Albemarle schools examine budget formula, split of revenues

The formula Albemarle County uses to allocate new revenue between local government and the school division was the subject of a staff presentation at a recent School Board meeting.

At the heart of the conversation — held in preparation of a joint School Board and Board of Supervisors meeting to occur this fall — was the feeling that, given recent decreases in state education funding, Albemarle’s current funding mechanism isn’t meeting the school division’s needs.

“If you look at the formula, it looks like the county is doing a good job funding the schools because we’re getting about the same percentage of revenue that we’re used to,” said Steve Koleszar, a 20-year member of the School Board. “But what it doesn’t show is that we haven’t been making up for state shortfalls.”

Between fiscal years 2008 and 2015, per pupil state expenditures have declined $627 per student, from $3,653 to $3,026.

Known as the “60/40 split,” each year when the Board of Supervisors prepares its budget it determines the amount of money to be transferred to the school division by considering the amount of new revenue it has received, minus certain future expenditures.

Sixty percent of available new revenue is transferred to the school division with the rest made available to local government. However, the School Board was presented data showing that local government has a growing list of budgetary priorities getting funded before the split occurs.

“It’s finding money to put toward our capital projects, which benefit all citizens,” Supervisor Ann H. Mallek said of the initial slice of money supervisors allocate before the split occurs.

According to school division data, the transfer to the schools increased by about 25 percent between fiscal years 2007 and 2016, which is on par with the approximately 26 percent growth of the total shared revenue in the same years.

However, the division points to the trend of more items being dedicated before revenues are shared, thus lessening the amount of money the schools would have otherwise received through the formula.

The schools also suggest expenses that are either jointly agreed to or state-mandated — contributions to the Virginia Retirement System and spending on the Comprehensive Services Act, which provides services to students with extreme special needs — should be included like those expenses supervisors remove prior to the 60/40 split.

This fiscal year, the schools are planning to see a $500,000 increase in Comprehensive Services Act spending, and about $1.7 million in state-mandated Virginia Retirement System contributions next fiscal year.

Supervisor and former School Board member Diantha McKeel is empathetic to the fluctuations the schools are exposed to, and said the 60/40 split formula “isn’t working.”

“Unlike local government’s ability to delay or slow the growth of our services, the school division has no choice but to educate the children that show up each year,” McKeel said. “The Comprehensive Services Act can dramatically fluctuate from year to year, impacting both [local government and the schools] because we both share the cost, but Virginia Retirement System fluctuations impact the schools more because they have more people.”

“Bottom line is that I am interested in what we could do to look at the risk that the schools encounter that’s causing their inability to have a more consistent budgetary stream,” McKeel said. “One way to do that would be to take other things off the top before the 60/40 split.”

Despite her empathy, however, McKeel said the school division is well-funded and that local government is facing financial challenges such as growth and a locality that is urbanizing.

School Board member Jason Buyaki said board members should speak with state legislators.

“I think we need to continue to put pressure on them to fund their responsibilities,” he said.

As the conversation moves forward, McKeel said she hopes for clear communication that leads to improved outcomes.

“I’m hoping to have the School Board and the Board of Supervisors look at what can be called risk factors,” she said, citing increasing population and enrollment in the schools. “I just know that we can improve our budgetary culture.”