January 22, 2010

Where Does FCPS’ Money Come From?

Most of the talk about next year's school budget these days is about cuts in programs and services to get us through the current financial downturn. But perhaps more important is where the money comes from. The Superintendent's proposed budget calls for an increase of $57.8 million in the county transfer of funds, and the Superintendent has noted the additional cuts that will be necessary if that increase does not come through—but why the county?

The county transfer accounts for almost 75 percent of FCPS’ revenue, and most of that comes from real estate taxes, because the state does not permit counties to tax income. State funding (including sales tax) accounts for just over 17 percent of FCPS revenue, and federal aid accounts for only 3.5 percent. Current tuition and fees (including tuition paid by students who reside outside the county, fees from parking permits, fees from musical instrument rentals, etc.) make up less than 1 percent of FCPS’ revenue. New and increased fees under the FY 2011 proposed budget, such as those for athletic participation and Advanced Placement (AP) and International Baccalaureate (IB) tests, will provide very small amounts of revenue. A chart below shows the sources of these revenues.

In terms of state funding, Virginia "equalizes" educational funding to its counties and cities through a formula called the local composite index (LCI). While this formula is somewhat complicated, the idea behind the LCI is to provide more state funding to school systems with the least local ability to pay.

How does Virginia measure a city or county’s ability to pay? Fifty percent of the measure is based on the value of real estate and public service corporations, another 10 percent of the formula is retail sales tax revenue, and 40 percent of the measure is based on adjusted gross income—with the total of these measures divided by average daily membership and population. Because Fairfax is a relatively wealthy county compared to many in Virginia, the school system has typically not fared well under this system. However, this year, because of the decline in Fairfax’s property values, applying the LCI would increase the percentage of state funding for FCPS, which would result in $61 million sent directly to the school system.

But the cheering shouldn’t begin yet. In his proposed budget, outgoing Governor Tim Kaine requested that—for the first time ever—the application of the LCI be frozen in order to "hold harmless" other counties whose percentage of state aid would decline this year if the LCI were applied.

Strongly opposing that decision, the Fairfax County Board of Supervisors and the Fairfax County School Board sent a joint letter on January 14 to Governor-Elect Robert McDonnell, asking him to reconsider that decision. The letter states in part:

“This is a basic issue of fairness—localities throughout the Commonwealth shared in the good times and the revenue generated from Northern Virginia during the economic boom. …Yet when economic hardships hit Northern Virginia, the pain is not borne equitably. …At a time when so much attention is focused on the need to turn the struggling economy around, one investment certain to reap benefits for the entire Commonwealth is Northern Virginia’s K-12 educational system, which brings major Fortune 500 companies to our area each year, benefiting us all.”

If the school system is to continue to offer the excellent programs that county residents want and to attract high-caliber employees, FCPS needs to have the full benefits of the local composite index and state support. The Bottom Line will continue to follow state funding developments in future issues.

Quote to Note

“The tax rate should not drive quality of life in Fairfax County. The quality of life should drive the tax rate.”

—Superintendent Jack Dale at the January 7 budget press conference

Upcoming Important Dates

• January 25, 26, 27—School Board Budget Public Hearings (Jackson Middle School).
  
• January 28—School Board Budget Work Session (Jackson Middle School).
  
• February 4—School Board Adopts FY 2011 Advertised Budget.
• February 6—School Board Budget Forum (Marshall High School).
  
• February 23—County Executive Releases FY 2011 Advertised County Budget.
  
• March 9—County Board of Supervisors Advertises Tax Rate.
• April 6—School Board Presents Budget to County Board of Supervisors.
  
• April 6 through 8—County Board of Supervisors Budget Public Hearings.
• April 27—County Board of Supervisors Approves County Budget, Tax Rate Resolution, and Transfer Amount to Schools.
• May 11 and 12—School Board Budget Public Hearings (Jackson Middle School).
• May 13—School Board Budget Work Session (Gatehouse Administration Center, room 1600).
• May 20—School Board Adopts Approved Budget.

Want to Get Involved?

• Learn more at the FCPS budget web site at http://www.fcps.edu/news/fy2011.htm.
  
• Attend a community presentation on the budget (find out the schedule at http://www.fcps.edu/news/fy2011.htm).
• Attend School Board meetings.
  
• Speak at a Board of Supervisors public hearing (www.fairfaxcounty.gov/bosclerk/speaker_bos.htm).

The Bottom Line is published by the FCPS Department of Communications and Community Outreach. Send your questions or ideas for future issues to thebottomline@fcps.edu. 

Please Note: All FCPS employees and all FCPS parents who have registered e-mail addresses with their children's schools get The Bottom Line automatically. If you are not a member of one of these groups and want to receive copies of The Bottom Line, go to http://www.fcps.edu/kit/, create a KIT Plus subscription, and sign up for Current Issues or School Board News and Updates.