impact on the rest of the state," said John Rickman, a budget specialist with the Virginia Department of Education.
Rickman said the conditions in the real estate market overshadowed changes in personal income, retail sales and other measures of ability to pay.
The slump was so deep that it caused real estate values in the state as a whole to decline, he said, even though values in Western Virginia and many other areas continued to increase.
In the calculations for the local composite index, the growth in real estate values in a locality is compared with the increase in values statewide. If a locality's real estate values rise faster than the state as a whole, Rickman said, that can cause its index to increase.
That's what happened to localities in Western Virginia and many other areas.
The new indexes are based on financial indicators in 1993, the last year for which data was available.
Although the state will pay a smaller percentage of the costs of education in Western Virginia in the next two years, Rickman said, that will be more than offset by a higher share of costs in Fairfax County and other jurisdictions.
"When Fairfax County and other localities like that go down, it costs us Big money," he said. "On the whole, it is costing the state more money."
by CNB