RICHMOND — Statewide aid estimates for Virginia’s public schools were $201 million short of what districts expected to receive, Gov. Glenn Youngkin’s administration confirmed last week after discovering a flaw in the budget in December.
On Friday, Superintendent of Public Instruction Jillian Balow notified school division superintendents that the basic aid calculation tool used to determine how much funding school divisions will receive did not account for a provision to hold localities harmless from Virginia’s elimination of the state portion of the grocery tax. As a result, schools statewide project funding shortfalls for the remainder of the school year and inaccurate estimates for their budgets next year.
“Unfortunately, some school divisions have used these estimates for their own local planning and local budgeting purposes and now, they’re finding that these estimates overstated state aid,” said Charles Pyle, a spokesman with the Virginia Department of Education.
The agency learned of the error in December, according to Balow’s letter to the superintendents. VDOE has said it will release an updated calculation tool later this month that reflects the budgets produced by the Senate and House at the session’s midpoint.
Local budgets developed by governing bodies and public schools rely heavily on state funding. Among state revenue streams that help fund schools are sales taxes.
Last year, the General Assembly passed legislation reducing the sales tax rate on groceries from 2.5% to 1% to help lower the cost of living. The bill also included a provision that payments from state revenues would go to localities beginning Feb. 1, 2023, to make up shortfalls in education funding they would have received under the higher grocery tax.
Macaulay Porter, a spokeswoman for the governor, said in a statement Tuesday afternoon that Youngkin “is confident that we will address localities’ concerns.”
“The administration is continuing to work with all stakeholders, including our school systems and the legislature, to address the VDOE estimation tool error,” she said.
Keith Perrigan, superintendent of Bristol Virginia Public Schools and president of the Coalition of Small and Rural Schools in Virginia, said he expects to meet with VDOE staff soon to find a solution.
He said the coalition is concerned that rural schools will be disproportionately impacted by the error because divisions with low composite index ratings, which measure their ability to pay education costs, rely more on state funding than local contributions.
Bristol will have to adjust for receiving approximately $150,000 less than expected in the current fiscal year and $350,000 next year if a solution is not found, according to Perrigan.
“Each of the dollars that are in that planning document is attached to either a salary and benefit, a gallon of gas, a textbook, a computer, a ream of paper. Whatever it may be, each of those dollars is accounted for in our planning document,” Perrigan said.
Democrats criticized the governor’s administration Tuesday during a previously scheduled press conference on education priorities.
“Yesterday is a prime example of how this administration has continuously spent all their manpower hours on ideological MAGA-like policies that take us backward, rather than focusing on policies that take us forward,” said Del. Schuyler VanValkenburg, D-Henrico.
Sen. Ghazala Hashmi, D-Richmond, called the error “simply outrageous” in a statement, describing the hold harmless provision as an essential part of last year’s decision to eliminate the state portion of the grocery tax.
“Now because of an error, Virginia’s public schools, rural and urban, are $201 million in the hole – not to mention the news comes as a surprise to the General Assembly and to local leaders,” Hashmi said.
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