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Overhaul of Virginia’s education funding formula underway

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Crixell Matthews
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VPM News File
State Sen. Ghazala Hashmi (D-Chesterfield) speaks during a 2019 Democratic watch party.

The equation hasn’t been fundamentally changed since the 1970s.

Virginia lawmakers are beginning to recommend changes in a push to overhaul the state’s main K-12 education funding formula following a report released last July that found it drastically underfunds public schools’ needs.

If the Standards of Quality formula’s recommended spending lined up with what’s actually spent on education in Virginia, state funding would increase by 45 percent or $2,700 per student, according to the Joint Legislative Audit & Review Commission report. The commonwealth also spends less on education compared to neighboring states.

“We found quite a few problems with the formula,” said Justin Brown, an associate director with JLARC, who worked on the report. “It underestimates — by a lot — how many staff school divisions need.”

For example, the report found that it estimated divisions needed 113,500 full-time employees to staff K-12 schools across Virginia in Fiscal Year 2021. In reality, divisions employed 171,400 staff that year — 51 percent more than estimated — to work across instruction, support and administration roles in public schools. That means localities often spent their own dollars to make up the difference.

“The state is not providing its share of the cost of a high-quality education for Virginia students,” said Laura Goren, research director at the Commonwealth Institute for Fiscal Analysis. “And that is shown a number of different ways in the report.”

The formula also underestimated realistic staffing ratios for English language learners and students with special needs — and per-student funding for English learners and students in poverty have not returned to pre-recession levels following 2009 budget cuts.

Over the past decade, state funding for special education has also declined — while increasing for other groups. Sen. Suhas Subramanyam has filed legislation tasking multiple state agencies with developing a plan to revamp staffing requirements for special education.

According to Virginia’s Constitution, state lawmakers “shall seek to ensure that an educational program of high quality is established and continually maintained.” Much of that comes down to funding. And to guarantee a quality education for all Virginia students, JLARC recommended moving other funding streams, including the at-risk add-on, into the main funding formula.

Currently, the at-risk add-on — the state’s main funding program for schools with high levels of concentrated poverty — is considered supplemental funding. Sens. Lashrecse Aird and Danica Roem have sponsored legislation to move it and related programs into the main formula so all divisions will be required to participate.

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VPM News
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File
Sen. Schuyler VanValkenburg

Other lawmakers, including Sens. Schuyler VanValkenburg and Ghazala Hashmi, have filed legislation seeking to remove the artificial cap on state funding for support staff that legislators added during the Great Recession; JLARC estimated that this recession-era decision has resulted in a reduction of over $300 million in annual state dollars to this day.

Denise Harrington, a retired educator who worked in Virginia public schools for over three decades, is advocacy director for the League of Women Voters of Virginia and part of the Fund our Schools campaign. She said the support cap has tied the hands of school divisions: They have to hire so many people with a limited amount of funding that some can’t afford to pay “vital” teaching assistants very much.

“It was always hard to have good and consistent [staffing of teaching assistants],” Harrington said. With the support cap removed, she said “school divisions will be able to offer a little more of a living wage.”

Gov. Glenn Youngkin said he knows “we can all agree that we can do so much better than the current SOQ funding formula” in his recent State of the Commonwealth address.

He added that his administration is committed to “meet and beat” the November 2024 deadline for a special legislative workgroup to “deliver a plan to replace the Byzantine SOQ system with a system that puts students first.”

Moving from a staff-based to a student-based formula is another one of JLARC’s recommendations; Virginia is one of only 9 states that uses a staff-based formula.

While some of JLARC’s recommendations will require further study and consideration, some of the short-term solutions might be addressed this year.

Richmond Public Schools would like to see multiple reforms, including changes to a separate formula — called the Local Composite Index — which determines the local share of education funding districts are responsible for. The district supports JLARC’s recommendation to add another year of data before recalculating it, so school divisions can avoid the “sticker shock” that can come with unexpectedly large shifts in funding based on changes in enrollment, general population, real estate value, resident income and retail sales. Legislation has been proposed to address this issue.

Matthew Stanley, RPS director of advocacy and outreach, said that recent multibillion dollar increases in Richmond’s property values and resident incomes — combined with a decline in student enrollment — has led to a sudden loss of about $10 million in state funding for the district.

“That's just a huge deficit in funding that we're now expected to absorb in just one year, especially at a time when we're dealing with the end of federal stimulus money,” Stanley said.

Jason Kamras, the district’s superintendent, will present a proposed budget for the next fiscal year to the school board on Monday.

Stanley said another proposed change to the LCI would also help the district — ensuring the population of the city and the population of the school division are weighted equally; right now, the school population receives a higher weight. Giving them equal weight would better ensure the formula accounts for all of the other services the city of Richmond has to provide residents — in addition to schools.

Because right now, Stanley said, “if the ratio is showing that we have a higher percentage of kids [in the city of Richmond] that are not going to the public school system, then it makes it look like the locality can better afford to pay for the students that it does have.”

Corrected: January 20, 2024 at 9:27 AM EST
The elected offices held by Sens. Lashrecse Aird, Suhas Subramanyam and Danica Roem were misstated in a previous version of this story.
Megan Pauly covers education and health care issues in the greater Richmond region.
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