Division expects decreased revenue from state, is working to cut $1.5 million.
by Adele Uphaus
MANAGING EDITOR AND CORRESPONDENT
An increase in one of the factors the state considers when calculating its share of funding for public schools will stress the Fredericksburg school division’s budget for the new fiscal year that begins on July 1.
The division is projecting a loss of $1.5 million in state funding due to an increase in the local composite index, or LCI, which is a measure of the locality’s ability to fund public education, Chief Finance Officer Jennifer Brody told the School Board at a budget work session on Monday.
The LCI for Fredericksburg City, which the state recalculates every two years as part of Virginia’s biennial budget process, increased 3.55 points between the 2022-24 and 2024-26 biennium—and when the LCI increases, state funding decreases.
Only 13 school divisions had increases over three points, Brody said Monday, and Fredericksburg City now has the 19th highest LCI in the state.
The goal is for localities to pay 45% of the cost of public education and the state to pay 55%.
The state uses five factors to calculate LCI for each locality. In order of which is given the least weight to which is given the greatest, the five factors are taxable retail sales, population, adjusted gross income, true value of real property, and the school division’s average daily membership.
“Enrollment growth counts more than anything towards the LCI, and ours is flat,” Brody said Monday.
But a problem is that the LCI for each biennium is calculated using enrollment data from the previous two years. For the city and many other school divisions, this reflects pandemic-related lower enrollment.
And the LCI also doesn’t consider an increase in student populations with special needs, such as English language learners, students with disabilities and economically disadvantaged students.
“The state funding formulas do not support the increasing needs of students,” Brody said.
An additional complicating factor is the expiration in fiscal year 2025 of one-time pandemic relief funds.
In city schools, these funds have paid for six full-time instructional positions, five part-time positions, sign-on and retention bonuses for staff, contracted tutoring services, and expanded summer school and summer programming, Brody said.
Superintendent Marci Catlett’s proposed budget for fiscal year 2025 has not been finalized yet, but the division is projecting a total revenue loss of $1.09 million, and an expenditure increase of $1.8 million.
Some of the expenditure increases are “non-discretionary” and include health insurance, instructional programming, the budget for substitute teachers, and the lease on the advanced weapons detection system installed at Walker-Grant Middle and James Monroe High.
Other increases are considered “discretionary” and include a 2% or 3% salary increase for staff.
Brody said the division is working to cut $1.5 million in expenses for fiscal year 2025. This would be done in three phases of $500,000 each.
Catlett will present her proposed budget to the School Board later this month. There will be a public hearing on the proposed budget on March 4, followed by the School Board’s approval.
City Council is then responsible for allocating funding to the school division as part of its budget for the upcoming fiscal year. There will be at least one joint work session between Council and the School Board before the budget is approved and adopted in June.
