Some Virginia school systems say they’ll lose out under enrollment loss funding formula

Virginia schools have lost thousands of students over the course of the COVID-19 pandemic.

According to the most recent figures from the Virginia Department of Education, enrollment has dropped by 45,000 students statewide, with the biggest decreases in kindergarten classrooms. Those losses could take a big financial hit on local school divisions, which receive funding from the state based on student attendance counts — better known to administrators as “average daily membership.”

Gov. Ralph Northam’s proposed budget aims to mitigate those enrollment losses through a formula that would route additional state funding to schools based on their decline in enrollment. In theory, it means a district that’s lost 50 children since March would still receive funding for those students — holding schools harmless for unexpected drops in attendance.

But administrators and advocates are sounding an alarm over the formula. A study by The Commonwealth Institute for Fiscal Analysis, a Richmond nonprofit, found that the administration based funding on projected enrollment numbers for the spring of 2020 instead of actual student counts collected in March.

In practice, it means that more than half of the state’s 132 divisions — primarily rural and high-poverty districts — wouldn’t receive funding based on real-world enrollment losses.

“I don’t know that there was any intent to create inequities, but really with the current formula, there have been,” said Greg Mullins, the superintendent for Wise County Public Schools. 

His district is one of 82 that would lose out under the current funding model. In late 2019, the administration projected that Wise County would enroll 5,180 students in the spring of 2020. But when the district took attendance counts last March, actual enrollment was 5,318.

That became a problem when it came to calculating how much the district should receive in no-loss funding. Chad Stewart, TCI’s manager of education policy and development, said the administration took the difference between the district’s projected March enrollment of 5,180 and its actual September enrollment of 5,211.

“When you do that, it looks like, ‘Oh, well you’ve actually seen an increase in students,” Mullins said. As a result, the division would lose out on more than $860,000 in funding. 

State Finance Secretary Aubrey Layne said the administration used projected enrollment figures, which are based on trends in attendance, in an effort to avoid the pandemic’s unpredictable impact on classrooms throughout the state.

“The overall thinking was that if we just keep everyone based on where they were the previous year, it would be better than trying to figure out the winners and losers,” he said. According to the administration, using projections also guaranteed that no local division would receive less in basic state aid than they did the year before.

But Mullins and other education advocates are arguing the state should be comparing the division’s actual March enrollment of 5,318 with its actual September enrollment of 5,211 to account for a loss of 107 students. Without no-loss funding that’s commensurate with actual dips in enrollment, schools say they’ll struggle to afford basic programs and services along with added pandemic-related expenses.

According to Stewart, those are only expected to grow along with increasing pressure to reopen school buildings and mitigate learning loss. National models have projected it will cost Virginia schools roughly $600 million to implement the most basic safety and sanitation measures recommended by the U.S. Centers for Disease Control and Prevention, and another $500 million for the intensive tutoring services currently recommended as the best way to remediate lost instruction time as schools moved classes online, Stewart said. 

“I know $800,000 for some divisions is like 20 bucks in your pocket,” Mullins said. “But for us, that is a tremendous amount of dollars.”

It’s a budget problem that small and low-income districts are struggling to articulate as General Assembly lawmakers finalize their own budget proposals. Stewart said it’s complicated by the fact that some districts gain by using projected enrollment. Prince William County, for example, lost more than 3,600 students using the projected numbers but only 1,825 based off real-life counts — gaining nearly $10 million in basic state aid under the governor’s proposed budget.

Keith Perrigan — the superintendent of Bristol Public Schools and president of the Coalition of Small and Rural Schools in Virginia — said the best solution is for the state to use whichever enrollment figure is better for each individual school division when it comes to no-loss funding. The same proposal is backed by Fund Our Schools, a statewide coalition of education advocates.

But Stewart said that approach would cost the state an additional $21 million. Lawmakers in the House and Senate have already expressed concern that the legislature’s Democratic majority has more priorities than the state has funding. Senate Finance Committee Chair Janet Howell, D-Fairfax, joked Thursday that her blood pressure lowered after a committee deferred a bill that would have given voters a say in whether the state took out $3 billion in bonds for school construction and repair.

“It’s certainly been brought to lawmakers’ attention, but no one has committed to any change,” Stewart said. Advocates still aren’t sure if both chambers will include any amount of no-loss funding in their own budget bills.

But Stewart said failing to include a no-loss funding formula that would help the state’s most cash-strapped divisions would only further education inequities at a time when all schools are struggling with unanticipated expenses.

“Schools are struggling so much that if we can provide additional dollars to rural schools and high-poverty schools right now, that’s where we should direct resources,” he said. “That’s where they’re most needed.”

Without the additional funding, many divisions say they’ll be forced to make unwanted cuts. While the latest federal stimulus package routed a little more than $845 million to Virginia schools, administrators say the money — diluted across 132 districts — is earmarked specifically for pandemic-related expenses such as additional cleaning and sanitation, new ventilation systems and WiFi hotspots for students without reliable internet connections.

But divisions depend on basic state aid for expenses such as teacher salaries and school repairs. Martha Eagle, the superintendent for Nelson County Public Schools, said she started looking into the funding formula in early January after VDOE released local forecasts based on the governor’s proposed budget. Nelson County lost 70 students over the course of the pandemic but wasn’t projected to receive any no-loss funding. 

If the formula used actual March enrollment, the district would receive close to $400,000. Eagle said the school system sometimes uses basic state aid to cover premium increases by its health insurance plan.

“That could be the difference between a teacher having to pay $500 a month for a family plan and $800 a month,” she said. “Even that small amount can really help our staff.”

Mullins said that Wise County — projected to lose $860,371 under the proposed budget — would be forced to lay off employees without a change to the formula. 

“When almost 80 percent of your budget is personnel, there’s just no way you can absorb that kind of loss without it impacting your staff,” he said.