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School budget improves with McDonnell order

With uncertainty surrounding the fate of school budgets around the state, members of the administration at Suffolk Public Schools have been wondering about the fate of a formula that could swing their budget millions of dollars in either direction.

During his last month as governor, Tim Kaine had chosen not to make the usual annual updates to the formula, and now that he is in office Gov. Bob McDonnell has agreed, making a decision that will save Suffolk as much as $4 million this year.

“As superintendent of Suffolk Public Schools, I am pleased with the decision,” Superintendent Milton Liverman stated in an email. “Bottom line, is that the decision is good for Suffolk.”

In December, a month before leaving office, then-Gov. Tim Kaine made a decision that would affect school budgets across Virginia: Kaine froze the Local Composite Index, or LCI — a complex formula that determines how much a locality should pay for basic kindergarten-through-12th-grade programs and how much funding it should get from the state.

The LCI assigns each school division a score, such as “.75” or “.51,” based on the locality’s adjusted gross income, taxable retail sales and property tax base. The lower its score, the more money the locality gets from the state government for basic education, and vice versa.

In the Robin Hood system of school finance, Kaine’s decision created winners and losers: It protected school divisions whose LCI had increased and whose state funding would have decreased; but it hurt localities whose LCI had dropped and that were expecting more state aid.

Since December, school officials across the state have waited anxiously to learn what Virginia’s new governor would do. Now they’re finding out.

McDonnell’s office confirmed Friday that he would uphold the LCI freeze implemented by Kaine. Kaine proposed freezing the LCI until the 2012 fiscal year. He said this would protect 97 school divisions that would lose money if the formula were re-calculated.

Suffolk would lose $4 million if the figure were adjusted, according to Dr. Liverman.

“The decision means that the reduction of $4 million in State aid will be delayed for one year,” Liverman stated. “It will give us more time to identify ways to adjust to the reduction.”

While budget cuts will not be as drastic as they could have been, there still will be a cutback due to a state deficit.

“The decision does not mean our budget problems are solved,” Liverman stated. “We still anticipate additional significant cuts because of the state revenue shortfall.”

While McDonnell’s decision to uphold the LCI freeze is good news for Suffolk, it upset several other school districts – including the public schools in Fairfax, Loudoun and Prince William counties.

Their LCI scores would have dropped this year, and that should have meant more money for those school districts. The decision to freeze the formula, however, changed everything.

Fairfax County supervisors are so upset that they are considering legal action.

“This is really a cut-and-dried issue,” said Jeffrey C. McKay, supervisor for the county’s Lee District. “It’s outright discrimination against Northern Virginia.”

McDonnell’s decision will cut $61 million from the Fairfax County Public Schools’ budget, said Paul Regnier, a spokesman for the school district.

Senator Chap Petersen, D-Fairfax, said he was furious when he heard the formula would be frozen at the level set by Kaine.

Petersen noted that because the real estate market had fallen in Northern Virginia, Fairfax, Prince William and Loudoun counties received lower scores on the scale than they had in the past. Ordinarily, the lower scores would have resulted in more money from the state for basic education.

Veronica Garabelli of Capital News Service contributed to this story.