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Virginia Budget May Underfund Poor Schools, Overfund Rich Ones

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The COVID-19 pandemic has had an unprecedented effect on public school enrollments, forcing lawmakers to grapple with how to supplement a funding formula based on enrollments. (Photo: Tima Miroshnichenko)

This story was updated after legislators released a new budget draft.

Schools throughout Virginia have seen a decrease in student enrollment during the pandemic, as many students face attendance barriers, and some parents withdraw their children from the public education system in favor of homeschooling or private schools.

The sudden enrollment declines automatically triggered budget reductions to a range of critical school programs. Gov. Ralph Northam’s proposed budget, put forth in December, suggests cutting around $27 million statewide for special education, $20 million for English language learners and $6 million for prevention, intervention and remediation programs over the next two years.

Northam is proposing to offset these losses with an extra $514 million over the next two years as part of a “No Loss” plan that gives districts extra funding to make up for state cuts. State education experts say that amount is “unprecedented,” an appropriate response to the unprecedented impact of the COVID-19 pandemic.

The more students a division is projected to have, the more money it would get. But some local school officials are worried lawmakers are relying on the wrong data. Bristol Public Schools Superintendent Keith Perrigan, the president of the Coalition of Small and Rural Schools of Virginia, says lawmakers are using projections that undercount students at many schools.

“Unfortunately, the divisions that hurts the most are many rural divisions, and almost always high-poverty school divisions,” he said.

He says they should compare the latest enrollment figures from the fall to those from March 2020, right before schools closed for the pandemic. Instead, they’re using 2019 projections of what enrollment would look like in the fall of 2020.

“Because of that simple little change, it has a huge impact on a lot of school divisions who will receive less money because the projections were off in the first place,” Perrigan said.

One district facing some of the largest potential losses is Hopewell City Public Schools. By last spring, they had already exceeded their 2019 projections. They were on track to have dozens more students than expected last fall, but then the pandemic hit.

Hopewell still ended up with two more students in the fall than predicted in 2019, but this doesn’t take into account the impact of the pandemic, which led to the district losing 50 students. That is why advocates say the actual student count from March paints a more accurate picture.

Using 2019 projections, Hopewell schools could lose out on $1.6 million dollars of No Loss funding. That’s $431 dollars for every student.

Perrigan says this miscalculation will hurt rural counties and poor school divisions the most. Data shows that across the 20% of school districts with the highest child poverty rate, per-student funding would drop by about $39. His own district is set to lose out on $70,000 dollars.

“That's a lot of money for a small school division like Bristol,” he said.

Meanwhile, more affluent school districts seem to benefit from lawmakers using the 2019 predictions. School districts with the lowest child poverty rates would gain around $46 per student. Chad Stewart with the Commonwealth Institute says that’s because richer schools have historically had more accurate enrollment projections.

Chesterfield, for example, would gain an extra $5 million, and Prince William County in Northern Virginia would get nearly $10 million. At this point, those districts would lose that funding if lawmakers turned to using the March numbers.

“There are winners and losers from using either benchmark,” Stewart says. “So the most equitable approach in our mind is to take the best of the two for divisions. It would have a budget impact of about $20 million.”

Advocates say $20 million would be a small price to pay since Virginia saw an unexpected tax revenue surplus of $730 million last year.

But based on lawmakers’ latest budget draft, they may actually head in the opposite direction. 

In what may be their final version of the budget, members of the House and Senate agreed Thursday evening to decrease total No Loss funding by about $70 million. In their explanation, they cite “other actions, including the sales tax update, increased Infrastructure and Operations Per Pupil Payments, and technical updates.”

The General Assembly is expected to vote on the final budget over the weekend, before it goes to the governor’s desk.

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