Superintendent's Memo #314-09

State seal, Commonwealth of Virginia

COMMONWEALTH of VIRGINIA
Department of Education

November 6, 2009

TO: Division Superintendents

FROM: Patricia I. Wright, Superintendent of Public Instruction

SUBJECT: Composite Index of Local Ability-to-Pay for the 2010-2012 Biennium

This memorandum and the attachments contain information regarding the Composite Index of Local Ability-to-Pay for the 2010-2012 biennium, which will begin July 1, 2010. The 2010-2012 composite index was calculated using 2007 base-year data provided by the Virginia Department of Taxation for adjusted gross income (AGI), taxable retail sales, and true value of real property. The estimates of local population for 2007 are provided by the Weldon Cooper Center for Public Service at the University of Virginia, and the actual March 31, 2008, average daily membership is based on data reported by school divisions to the Virginia Department of Education (VDOE).

The VDOE calculated the 2010-2012 composite index excluding nonresident AGI as required by the appropriation act for all eligible school divisions. Eligible school divisions are no longer required to submit a certification form requesting the exclusion of nonresident AGI. Item 140, Paragraph A.4.b., Chapter 781, 2009 Acts of Assembly, states that

"for any locality whose total calendar year [2007] Virginia Adjusted Gross Income is comprised of at least 3 percent or more by nonresidents of Virginia, such nonresident income shall be excluded in computing the composite index of ability-to-pay. The Department of Education shall compute the composite index for such localities by using adjusted gross income data which exclude nonresident income, but shall not adjust the composite index of any other localities."

Attachment A to this memorandum includes the 2010-2012 composite index for each locality. The VDOE will use this composite index in calculating the state share of applicable school division entitlements for the Governor's introduced budget for the 2010-2012 biennium. Information regarding these entitlements will be made available to you in late December following the release of the Governor's 2010-2012 introduced budget, scheduled for December 18, 2009.

Downloadable files in Excel and .pdf formats containing the 2010-2012 composite index for each school division are available on the VDOE website at: http://www.doe.virginia.gov/school_finance/budget/compositeindex_local_abilitypay/index.shtml

In addition, at the website referenced above, an Excel file is available that will allow you to view the detailed calculation of your 2010-2012 composite index. The file displays all of the data elements used and the steps involved in the calculation of your 2010-2012 index. In addition, this file provides comparisons between the per pupil and per capita components of division indices relative to statewide averages for both the 2008-2010 and the 2010-2012 biennia.

This data can assist you in assessing the elements in the composite index formula that contributed to increases or decreases in your index for 2010-2012 compared to 2008-2010.

If you have questions or need additional information concerning this data, please contact the budget office at (804) 225-2025 or by e-mail (e-mail addresses available at http://doe.virginiainteractive.org/vdoe_directories/StaffByDivisions.aspx?o=Budget&w=true).

PIW/srt

Attachment:

a. 2010-2012 Composite Index and Data Inputs (PDF)