Before carping about the amount of money local governments spend on schools, naysayers ought to appreciate the basis for what drives the cost of public education in Virginia.  In a nutshell, here’s how it works.

The state and federal government set standards that are constantly more difficult – and expensive – to meet.  The state then sets out a funding formula that lowballs its share of meeting those costs.  And local governments – which mean local property taxpayers – get stuck footing the largest part of the bill. 

A recent column by Robley Jones in Virginia Tomorrow implied that local governments should be doing even more.  This column also implied that $365 million in federal education stimulus funding given to the state should prevent any reductions in school budgets.  These misguided notions fail to take into account the state of the economy.          

Get real. 

The United States is in the midst of an economic meltdown of historic proportions that will soon have an estimated 10 percent of working-age Americans in unemployment lines.  State and local government revenues are being pummeled, which means cuts in services are inevitable.  Education is not immune.

The state reduced its funding for public education by more than $600 million, or about 10 percent, in FY 2010.  Even by using the $365 million in federal stimulus money to partly offset this reduction, the state will reduce its support for education by $235 million next year.  The state took this step after its revenues plunged.

Local governments are in the same boat. 

They are being battered by plummeting real and personal property assessments, rising foreclosures and increased unemployment.  These factors significantly affect the collection of real and personal property taxes, which are the primary sources of revenue for local governments.  Other vital sources of revenue, such as sales, meals, recordation and lodging taxes, have been hit hard as well.

While revenues are sinking, local governments are struggling to maintain vital services while trying to hold the line on property tax rates. 

The column criticizing local governments not only trivialized the grave state of the economy, it ignored the reality of who pays for what when it comes to public education.

Here’s real life. 

Local government – which means local taxpayers – pay about 50 percent of the operating costs for K-12 education; the state pays about 44 percent and the federal government chips in the rest.  Unlike in a number of other states, local governments in Virginia also pay most of the staggering cost of building schools. 

A recent report of the Virginia Department of Education shows that in FY 2008, local governments – on average – spent 56.1 percent more on public education than the state required.  In FY 2009, local governments will spend an estimated 51.4 percent beyond the state-required match.

If local governments appropriated only the minimum required by the state, the education landscape would look something like this: More students would fail the Standards of Learning tests, more schools would lose accreditation and more schools would fail to meet federal achievement standards.  Classrooms would look different: There would be fewer of them, they would be more crowded, and the teachers in them would be making lower salaries.   

The criticisms leveled in the column in Virginia Tomorrow also accused local governments of not using federal education stimulus money for its intended purposes.  Here’s what is really taking place.  

Augusta County

The column accused the county of not including the stimulus funds in the school budget and criticized local officials for cutting real estate taxes. The facts on the stimulus funding: the school board decided to sit on those funds until it is clear about the stipulations attached to the federal money. Once teh school  board is comfortable with how the money can be used, it will be added to the budget.

The facts on the tax rate: the county reduced the real estate tax rate to offset tax increaes that would have otherwise occurred because of the property reassessment that took place last year. The county budget is reducing all general government, non-educational services by 7 to 10 percent next year, but is holding total school positions to under 7 per cent.  As a result, the county is laying off employees and freezing positions. The school system is avoiding layoffs, although it is reducing personnel as the results of attrition and freezing positions.

 Franklin County: The column took the county to task for reducing school funding by $400,000.  Put that reduction in context.  The county cut spending for the general government by more than 5 percent, but held cuts to schools to a minimum – less than 1.4 percent for FY 2010.  Reductions in local funding are exactly where they were projected to be back in January, long before federal stimulus money came on the scene. The county funded the opening of a new elementary school.  Teachers who had been told their contracts would not be renewed will be back next school year, thanks to the federal funding

 Loudoun County: The column referred to “schools being left in the same sorry state that they were before the stimulus money comes through.”  It’s hard to imagine calling Loudoun’s commitment to public education “sorry.”  The county appropriated $522.6 million in local funding for operating costs for FY 2010 – more than twice the local match of $255.2 million required by the state.  In FY 2010, Loudoun County will devote 70.1 percent of its revenues collected from local funds to school operating, capital costs and debt service.  School debt service alone is $111.5 million or approximately 15 cents of the county real property tax rate.  Loudoun County has added 33 new schools since 1998 and plans to open another eight schools by September 2012.  The county has paid $722 million in debt service for schools since 1998, and is projected to spend another $437.6 million through 2012, a total of $1.16 billion over a 14-year period.  

 Pittsylvania County: The column accused the county of using stimulus money to avoid raising taxes.  Pittsylvania raised its real estate tax rate, in large part to meet its debt payments for schools. The county took this action even though its unemployment rate in March was 11.2 percent.  Neighboring Danville, the source of employment for many county residents, has an unemployment rate of 13.7 percent. Those unemployment rates are among the highest in the Commonwealth.

 Winchester: The column implied that the city cut local funds to reflect the receipt of expected federal funds.  Again, not true.  The city decreased the amount it would appropriate for schools from its initial estimate because of sagging local revenue forecasts.  The downward revision was not related to the availability of federal stimulus funds.  The city is appropriating $25 million for school operating expenses, more than twice as much as the $12.1 million that the state calculates as the city’s required local effort.  In addition to the $25 million in operating costs, the city is funding an additional $7.5 million in debt service costs for schools.  The city will draw from its reserve funds in FY 2010, despite what the column inferred.  This is hardly a “clear and blatant example of misuse of the stimulus funding” as the column erroneously claimed.  

Review all the facts before accusing supervisors and council members of misusing federal dollars and under-funding public education.  Blaming local governments for the effect of the economic downturn on school budgets is akin to blaming firefighters for a fire. 

It’s discouraging that some education advocates are never satisfied with how much money local governments spend on education.  You wonder if there could ever be enough to appease them.  Of course, those critics have the luxury of demanding more and more and more, without ever having to vote to raise taxes, balance competing needs for public services or take into account the fragile state of the economy.

Michael L. Edwards is deputy director for legislative affairs at the Virginia Association of Counties.  Mary Jo Fields is director of research at the Virginia Municipal League.

2 Comments

  1. My friends from VACO and VML mischaracterize my assertion. My assertion is that some local governments are using ARRA funds which were clearly designated by the President and Congress for our schools for other purposes.

    I never asserted that local governments are not doing enough for public education. Some are and some are not.

    The question I ask is, “Should funds appropriated for schools get to the schools?” I side with Congress and our President in this regard.

  2. It’s unfortunate that this article seems to pit localities against school systems when both entitites are clearly struggling with funding their services during a tremendous economic downturn. Contrary to what’s written here, both school boards and local governing bodies have certainly had to “account for the fragile state of the economy in their budgets.” In most localities, this budget cycle has not been pretty in either the council or the school board chamber.

    Working together, VAC, VML, and education groups should be on the same page about 1) getting state education funding that reflects true education costs and 2) taking a look at whether Virginia’s current taxing authority model meets present needs.

    Mr. Edwards, Ms. Fields, and Mr. Jones each have valid points: education stimulus dollars should be used for their intended purpose, and we should look for ways to ensure that local revenue streams better meet both education and local government service needs. One way to start: looking at the 42 states with school board taxing authority to see the advantages/disadvantages of how the majority of states are funding schools.

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